Dreyfus BASIC Municipal Money Market Portfolio
ANNUAL REPORT August 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the 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 portfolio could be adversely affected if the computer systems used by The
Dreyfus Corporation and the portfolio'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 portfolio
invests may be adversely affected by Year 2000-related problems. This could have
an impact on the value of the portfolio's investments and its share price.
Contents
THE PORTFOLIO
- ------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
19 Report of Independent Auditors
20 Important Tax Information
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus BASIC Municipal Money Market Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus BASIC Municipal Money
Market Portfolio, covering the 12-month period from September 1, 1998 through
August 31, 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, Jill Shaffro McGovern.
When the period began, financial crises in overseas markets produced concerns
among investors that economies in the U.S. and abroad might slow. In response,
the Federal Reserve Board reduced short-term interest rates in an attempt to
stimulate economic growth. Its strategy apparently worked, because signs of
renewed economic strength became evident early in 1999, fueling fears that
inflationary pressures might re-emerge. The Federal Reserve then reversed
course, raising short-term interest rates twice during the summer of 1999 and
effectively reversing most of last fall's interest-rate cuts.
Tax-exempt money market yields were also influenced by supply-and-demand
factors. Strong economic conditions have curtailed many municipalities' need to
borrow over the short term, reducing the available supply of tax-exempt money
market securities. Yet, investor demand remained strong from individuals seeking
to minimize their tax liabilities. This imbalance helped constrain the rise of
tax-exempt money market yields relative to taxable money market yields during
the first eight months of 1999.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus BASIC Municipal Money Market Portfolio
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
September 14, 1999
DISCUSSION OF PERFORMANCE
Jill Shaffro McGovern, Portfolio Manager
How did Dreyfus BASIC Municipal Money Market Portfolio perform?
For the 12-month period ended August 31, 1999, the portfolio produced a
tax-exempt yield of 2.86%. Taking into account the effects of compounding, the
portfolio provided an effective yield of 2.90%.(1) The fund provided a total
return of 2.90%(2) compared to the Lipper Tax-Exempt Money Market Funds category
average return of 2.63% over the same period.(3)
What is the portfolio's investment approach?
Our goal is to seek a high level of federally tax-exempt income while
maintaining a stable $1.00 share price. We are especially vigilant in our
efforts to preserve capital.
To achieve this objective, we employ two primary strategies. First, we attempt
to add value by constructing a diverse portfolio of high-quality, tax-exempt
money market instruments. Second, we actively manage the portfolio's average
maturity in anticipation of interest rate trends and supply-and-demand changes
in the short-term municipal marketplace.
For example, if we expect an increase in short-term supply as many states and
municipalities currently issue short-term debt, we may decrease the average
maturity of the fund to enable it to purchase new securities with higher yields.
That' s because yields tend to rise if many issuers are competing for investor
interest. New securities are generally issued with maturities in the one-year
range, which will lengthen the fund's average maturity. If we expect demand to
surge at a time when we anticipate little issuance and, therefore, lower yields,
we may increase the portfolio's average maturity to maintain current yields for
as long as practical. At other times, we try to maintain an average maturity
that reflects our view of short-term interest rate trends and future
supply-demand considerations.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, the Federal Reserve Board and other central banks
moved quickly to soften the effects of weakening foreign economies and sustain
domestic economic growth. They did so by reducing key short-term interest rates,
which was intended to help boost economic activity and to ease less
accommodative financial conditions domestically. An additional consequence was
lower yields on money market securities.
The Federal Reserve Board's strategy was apparently successful: evidence emerged
in 1999 that economies in Japan and Southeast Asia had begun to recover, and the
growth of the U.S. economy was stronger than most analysts expected. In the
United States, consumer confidence was at a 30-year high, and employment was
strong, with hourly wages rising.
This positive economic news raised concerns among fixed-income investors that
inflation pressures might re-emerge. In response, the Federal Reserve Board
increased short-term interest rates twice during the summer of 1999, effectively
offsetting most of last fall's rate cuts. Because the market anticipated this
change in monetary policy in the weeks before it was announced, short-term,
tax-exempt yields rose during the second quarter.
