Dreyfus
Short-Intermediate
Government Fund
ANNUAL REPORT
November 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
9 Statement of Securities Sold Short
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
19 Report of Independent Auditors
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Short-Intermediate Government Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Short-Intermediate
Government Fund, covering the 12-month period from December 1, 1998 through
November 30, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with the fund's
portfolio manager, Gerald Thunelius.
The past 12 months have been highly volatile for most bonds, including U.S.
government securities. When the reporting period began, U.S. Treasury securities
had already rallied strongly during a "flight to quality" caused by the global
financial crisis. However, other types of bonds -- including U.S. government
agency securities -- had declined sharply in the wake of massive selling by
troubled hedge funds. The Federal Reserve Board responded to these influences by
reducing short-term interest rates. Their strategy apparently was effective,
because the U.S. economy remained strong through the remainder of the reporting
period.
In fact, by the second quarter of 1999, stronger than expected economic growth
created concerns that inflationary pressures might re-emerge. To help forestall
a rise of inflation, the Federal Reserve Board increased short-term interest
rates three times during the summer and fall, leading to erosion of most bond
prices. In addition, supply-and-demand factors have recently pushed the yields
of U.S. government agency securities to levels that are quite attractive
compared to the yields of U.S. Treasury securities of comparable maturity.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Short-Intermediate Government Fund.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
December 15, 1999
DISCUSSION OF FUND PERFORMANCE
Gerald Thunelius, Portfolio Manager
How did Dreyfus Short-Intermediate Government Fund perform relative to its
benchmark?
For the 12-month period ended November 30, 1999, Dreyfus Short-Intermediate
Government Fund produced a total return of 2.33%.(1) In contrast, the fund's
benchmark, the Merrill Lynch Governments, U.S. Treasury, Short-Term (1-3 Years)
Index, produced a total return of 3.28% for the same period.(2)
We attribute the fund's performance to a volatile bond market in which the U.S.
government sector was particularly hard hit. In addition, relative to the fund's
benchmark, our slightly long average duration -- a measure of the portfolio's
sensitivity to changing interest rates -- hindered our performance.
What is the fund's investment approach?
The fund seeks to provide as high a level of current income as is consistent
with the preservation of capital. To pursue this goal, we invest in securities
issued or guaranteed by the U.S. government or its agencies, and in repurchase
agreements that are backed by U.S. government securities. The fund may invest up
to 35% of its assets in mortgage-related securities issued by U.S. government
agencies, such as mortgage pass-through securities and collateralized mortgage
obligations (CMOs) , including stripped mortgage-backed securities. CMOs are
multiclass bonds that are issued by government agencies or private issuers and
are backed by pools of mortgage pass-through securities or mortgage loans.
When choosing securities for the fund, we first examine U.S. and global economic
conditions and other market factors to determine the likely direction of long-
and short-term interest rates. Using a research-driven investment process, we
then attempt to identify potentially profitable sectors before they are widely
perceived by the
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
market. Finally, we look for underpriced or mispriced securities within those
sectors that, in our opinion, appear likely to perform well over time.
What other factors influenced the fund's performance?
The global bond markets have been highly volatile over the past year. When 1999
began, many investors were concerned about the near collapse of a major U.S.
hedge fund, the rapid deterioration of Asian economies and markets, Russia's
debt default and low commodity prices. As a result of these negative economic
influences, investors seemed more comfortable holding U.S. Treasuries, which
many consider to be the most creditworthy investments in the world.
The environment that ultimately prevailed during most of 1999 presented quite a
different picture, however. As the year progressed, many global economies staged
impressive rebounds, and the U.S. economy continued to grow strongly. Commodity
prices also began to rise; this is especially true of oil prices, which more
than doubled over the course of the year.
As domestic and overseas economies continued to grow during the summer and fall,
the Federal Reserve Board raised short-term interest rates by a total of 75
basis points in an attempt to forestall an acceleration of inflation. At the
same time, strong economic growth reassured bond investors that recession was
unlikely, and they became more comfortable holding riskier assets such as
corporate and foreign government bonds.
As assets flowed into higher yielding bonds, they flowed out of U.S. Treasury
securities, putting downward pressure on prices. As a result, U.S. Treasury
securities underperformed most other sectors of the bond market in 1999. When
prices of U.S. Treasury securities fell, the differences in yields between U.S.
