YEAR 2000 ISSUES (UNAUDITED)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the fund's investments and its share price.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for Dreyfus Short-Intermediate
Government Fund. For the 12-month reporting period ended November 30, 1998, your
Fund produced a total return, including share price changes and dividend income
generated, of 7.21%.* Income dividends paid from net investment income during
the period amounted to approximately $0.746, representing a distribution rate
per share of 6.85%.**
ECONOMIC REVIEW
During 1998, the main regions of the world had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board to contemplate a rise in interest rates early in the
year. The U.S. economy cooled enough over the months that the Fed decided to
stand pat. Evidence of economic cooling continued to accumulate and worries
about the world economy intensified. Financial stresses pushed the Fed to ease
beginning in September. After many years of subpar economic growth, continental
Europe moved into a sustained economic expansion. The overall European economy
benefited as interest rates in peripheral countries such as Spain and Italy
fell, approaching the lower level established by Germany, on the eve of currency
unification. Unlike the U.S., Europe has substantial excess capacity of
productive plants and labor. In Asia, weak economies were pervasive as a result
of the Asian financial crisis. The Latin American economies weakened as the
financial stresses spread throughout that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The drop
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in real income, a strong labor market and past
increases in the prices of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of the industrial weakness was to cool off a U.S.
economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields.
Monetary policy has begun to ease in Europe as well as the U.S.
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management hedge fund
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. There appears to be a shift in the priorities of key policymakers from
fighting potential inflation to restimulating future world economic growth.
MARKET ENVIRONMENT
The flight to quality as investors scrambled for a safe haven in 1998
propelled yields significantly lower. The 30-year Treasury bond began the year
yielding 5.925% and ended the year yielding 5.096%. At one point, yields on the
same issue reached 4.72%, which was at the peak of fear. Investors apparently
were inclined to accept these significantly lower yields for Treasuries in order
to lessen quality risk.
To put in perspective the amount of fear that was present in the market, you
can look at quality spreads. Quality spreads are the difference in yield between
Treasury yields and other investment grade securities like corporate bonds,
mortgage-backed, and agency securities. In October, these quality spreads became
as wide as those last seen in the early 1990s during a recession. They have
since recovered somewhat.
PORTFOLIO OVERVIEW
Given the market environment, we kept the Fund at an effective duration of
approximately three years. This worked out well for the Fund, as rates did
decline, which increased the value of our portfolio.
Our allocation to mortgage-backed securities was minimal for most of 1998,
except in cases of specific opportunities. One of those opportunities was the
GNMA adjustable rate mortgage (ARM) position we have written about before.
Because of a lack of new supply, ARM mortgages had a scarcity premium attached
to them, so this position worked out quite well. However, mortgage-backed
securities in general were under pressure throughout the year as prepayment
fears increased in step with the fall in interest rates. Normally homeowners
will wait to see how low rates will go before refinancing, but at the point
rates turn around there is usually a massive rush to file refinancing
applications. We believe the market has already seen that occur, with more fear
in the mortgage market now than there should be.
Agency securities were also hurt during the spread widening we spoke about as
happening last October. At the end of the Fund's fiscal period, agencies' yields
were attractive compared to Treasuries.
At the end of the Fund's fiscal year, the Treasury component of this Fund was
allocated to, in market parlance, off-the-run (OTR) Treasuries (which generally,
include any Treasury not recently issued in the auction process.) In particular,
higher coupon issues became dramatically cheaper during the peak of crisis in
October. There are a number of reasons for this including: (1) OTR issues
generally are considered less liquid than recent issues, so they will tend to
yield more; (2) they are also typically used as collateral with institutions
like hedge funds. In essence, when some of these hedge funds came under pressure
to close down recently, the collateral held in their accounts was sold; (3)
last, when investors move out of other markets, they generally buy the most
current Treasury security issued.
During the year, our biggest miss was the Treasury Inflation Protected
Securities (TIPS) market. While TIPS are theoretically cheap, as we had written,
the marketplace could not focus on inflation protection during a time when it
seemed that a deflationary crisis was looming everywhere.
Very truly yours,
[Gerald E. Thunelius signature]
Gerald E. Thunelius
Portfolio Manager
December 15, 1998
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, divided by the net asset value per share at
the end of the period.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND NOVEMBER 30, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
SHORT-INTERMEDIATE GOVERNMENT FUND AND THE MERRILL LYNCH GOVERNMENTS, U.S.