Tax-exempt money market yields did not rise as much as comparable taxable
yields, primarily because many states and municipalities throughout the country
have enjoyed higher tax revenues during this period of economic prosperity. As a
result, many of these government entities have had little need to borrow in
order to satisfy their short-term obligations. The relative lack of supply amid
steady investor demand helped constrain the rise of short-term, tax-exempt
yields.
What is the portfolio's current strategy?
We have continued to focus on very high-quality, liquid money market instruments
from a wide array of issuers. Some of the most frequently used instruments
include Variable Rate Demand Notes (VRDNs), which are issued by investment banks
through the securitization of longer term municipal bonds. Because VRDNs can be
redeemed at the buyer's option after either one day or seven days, they afford
the fund a high degree of liquidity as well as high credit quality. Accordingly,
as of August 31, much of the portfolio was composed of VRDNs. The remainder was
comprised primarily of tax-exempt commercial paper and tax-exempt notes
As of August 31, the portfolio's average maturity was at 58 days. Our strategy
has been to retain the flexibility we need to capture competitive yields while
remaining capable of responding quickly to changing market conditions. We are
looking forward to the expected relatively heavy issuance of short-term,
tax-exempt securities by issuers in Texas, New Jersey and California. As we move
into the fourth quarter we will attempt to shorten the fund's average maturity
while waiting for further clarification of Fed policy.
September 14, 1999
(1) EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND REINVESTED
MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS FLUCTUATE.
AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
OTHER GOVERNMENT AGENCY. ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF
YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN
THE PORTFOLIO.
(2) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS. INCOME MAY BE SUBJECT TO
STATE AND LOCAL TAXES, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE
MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
(3) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS (STATEMENT OF INVESTMENTS
August 31, 1999
CONTINUED)
Principal
TAX EXEMPT INVESTMENTS--99.5% Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA--4.8%
California Higher Education Loan Authority Inc.,
Student Loan Revenue
3.55%, Series C, 7/1/2000
<S> <C> <C>
(LOC; Student Loan Marketing Association) 19,000,000 19,000,000
California School Cash Reserve Program Authority
4%, Series A, 7/3/2000 (Insured; AMBAC) 10,000,000 10,072,956
COLORADO--2.5%
Colorado Student Obligation Bond Authority,
Student Loan Revenue, VRDN
3.35%, Series A (LOC; Student Loan Marketing Association) 15,000,000 (a) 15,000,000
DISTRICT OF CLOUMBIA--1.6%
District of Columbia, TRAN 3.75%,
Series B, 9/30/1999 (LOC: Canadian Imperial Bank of
Commerce, Morgan Guaranty Trust Co. and Societe Generale) 10,000,000 10,005,027
FLORIDA--3.2%
Pinellas County Health Facility Authority, Revenue,
Refunding, VRDN (Pooled Hospital Loan Program)
3.05% (Insured; AMBAC and Liquidity Facility; Sun Bank) 4,500,000 (a) 4,500,000
Sunshine Governmental Finance Commission, Revenue, CP
3.40%, Series B, 10/13/1999 (Insured; AMBAC and
Liquidity Facility: Toronto-Dominion Bank and
Union Bank of Switzerland) 15,000,000 15,000,000