Treasury securities and higher yielding bonds -- such as U.S. government agency
and mortgage-backed securities -- widened dramatically during the summer before
moderating somewhat toward the end of the reporting period. We took
advantage of these market conditions relatively early in the year by emphasizing
U.S. government agency and mortgage-backed securities, and generally avoiding
lower yielding U.S. Treasury securities.
What is the fund's current strategy?
We have recently taken several steps to add liquidity to the portfolio while
simultaneously attempting to reduce potential Y2K-related risks. Toward the end
of the year, we began to take profits in some of our U.S. government agency and
mortgage-backed investments. We have redeployed those assets to U.S. Treasury
securities, which provide greater liquidity and have recently appeared more
attractively valued.
By increasing the fund's liquidity, we believe we have positioned the fund to
avoid any Y2K-related problems that may arise temporarily at the start of the
new year. We are also well positioned to take advantage of any new bond issuance
in the early part of 2000. As the U.S. economy continues to grow, government
agencies and other mortgage issuers will need to raise capital. Accordingly, our
current strategy is designed to keep assets readily available to selectively
purchase new bonds as they come to market.
December 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: BLOOMBERG L.P. -- THE MERRILL LYNCH GOVERNMENTS, U.S. TREASURY,
SHORT-TERM (1-3 YEARS) INDEX IS AN UNMANAGED INDEX CONSISTING SOLELY OF
SHORT-TERM TREASURY SECURITIES.
The Fund
FUND PERFORMANCE
Dreyfus Short-Intermediate Government Fund - $19,306
Merrill Lynch Governmenst, U.S. Treasury, Short-Term (1-3 years) Index - $18,974
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 (1-3 Years) Index ((+))
- --------------------------------------------------------------------------------
Average Annual Total Returns AS OF 11/30/99
<TABLE>
<CAPTION>
Inception
Date 1 Year 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fund 4/6/87 2.33% 6.24% 6.80%
</TABLE>
((+)) SOURCE: BLOOMBERG L.P.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS SHORT-INTERMEDIATE
GOVERNMENT FUND ON 11/30/89 TO A $10,000 INVESTMENT MADE IN THE MERRILL LYNCH
GOVERNMENTS, U.S. TREASURY, SHORT-TERM (1-3 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 (1-3
YEARS) INDEX IS AN UNMANAGED PERFORMANCE BENCHMARK FOR TREASURY SECURITIES WITH
MATURITIES OF 1-3 YEARS; ISSUES IN THE INDEX MUST HAVE PAR AMOUNTS OUTSTANDING
GREATER THAN OR EQUAL TO $1 BILLION. THE INDEX DOES NOT TAKE INTO ACCOUNT
CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND
PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN
THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
STATEMENT OF INVESTMENTS
November 30, 1999
<TABLE>
<CAPTION>
Principal
BONDS AND NOTES--87.3% Amount ($) Value ($)
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U.S. GOVERNMENT AGENCY--11.9%
FICO Coupon Strips:
<S> <C> <C>
0%, 6/6/2000 17,967,000 17,441,465
Ser. 15, 0%, 9/7/2001 2,500,000 2,238,975
Federal Home Loan Banks, Ser. A-1,
Coupon Strips, 0%, 2/25/2003 1,789,000 1,455,985