TREASURY, SHORT-TERM (1-2.99 YEARS) INDEX
Dollars
$20,941
Dreyfus Short-Intermediate Government Fund
$20,335
Merrill Lynch Governments, U.S. Treasury, Short-Term (1-2.99 Years) Index*
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
Average Annual Total Returns
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
One Year Ended Five Years Ended Ten Years Ended
November 30, 1998 November 30, 1998 November 30, 1998
____________________ ____________________ __________________________
<S> <C> <C> <C>
7.21% 5.64% 7.67%
</TABLE>
- ------------------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Short-Intermediate
Government Fund on 11/30/88 to a $10,000 investment made in the Merrill Lynch
Governments, U.S. Treasury, Short-Term (1-2.99 Years) Index on that date. All
dividends and capital gain distributions are reinvested.
The Fund invests in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities and repurchase agreements in respect of such
securities. Under normal market conditions, the Fund invests in a portfolio of
securities that has an effective duration of approximately three years. The
Fund's performance shown in the line graph takes into account fees and expenses.
Unlike the Fund, the Merrill Lynch Governments, U.S. Treasury, Short-Term
(1-2.99 Years) Index is an unmanaged performance benchmark for Treasury
securities with maturities of 1-2.99 years; issues in the Index must have par
amounts outstanding greater than or equal to $1 billion. The Index does not take
into account charges, fees and other expenses. Further information relating to
Fund performance, including expense reimbursements, if applicable, is contained
in the Financial Highlights section of the Prospectus and elsewhere in this
report.
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS NOVEMBER 30, 1998
Principal
Bonds and Notes--98.9% Amount Value
- ------------------------------------------------------- ______________ _____________
<S> <C> <C>
U.S. GOVERNMENT AGENCY--21.9%
FICO Coupon Strips,
Zero Coupon, 6/6/2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,967,000 $ 16,657,924
Federal National Mortgage Association:
Medium-Term Notes:
5%, 10/2/2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,006,250
5.90%, 7/9/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000 7,589,475
6.67%, 8/1/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 7,305,550
Notes:
6.80%, 1/10/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,648,900
8.50%, 2/1/2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,765,000 49,642,165
Tennessee Valley Authority,
Notes, 5.375%, 11/13/2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,034,000
______________
106,884,264
______________
U.S. GOVERNMENT AGENCY/MORTGAGE-BACKED--4.6%
Federal Home Loan Mortgage, REMIC,
Multiclass Mortgage Participation Ctfs.,
Ser. 1978, Cl. PH, 7%, 1/15/2024
(Interest Only Obligation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,878,907 (a) 629,227
Federal National Mortgage Association:
6%, 11/1/2012-11/1/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,911,399 14,934,720
9%, 7/1/2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,936,621 6,313,181
REMIC Trust, Gtd. Pass-Through Ctfs.,
Ser. 1997-56 , Cl. PM, 7%, 6/18/2026
(Interest Only Obligation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 (a) 427,920
______________
22,305,048
______________
U. S. TREASURY BONDS--56.8%
11.75%, 2/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 8,039,290
13.125%, 5/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,600,000 22,246,344
13.375%, 8/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000,000 10,978,920
15.75%, 11/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,400,000 21,409,544
10.75%, 2/15/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,200,000 65,256,716
10.75%, 5/15/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000 15,473,875
4.25%, 11/15/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000 49,449,000
11.875%, 11/15/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000,000 39,307,800
11.625%, 11/15/2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,400,000 39,722,634
5.25%, 11/15/2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,137,750
______________
277,021,873
______________
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------- ______________ ______________
U.S. TREASURY COUPON STRIPS--1.7%
Zero Coupon, 2/15/2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,600,000 $ 8,314,800
______________
U.S. TREASURY NOTES--9.7%
6.25%, 8/31/2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,274,500
8%, 5/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 21,551,800
6.625%, 6/30/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,242,300
5.50%, 2/28/2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,315,500
______________
47,384,100
______________
U.S. TREASURY PRINCIPAL STRIPS--4.2%
Zero Coupon, 8/15/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 13,252,200
Zero Coupon, 5/15/2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 7,348,300
______________
20,600,500
______________
TOTAL BONDS AND NOTES
(cost $484,732,449) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $482,510,585
==============
SHORT-TERM INVESTMENTS--10.7%
- -------------------------------------------------------
REPURCHASE AGREEMENTS;
Warburg, Dillon Read, 5.20%,
dated 11/30/1998, due 12/1/1998 in the amount of $52,250,546
(fully collateralized by $51,989,000 U.S. Treasury Notes,
6%, 8/15/1999, value $53,288,725)
(cost $52,243,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 52,243,000 $ 52,243,000
==============
TOTAL INVESTMENTS
(cost $536,975,449) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109.6% $534,753,585
_______ ==============
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (9.6%) $ (47,039,116)
======= ===============
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $487,714,469
======= ==============
NOTES TO STATEMENT OF INVESTMENTS:
- -----------------------------------------------------------------------------
(a) Notional face amount shown.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998
Cost Value
______________ ______________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments
(including Repurchase Agreements of