GEORGIA--6.9%
Fulton County School District, Construction Sales,
TAN 3.25%, 12/31/1999 10,000,000 10,007,062
Gwinnett County School District,
Construction Sales 3.50%, 12/31/1999 11,800,000 11,818,533
Savannah Economic Development Authority,
Exempt Facility Revenue, VRDN (Home Depot Project)
3.40%, Series A (Corp. Guaranty; Home Depot) 20,000,000 (a) 20,000,000
ILLINOIS--5.5%
City of Chicago 2.85%, 10/28/1999
(LOC; Morgan Guaranty Trust Co.) 10,000,000 10,000,000
Chicago Midway Airport, Revenue, VRDN (Second Lien)
3.10%, Series B (Insured; MBIA and LOC; Commerzbank) 5,500,000 (a) 5,500,000
Illinois Health Facilities Authority, Revenue,
VRDN (Northwestern Memorial Hospital)
2.95% (LOC; Northern Trust Co.) 6,000,000 (a) 6,000,000
Madison County, Environmental Improvement Revenue, VRDN
3.05%, Series A (Corp. Guaranty; Shell Oil Co.) 12,000,000 (a) 12,000,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
INDIANA--4.4%
Indiana Bond Bank Advance Funding Program
3.50%, Series A-2, 1/19/2000 10,000,000 10,009,774
Indiana Secondary Market Educational Loans Inc.,
Education Loan Revenue, VRDN
3.35%, Series B (Insured; AMBAC and LOC;
Student Loan Marketing Association) 7,000,000 (a) 7,000,000
Petersburg, SWDR, VRDN (Indiana Power and Light Co. Project)
3.35% Series A (Corp. Guaranty;
Indiana Power and Light Co.) 10,000,000 (a) 10,000,000
IOWA--2.4%
Louisa County, PCR, Refunding, VRDN
(Midwest Power System Inc. Project) 3.35% 14,900,000 (a) 14,900,000
KENTUCKY--5.5%
City of Carroll, Collateralized Solid Waste
Disposal Facilities Revenue, VRDN
(Utilities Co. Project) 3.10%, Series A 23,700,000 (a) 23,700,000
Kentucky Association of Counties Advance Revenue
Cash Flow Borrowing Program, COP, TRAN
4%, 6/30/2000 10,000,000 10,043,997
LOUISIANA--9.5%
Ascension Parish, Revenue, VRDN (B.A.S.F. Corp. Project)
3% (Corp. Guaranty; B.A.S.F. Corp.) 7,000,000 (a) 7,000,000
East Baton Rouge Parish, PCR, Refunding,
VRDN (Exxon Project)
2.80% (Corp. Guaranty; Exxon Corp. and
Liquidity Facility; Credit Suisse) 5,400,000 (a) 5,400,000
New Orleans Aviation Board, VRDN
(Passenger Facility Charge Projects)
3.50% (LOC: Banque Paribas and Canadian
Imperial Bank of Commerce) 11,000,000 (a) 11,000,000
Plaquemines Parish, Environmental Revenue, Refunding, VRDN
(British Petroleum Exploration and Oil)
3.05% (Corp. Guaranty; British Petroleum) 6,200,000 (a) 6,200,000
Plaquemines Port, Harbor and Terminal District,
Port Facilities Revenue
(International Marine Terminal Project)
3%, Series B, 3/15/2000 (LOC; Morgan Guaranty Trust Co.) 5,775,000 5,775,000
West Baton Rouge Parish Industrial District Number 3,
Revenue, VRDN
(Dow Chemical Co. Project) 3.15%, Series A
(Corp. Guaranty; Dow Chemical Co.) 22,600,000 (a) 22,600,000
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
MARYLAND--2.8%
Maryland Community Development Administration,
Department Housing and Community Development
(Residential) 3.15%, Series B, 1/14/2000 17,000,000 17,000,000
MICHIGAN--1.5%
Grand Rapids Economic Development Corporation,
Revenue, VRDN
(Amway/Grand Plaza Hotel Facility # 1) 3.25%
(LOC; Old Kent Bank and Trust) 4,000,000 (a) 4,000,000
Michigan Higher Education Student Loan Authority,
Revenue, VRDN
3.30%, Series XII-F (Insured; AMBAC and
Liquidity Agreement; Sumitomo Bank) 5,000,000 (a) 5,000,000
MINNESOTA--2.3%
Minnesota Higher Education Coordinating Board,
Revenue, VRDN
3.30% (LOC; Norwest Bank of Minnesota) 14,000,000 (a) 14,000,000
MISSOURI--2.5%
Missouri Higher Education Loan Authority,