Federal Home Loan Mortgage,
Medium-Term Notes, 6.95%, 4/1/2004 5,000,000 5,064,300
Federal National Mortgage Association:
Coupon Strips, 0%, 4/8/2001 5,500,000 5,074,701
Coupon Strips, 0%, 7/24/2001 1,227,000 1,108,010
Medium-Term Notes, 7.18%, 10/1/2003 3,000,000 2,974,920
Principal Strips, 0%, 8/7/2001 6,000,000 5,405,100
Tennessee Valley Authority,
Valley Indexed Principal Securities,
3.375%, 1/15/2007 11,093,000 (a) 10,829,930
51,593,386
U.S. GOVERNMENT--46.5%
U.S. Treasury Bonds,
10.75%, 5/15/2003 10,000,000 11,395,400
U.S. Treasury Inflation Protection Securities:
3.375%, 1/15/2007 19,700,000 (a) 19,875,527
3.625%, 1/15/2008 20,000,000 (a) 20,035,400
U.S. Treasury Notes:
5.875%, 10/31/2001 60,500,000 60,371,740
5.875%, 11/30/2001 47,500,000 47,398,350
5.875%, 11/15/2004 13,400,000 13,272,164
6%, 8/15/2004 22,000,000 21,882,080
6%, 8/15/2009 8,000,000 7,900,880
202,131,541
U.S. GOVERNMENT AGENCY/MORTGAGE-BACKED--28.9%
Federal Home Loan Mortgage:
REMIC, Multiclass Mortgage Participation Ctfs.,
Ser. 1978, Cl. PH, 7%, 1/15/2024
(Interest Only Obligation) 4,451,239 (b) 612,045
Structured Pass-Through Ctfs.,
Ser. T-22, Cl. A6, 7.05%, 11/25/2029 5,000,000 4,962,500
Federal National Mortgage Association:
6%, 10/1/2013 28,169,108 27,007,133
7.5%, 12/15/2029 20,000,000 (c) 19,962,400
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (continued) Amount ($) Value ($)
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U.S. GOVERNMENT AGENCY/MORTGAGE-BACKED (CONTINUED)
Federal National Mortgage Association (continued):
REMIC Trust, Gtd. Pass-Through Ctfs.:
Ser. 1995-W1, Cl. A6, 8.1%, 4/25/2025 5,935,711 5,987,649
Ser. 1997-56, Cl. PM, 7%, 6/18/2026
(Interest Only Obligation) 3,000,000 (b) 774,840
Ser. 1998-49, Cl. MA, 6.5%, 10/17/05 7,606,444 7,541,074
Government National Mortgage Association I,
8%, 12/15/2029 20,000,000 (c) 20,350,000
Government National Mortgage Association II,
Adjustable Rate Mortgage,
6%, 1/20/2030 2,300,000 (c) 2,284,906
U.S. Government Gtd. Development,
Participation Ctfs.
(Gtd. By U.S. Small Business Administration):
Ser. 1997-20E, 7.3%, 5/1/2017 6,255,654 6,235,040
Ser. 1997-20F, 7.2%, 6/1/2017 4,139,193 4,112,467
Ser. 1997-20G, 6.85%, 7/1/2017 11,276,521 11,030,916
Ser. 1998-20E, 6.3%, 5/1/2018 1,876,736 1,782,772
Ser. 1998-20J, 5.5%, 10/1/2018 4,323,670 3,939,827
Ser. 1998-20L, 5.8%, 12/1/2018 9,841,175 9,102,962
125,686,531
TOTAL BONDS AND NOTES
(cost $384,049,198) 379,411,458
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SHORT-TERM INVESTMENTS--44.8%
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REPURCHASE AGREEMENTS;
UBS Securities, 5.58%
Dated 11/30/1999, due 12/1/1999 in the
amount of $194,965,215 (fully collateralized by
$204,518,000 U.S. Treasury Bills,
5/4/2000-7/20/2000 value $198,836,827)
(cost $194,935,000) 194,935,000 194,935,000
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TOTAL INVESTMENTS (cost $578,984,198) 132.1% 574,346,458
LIABILITIES, LESS CASH AND RECEIVABLES (32.1%) (139,564,222)
NET ASSETS 100.0% 434,782,236
(A) PRINCIPAL AMOUNT FOR ACCRUAL PURPOSES IS PERIODICALLY ADJUSTED BASED ON CHANGES TO THE CONSUMER PRICE INDEX.
(B) NOTIONAL FACE AMOUNT SHOWN.