$52,243,000)--Note 1(b) . . . . . . . . . . . . . . . . $536,975,449 $534,753,585
Receivable for investment securities sold . . . . . . . . 133,789,223
Interest receivable . . . . . . . . . . . . . . . . . . . 5,747,987
Receivable for shares of Beneficial Interest subscribed . . 595,755
Prepaid expenses and other assets . . . . . . . . . . . . 25,332
_______________
674,911,882
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 230,432
Cash overdraft due to Custodian . . . . . . . . . . . . . 9,221,664
Payable for investment securities purchased . . . . . . . 175,653,232
Payable for shares of Beneficial Interest redeemed . . . 1,982,716
Accrued expenses . . . . . . . . . . . . . . . . . . . . 109,369
_______________
187,197,413
_______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $487,714,469
================
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $ 524,501,296
Accumulated undistributed investment income--net . . . . 31,317
Accumulated net realized gain (loss) on investments . . . (34,596,280)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b) . . . . . . . . . . . . . . . (2,221,864)
_______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $487,714,469
===============
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) . . . . . . 45,066,243
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $10.82
=======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1998
<S> <C> <C>
INVESTMENT INCOME
INCOME Interest Income . . . . . . . . . . . . . . . . . $35,964,006
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . $ 2,381,444
Shareholder servicing costs--Note 3(b) . . . . . 672,655
Prospectus and shareholders' reports . . . . . . 67,979
Custodian fees--Note 3(b) . . . . . . . . . . . . 59,797
Trustees' fees and expenses--Note 3(c) . . . . . 52,835
Registration fees . . . . . . . . . . . . . . . . 40,309
Professional fees . . . . . . . . . . . . . . . . 35,691
Loan commitment fees--Note 2 . . . . . . . . . . 4,744
Miscellaneous . . . . . . . . . . . . . . . . . . 9,358
_____________
Total Expenses . . . . . . . . . . . . . . 3,324,812
______________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,639,194
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments:
Long transactions . . . . . . . . . . . . . . $ 4,098,824
Short sale transactions . . . . . . . . . . . (2,141,936)
_____________
Net Realized Gain (Loss) . . . . . . . . . 1,956,888
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . (1,581,674)
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 375,214
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $33,014,408
=============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
November 30, 1998 November 30, 1997
________________ ________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,639,194 $ 32,226,732
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . . . 1,956,888 (4,272,981)
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . (1,581,674) (3,087,033)
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . . 33,014,408 24,866,718
_______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,804,499) (32,117,940)
_______________ _______________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,536,723 257,592,878
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,502,951 25,557,245
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (189,707,314) (357,046,165)
_______________ _______________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions . . . . . . (667,640) (73,896,042)
_______________ _______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . . . (457,731) (81,147,264)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488,172,200 569,319,464
_______________ _______________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 487,714,469 $ 488,172,200
=============== ================
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,317 $ 196,622
_______________ ________________
Shares Shares
_______________ _______________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,998,195 23,825,894
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . 2,446,543 2,366,805
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,512,879) (33,041,278)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . . . . (68,141) (6,848,579)
=============== ===============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
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.
<TABLE>
<CAPTION>
Year Ended November 30,
_________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . $10.82 $10.95 $11.06 $10.57 $11.45
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . . . . .74 .66 .65 .73 .76
Net realized and unrealized gain (loss) on investments . . . . .01 (.13) (.11) .49 (.82)
_______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . . . . . . . . . .75 .53 .54 1.22 (.06)
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . . . . . . . . . (.75) (.66) (.65) (.73) (.76)
Dividends from net realized gain on investments . . . . . . . . -- -- -- -- (.06)
_______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . . . . . . . . . (.75) (.66) (.65) (.73) (.82)
_______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . . . . . . . . . $10.82 $10.82 $10.95 $11.06 $10.57
======= ======= ======== ======= =======
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . . . . . . . . . 7.21% 4.93% 5.08% 11.91% (.57%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . . . . .70% .74% .74% .66% .47%
Ratio of net investment income to average net assets . . . . . 6.85% 6.13% 5.99% 6.73% 6.91%
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . . . . -- .01% -- .09% .30%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 902.14% 818.39% 594.44% 387.60% 695.60%
Net Assets, end of period (000's Omitted) . . . . . . . . . . . $487,714 $488,172 $569,319 $573,681 $496,513
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Short-Intermediate Government Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "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. The Dreyfus Corporation (the "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. is the distributor of
the Fund's shares, which are sold to the public without a sales charge.