Student Loan Revenue, Refunding, VRDN
3.50%, Series B (Insured; MBIA and SBPA;
NMB Post Bank Group) 9,500,000 (a) 9,500,000
St. Louis General Fund, Revenue, TRAN 4%, 6/30/2000 6,000,000 6,036,061
NEW HAMPSHIRE--3.0%
State of New Hampshire Business Finance Authority,
PCR, CP (New England Power Co. Project)
3.40%, Series A, 10/26/1999
(Corp. Guaranty; New England Power Co.) 18,000,000 18,000,000
NEW MEXICO--1.7%
State of New Mexico, TRAN 4%, 6/30/2000 10,000,000 10,061,679
NEW YORK--3.9%
Long Island Power Authority, Electric Systems Revenue:
CP 3.30%, Sub-Series 3, 10/12/1999
(LOC: Bayerische Landesbank and Westdeutsche Landesbank) 10,000,000 10,000,000
VRDN 2.70%, Sub-Series 5 (LOC: ABN-Amro Bank
and Morgan Guaranty Trust Co.) 13,700,000 (a) 13,700,000
NORTH CAROLINA--.8%
Wake County Industrial Facility and Pollution Control
Financing Authority, Revenue, VRDN
(Carolina Power and Light Co. Project)
3.20% (LOC; First Union National Bank) 5,130,000 (a) 5,130,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
OHIO--6.0%
Montgomery County, HR, CP (Miami Valley Hospital)
3.35%, Series B, 10/22/1999
(Liquidity Facility; Morgan Guaranty Trust Co.) 15,000,000 15,000,000
Ohio Housing Finance Agency, Mortgage Revenue
(Residential) 3.05%, Series A-2, 3/1/2000 14,000,000 14,000,000
Summit County, BAN 3.80%, Series A, 6/1/2000 7,510,000 7,542,675
OKLAHOMA--.7%
Oklahoma Housing Finance Agency,
SFMR (Homeownership Loan Program)
3.50%, 9/1/1999 (Insured; FGIC) 4,440,000 4,440,000
OREGON--1.3%
Oregon Housing and Community Services Department, SFMR
3.45%, Series G, 6/29/2000 8,110,000 8,110,000
PENNSYLVANIA--2.5%
Allegheny County Hospital Development Authority,
HR (South Hills Health System)
3.15%, 4/1/2000 (LOC; PNC Bank of Ohio) 8,000,000 8,000,000
Pennsylvania Energy Development Authority,
Energy Development Revenue, VRDN
(B & W Ebensburg Project) 3.30% (LOC; Landesbank Hessen) 7,540,000 (a) 7,540,000
TENNESSEE--1.6%
Sevier County Public Building Authority,
Local Government Public Improvement, VRDN
3.25%, Series III-C-5 (Insured; AMBAC and LOC;
Landesbank Hessen) 10,000,000 (a) 10,000,000
TEXAS--15.3%
Brazos River Harbor Navigation District, Harbor Revenue,
VRDN (Dow Chemical Co. Project)
3.15% (Corp. Guaranty; Dow Chemical Co.) 22,300,000 (a) 22,300,000
El Paso Industrial Development Authority Inc., IDR,
VRDN (El Paso School District Limited Project)
3.30% (LOC; Chase Manhattan Bank) 2,400,000 (a) 2,400,000
Gulf Coast Industrial Development Authority,
SWDR, VRDN (Citgo Petroleum Project)
3.10% (LOC; Wachovia Bank of Georgia) 9,000,000 (a) 9,000,000
Gulf Coast Waste Disposal Authority,
SWDR, VRDN (Amoco Oil Co. Project)
3.05% (Corp. Guaranty; Amoco Credit Corp.) 15,300,000 (a) 15,300,000
North Texas Higher Education Authority Inc.,
Student Loan Revenue, Refunding, VRDN
3.35%, Series A (LOC; Student Loan Marketing Association) 10,500,000 (a) 10,500,000
The Portfolio
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Panhandle Plains Higher Education Authority Inc.,
Student Loan Revenue, VRDN
3.30%, Series A (LOC; Student Loan Marketing Association) 26,000,000 (a) 26,000,000
Port Development Corporation,
Marine Terminal Revenue, VRDN
(Pasadena Terminal Co. Inc., Project)
3.45% (LOC; ABN-Amro Bank) 2,420,000 (a) 2,420,000
State of Texas, TRAN 4.50%, Series A, 8/31/2000 5,000,000 5,038,550
UTAH--4.4%
Intermountain Power Agency, Power Supply Revenue, CP
3.20%, 9/16/1999
(Insured; AMBAC, Liquidity Facility; Morgan Guaranty Trust Co.