(C) PURCHASED ON A FORWARD COMMITMENT BASIS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF SECURITIES SOLD SHORT
November 30, 1999
Principal
NOTES Amount ($) Value ($)
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U.S. Treasury Notes, 6%, 8/15/2009
<S> <C> <C>
(proceeds $15,090,141) 15,000,000 14,814,150
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
<TABLE>
<CAPTION>
Cost Value
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ASSETS ($):
<S> <C> <C>
Investments in securities--See Statement of Investments
(including Repurchase Agreements of $194,935,000)
--Note 1(b) 578,984,198 574,346,458
Receivable for investment securities sold 15,874,176
Receivable from brokers for proceeds on securities sold short 15,090,141
Interest receivable 3,158,240
Receivable for shares of Beneficial Interest subscribed 51,268
Prepaid expenses and other assets 58,462
608,578,745
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 222,136
Cash overdraft due to Custodian 2,279,624
Payable for investment securities purchased 153,597,811
Securities sold short, at value (proceeds $15,090,141)--
See Statement of Securities Sold Short 14,814,150
Payable for shares of Beneficial Interest redeemed 2,769,702
Accrued expenses 113,086
173,796,509
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NET ASSETS ($) 434,782,236
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 489,212,952
Accumulated undistributed investment income--net 72,014
Accumulated net realized gain (loss) on investments
and securities sold short (50,140,981)
Accumulated net unrealized appreciation (depreciation)
on investments and securities sold short--Note 4(b) (4,361,749)
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NET ASSETS ($) 434,782,236
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SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
41,705,615
NET ASSET VALUE, offering and redemption price per share ($) 10.43
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended November 30, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME ($):
<S> <C>
INTEREST INCOME 31,245,222
EXPENSES:
Management fee--Note 3(a) 2,324,856
Shareholder servicing costs--Note 3(b) 744,302
Professional fees 55,338
Trustees' fees and expenses--Note 3(c) 55,274
Custodian fees--Note 3(b) 47,773
Prospectus and shareholders' reports 41,895
Registration fees 37,554
Loan commitment fees--Note 2 4,553
Miscellaneous 12,825
TOTAL EXPENSES 3,324,370
INVESTMENT INCOME--NET 27,920,852
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactions (20,301,733)
Short sale transactions 4,757,032
NET REALIZED GAIN (LOSS) (15,544,701)
Net unrealized appreciation (depreciation) on investments
and securities sold short (2,139,885)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (17,684,586)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 10,236,266
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------
1999 1998
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OPERATIONS ($):
<S> <C> <C>
Investment income--net 27,920,852 32,639,194
Net realized gain (loss) on investments (15,544,701) 1,956,888
Net unrealized appreciation (depreciation)
on investments (2,139,885) (1,581,674)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 10,236,266 33,014,408
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DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (27,880,155) (32,804,499)
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BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 146,416,081 162,536,723
Dividends reinvested 22,936,354 26,502,951
Cost of shares redeemed (204,640,779) (189,707,314)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (35,288,344) (667,640)
TOTAL INCREASE (DECREASE) IN NET ASSETS (52,932,233) (457,731)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 487,714,469 488,172,200
END OF PERIOD 434,782,236 487,714,469
Undistributed investment income--net 72,014 31,317
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 13,793,084 14,998,195
Shares issued for dividends reinvested 2,169,933 2,446,543
Shares redeemed (19,323,645) (17,512,879)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (3,360,628) (68,141)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Year Ended November 30,
--------------------------------------------
1999 1998 1997 1996 1995
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PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 10.82 10.82 10.95 11.06 10.57
Investment Operations:
Investment income--net .63 .74 .66 .65 .73
Net realized and unrealized
gain (loss) on investments (.39) .01 (.13) (.11) .49
Total from Investment Operations .24 .75 .53 .54 1.22
Distributions:
Dividends from investment income--net (.63) (.75) (.66) (.65) (.73)
Net asset value, end of period 10.43 10.82 10.82 10.95 11.06
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 2.33 7.21 4.93 5.08 11.91
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .71 .70 .74 .74 .66
Ratio of net investment income
to average net assets 6.00 6.85 6.13 5.99 6.73
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- .01 -- .09
Portfolio Turnover Rate 1,096.12 902.14 818.39 594.44 387.60
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 434,782 487,714 488,172 569,319 573,681
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
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"), which is a wholly-owned subsidiary of Mellon Financial
Corporation. 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 Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 $47,171,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1999. This
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in accordance with generally accepted accounting
principles. 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, $4,273,000
expires in fiscal 2005 and $13,323,000 expires in fiscal 2007.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "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, 1999, 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 bor-
rowings, 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, 1999, 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, 1999, the fund was charged $402,898 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, 1999, the fund was charged $183,874 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, 1999, the fund was
charged $47,773 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 $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, during the period ended November 30, 1999:
Purchases ($) Sales ($)
- --------------------------------------------------------------------------------
Long transactions 4,650,512,595 4,732,815,689
Short sale transactions 4,523,012,609 4,542,859,782
TOTAL 9,173,525,204 9,275,675,471
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 or custodian, of cash and/or
U.S. Government securities sufficient to cover the short position. Securities
sold short at November 30, 1999, and their related market values and proceeds
are set forth in the Statement of Securities Sold Short.
(b) At November 30, 1999, accumulated net unrealized depreciation on investments
and securities sold short was $4,361,749, consisting of $372,360 gross
unrealized appreciation and $4,734,109 gross unrealized depreciation.
At November 30, 1999, 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).
REPORT OF 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 statements of investments and
securities sold short, as of November 30, 1999, 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, 1999 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, 1999, 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 4, 2000
The Fund
NOTES
For More Information
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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 542AR9911