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: Investments in securities (excluding short-term
investments other than U.S. Treasury Bills) are valued each business day by an
independent pricing service ("Service") approved by the Board of Trustees.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service are
valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of securities of comparable quality, coupon, maturity and
type; indications as to values from dealers; and general market conditions.
Short-term investments, excluding U.S. Treasury Bills, 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. Under the terms of the custody agreement, the
Fund receives net earnings credits based on available cash balances left on
deposit.
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 of 1986, as
amended (the "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 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 $33,848,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1998. The
carryover does
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
not include net realized securities losses from November 1, 1998 through
November 30, 1998 which are treated, for Federal income tax purposes, as arising
in fiscal 1999. If not applied, $23,885,000 of the carryover expires in fiscal
2002, $4,470,000 expires in fiscal 2003, $1,220,000 expires in fiscal 2004 and
$4,273,000 expires in fiscal 2005.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on the prevailing
market rates in effect at the time of borrowings. During the period ended
November 30, 1998, the Fund did not borrow under the Facility.
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 .50 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 of the Fund,
exclusive of taxes, brokerage, interest on borrowings, commitment fees and
extraordinary expenses, exceed 1 1/2% of the value of the Fund's average daily
net assets, the Fund may deduct from payments to be made to the Manager, or
the Manager will bear the amount of such excess expense. During the period
ended November 30, 1998, there was no expense reimbursement pursuant to the
Agreement.
(B) Under the Shareholder Services Plan, the Fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the Fund's average daily net assets
for certain allocated expenses of providing personal services and/or maintaining
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 period ended
November 30, 1998, the Fund was charged $308,601 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. During the period
ended November 30, 1998, the Fund was charged $199,879 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended November 30, 1998, the Fund was
charged $59,797 pursuant to the custody agreement.
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,000 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, during the period ended November 30, 1998:
<TABLE>
<CAPTION>
Purchases Sales
_____________ _____________
<S> <C> <C>
Long transactions. . . . . . . . . . . . . . . . . . . . . . . . . . $4,320,744,709 $4,319,361,435
Short sale transactions. . . . . . . . . . . . . . . . . . . . . . . 712,539,072 710,397,136
_____________ ______________
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,033,283,781 $5,029,758,571
============== ==============
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund is engaged in short-selling which obligates the Fund to replace the
security borrowed by purchasing the security at current market value. The Fund
would incur a loss if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund would realize a gain if the price of the security declines between
those dates. Until the Fund replaces the borrowed security, the Fund will
maintain daily, a segregated account with a broker and custodian, of cash and/or
U.S. Government securities sufficient to cover the short position. At November
30, 1998, there were no securities sold short outstanding.
(B) At November 30 1998, accumulated net unrealized depreciation on
investments was $2,221,864 consisting of $1,671,592 gross unrealized
appreciation and $3,893,456 gross unrealized depreciation.
At November 30, 1998, 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
- -----------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus Short-Intermediate Government Fund, including the statement of
investments, as of November 30, 1998, 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 and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of November 30, 1998 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
Dreyfus Short-Intermediate Government Fund at November 30, 1998, 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
January 11, 1999
[reg.tm logo]
(reg.tm)
DREYFUS SHORT-INTERMEDIATE
GOVERNMENT FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 542AR9811
Short-Intermediate
Government
Fund
Annual Report
November 30, 1998
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
AND THE MERRILL LYNCH GOVERNMENTS, U.S. TREASURY,
SHORT-TERM (1-2.99 YEARS) INDEX
EXHIBIT A:
MERRILL LYNCH DREYFUS
GOVERNMENTS, U.S. SHORT-INTERMEDIATE
PERIOD TREASURY, SHORT-TERM GOVERNMENT
(1-2.99 YEARS) INDEX* FUND
11/30/88 10,000 10,000
11/30/89 11,069 11,099
11/30/90 12,048 12,121
11/30/91 13,414 13,605
11/30/92 14,340 14,701
11/30/93 15,203 15,919
11/30/94 15,312 15,829
11/30/95 16,904 17,715
11/30/96 17,882 18,615
11/30/97 18,943 19,533
11/30/98 20,335 20,941
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