and LOC; Morgan Guaranty Trust Co.) 9,000,000 9,000,000
Utah Board of Regents, Student Loan Revenue,
Refunding, VRDN
3.35%, Series A (LOC; Student Loan
Marketing Association) 17,500,000 (a) 17,500,000
VIRGINIA--2.9%
Richmond Industrial Development Authority, Revenue, VRDN
(Cogentrix of Richmond Project):
3.35% Series A (LOC; Banque Paribas) 8,300,000 (a) 8,300,000
3.35% Series B (LOC; Banque Paribas) 6,000,000 (a) 6,000,000
Exempt Facilities 3.35%, Series A (LOC; Banque Paribas) 3,400,000 (a) 3,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $606,751,314) 99.5% 606,751,314
CASH AND RECEIVABLES (NET) .5% 2,780,571
NET ASSETS 100.0% 609,531,885
Summary of Abbreviations
AMBAC American Municipal Bond PCR Pollution Control Revenue
Assurance Corporation SBPA Standby Bond Purchase
BAN Bond Anticipation Notes Agreement
COP Certificate of Participation SFMR Single Family Mortgage Revenue
CP Commercial Paper SWDR Solid Waste Disposal Revenue
FGIC Financial Guaranty Insurance Company TAN Tax Anticipation Notes
HR Hospital Revenue TRAN Tax and Revenue Anticipation
IDR Industrial Development Revenue Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
MBIA Municipal Bond Investors
Assurance Insurance Corporation
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- -----------------------------------------------------------------------------------------------------------------------------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 98.6
AAA/AA(b) Aaa/Aa(b) AAA/AA(b) 1.4
100.0
</TABLE>
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO
PERIODIC CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF
THE ISSUERS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1999
Cost Value
- -------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 606,751,314 606,751,314
Cash 3,961,385
Interest receivable 4,051,213
Prepaid expenses 18,382
614,782,294
- -------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 154,972
Payable for investment securities purchased 5,038,550
Accrued expenses and other liabilities 56,887
5,250,409
- -------------------------------------------------------------------------------
NET ASSETS ($) 609,531,885
- -------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 609,659,093
Accumulated net realized gain (loss) on investments (127,208)
- -------------------------------------------------------------------------------
NET ASSETS ($) 609,531,885
- -------------------------------------------------------------------------------
SHARES OUTSTANDING
(3 billion shares of $.001 par value Common Stock authorized) 609,659,093
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended August 31, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 20,550,651
EXPENSES:
Management fee--Note 2(a) 3,105,954
Shareholder servicing costs--Note 2(b) 420,400
Custodian fees 63,082
Registration fees 50,351
Professional fees 40,968
Directors' fees and expenses--Note 2(c) 11,552
Prospectus and shareholders' reports 10,315
Miscellaneous 11,021
TOTAL EXPENSES 3,713,643
Less--reduction in management fee due to
undertaking--Note 2(a) (917,721)
NET EXPENSES 2,795,922
INVESTMENT INCOME--NET 17,754,729
- -------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($) 530
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 17,755,259
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Year Ended August 31,
----------------------------------
1999 1998
- -------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 17,754,729 20,842,818
Net realized gain (loss) from investments 530 (12,147)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 17,755,259 20,830,671
- -------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (17,754,729) (20,842,818)
- -------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share) ($):
Net proceeds from shares sold 511,053,083 562,832,805
Dividends reinvested 16,884,847 19,675,953
Cost of shares redeemed (533,875,712) (650,589,800)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (5,937,782) (68,081,042)
TOTAL INCREASE (DECREASE) IN NET ASSETS (5,937,252) (68,093,189)
- -------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of period 615,469,137 683,562,326
END OF PERIOD 609,531,885 615,469,137
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Year Ended August 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .029 .033 .033 .034 .037
Distributions:
Dividends from investment income--net (.029) (.033) (.033) (.034) (.037)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 2.90 3.31 3.31 3.42 3.80
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .45 .45 .45 .38 .14
Ratio of net investment income
to average net assets 2.86 3.26 3.26 3.40 3.73
Decrease reflected in above expense ratios
due to undertakings by the Manager .15 .17 .15 .22 .45
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 609,532 615,469 683,562 804,257 1,099,434
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Portfolio
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC Municipal Money Market Portfolio (the "portfolio") is a separate
non-diversified series of Dreyfus BASIC Municipal Fund, Inc. (the "fund") which
is registered under the Investment Company Act of 1940, as amended (the "Act"),
as an open-end management investment company and operates as a series company
currently offering four series including the portfolio. The portfolio' s
investment objective is to provide investors with as high a level of current
income exempt from Federal income tax as is consistent with the preservation of
capital and maintenance of liquidity. The Dreyfus Corporation (the "Manager")
serves as the portfolio's investment adviser. The Manager is a direct subsidiary
of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the distributor of
the portfolio's shares, which are sold to the public without a sales charge.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
It is the portfolio's policy to maintain a continuous net asset value per share
of $1.00; the portfolio has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so. There is no assurance,
however, that the portfolio will be able to maintain a stable net asset value
per share of $1.00.
The portfolio' 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 are valued at amortized cost,
which has been determined by the fund's Board of Directors to represent the fair
value of the portfolio's investments.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments,
is earned from settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the identified cost
basis. Cost of investments represents amortized cost. Under the terms of the
custody agreement, the portfolio received net earnings credits of $45,372 during
the period ended August 31, 1999 based on available cash balances left on
deposit. Income earned under this arrangement is included in interest income.
(c) Dividends to shareholders: It is the policy of the portfolio 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 portfolio 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 portfolio not to
distribute such gain.
(d) Federal income taxes: It is the policy of the portfolio to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Code, and to make
distributions of income and net realized capital gain sufficient to relieve it
from substantially all Federal income and excise taxes.
The portfolio has an unused capital loss carryover of approximately $128,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to August 31, 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, $1,700 of the carryover expires in fiscal 2001, $2,000 expires
in fiscal 2002, $50,300 expires in fiscal 2003, $36,000 expires in fiscal 2004,
$25,000 expires in fiscal 2005, $1,000 expires in fiscal 2006 and $12,000
expires in fiscal 2007.
At August 31, 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).
The Portfolio
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .50 of 1% of the value of the portfolio's average
daily net assets and is payable monthly. The Manager has undertaken, until such
time as it gives shareholders at least 90 days' notice to the contrary, to
reduce the management fee paid by the portfolio, to the extent that the
portfolio' s aggregate expenses, exclusive of taxes, brokerage, interest on
borrowings and extraordinary expenses, exceed an annual rate of .45 of 1% of the
value of the portfolio's average daily net assets. The reduction in management
fee, pursuant to the undertaking, amounted to $917,721 during the period ended
August 31, 1999.
(b) Under the Shareholder Services Plan, the portfolio 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 portfolio'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 portfolio and providing reports and other information,
and services related to the maintenance of shareholder accounts. During the
period ended August 31, 1999, the portfolio was charged $324,307 pursuant to the
Shareholder Services Plan.
The portfolio 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 portfolio. During the
period ended August 31, 1999, the portfolio was charged $60,604 pursuant to the
transfer agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus BASIC Municipal Money Market Portfolio
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus BASIC Municipal Money Market Portfolio
(one of the Series constituting Dreyfus BASIC Municipal Fund, Inc.) as of August
31, 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
Portfolio' 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 confirmation of
securities owned as of August 31, 1999 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus BASIC Municipal Money Market Portfolio at August 31, 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.
New York, New York
October 4, 1999
The Portfolio
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the portfolio hereby designates all the
dividends paid from investment income-net during the fiscal year ended August
31, 1999 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
For More Information
Dreyfus BASIC Municipal Money Market Portfolio
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
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) 1999 Dreyfus Service Corporation 122AR998
