Dreyfus BASIC Municipal Money Market Portfolio
SEMIANNUAL REPORT February 29, 2000
(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
Dreyfus and the portfolio'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 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
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 semiannual report for Dreyfus BASIC Municipal
Money Market Portfolio, covering the six-month period from September 1, 1999
through February 29, 2000. 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.
When the reporting period began, it became apparent that international and
domestic economies were growing faster than analysts expected, giving rise to
concerns that long-dormant inflationary pressures might re-emerge. Consumers
continued to spend heavily, unemployment levels reached new lows and the stock
market continued to climb.
Because unsustainable economic growth may trigger unwanted inflationary
pressures, the Federal Reserve Board raised key short-term interest rates twice
more during the reporting period. In total, the Federal Reserve Board raised
short-term interest rates by 1.00 percentage point since late June 1999, before
the current reporting period began. In this environment, yields on tax-exempt
money market securities rose.
We appreciate your confidence over the past six months, 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
March 23, 2000
DISCUSSION OF PERFORMANCE
Jill Shaffro, Portfolio Manager
How did Dreyfus BASIC Municipal Money Market Portfolio perform during the
period?
For the six-month period that began on September 1, 1999 and ended February 29,
2000, the portfolio produced an annualized tax-exempt yield of 3.11%. Taking
into account the effects of compounding, the portfolio provided an annualized
effective yield of 3.15%.(1)
What is the portfolio's investment approach?
The portfolio seeks 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.
In pursuing 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, we may decrease the
average maturity of the portfolio, which would enable us to purchase new
securities with higher yields. Yields tend to rise when there is an increase in
new-issue supply competing for investor interest. New securities are generally
issued with maturities in the one-year range, which will lengthen the
portfolio' s weighted average maturity. If we anticipate limited new-issue
supply, we may extend 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-and-demand considerations.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
The portfolio was influenced by robust U.S. economic growth and rising interest
rates throughout the six-month reporting period.
By the time the reporting period began on September 1, 1999, it was clear that
economic growth in the United States and overseas was stronger than many
analysts had expected. In the U.S., consumer confidence had reached a 30-year
high, oil prices had bounced back from the previous year's lows, and employment
was strong with hourly wages rising. These economic forces raised concerns among
fixed-income investors that long-dormant inflationary pressures might re-emerge.
In response, the Federal Reserve Board increased short-term interest rates twice
during the summer of 1999, before the start of the six-month reporting period.
The Fed then implemented two additional rate hikes in November and February,
during the reporting period, for a total increase of 1.00 percentage point since
last summer.
Although these interest-rate increases caused short-term tax-exempt yields to
rise throughout the reporting period, tax-exempt money market yields did not
rise as much as comparable taxable yields. That's because many states and
municipalities enjoyed higher tax revenues during this period of economic
prosperity. As a result, many municipalities had less need to borrow to satisfy
their short-term obligations.
What is the portfolio's current strategy?
We have continued to manage the portfolio's average maturity according to our
supply-and-demand expectations. Accordingly, we adopted a relatively long
average maturity last fall to maintain competitive yields during a time of
little new issuance. We later allowed the portfolio's average maturity to
decline naturally as existing holdings matured, enabling us to capture then
prevailing higher yields during the fourth quarter of 1999, when issuance
increased. We again extended the average maturity toward the end of the year to
take advantage of market weakness in advance of potential Year 2000 concerns,
which ultimately proved unfounded. We ended the reporting period with a weighted
average maturity that was slightly longer than neutral. This position was
designed to maintain competitive yields through March, typically a low-issuance
month.
Our security selection strategy continued to focus on very high quality, liquid
money market instruments from an array of issuers. Some of the most frequently
used instruments included Variable Rate Demand Notes (VRDNs), which feature
adjustable yields, short maturities, and afford the portfolio a high degree of
liquidity and credit quality. Toward the end of the reporting period, we
modestly reduced our holdings of VRDNs in favor of tax-exempt commercial paper
with maturities in the three- to nine-month range, which helped us extend the
portfolio' s average weighted maturity. These securities offered a high level of
liquidity, strong credit characteristics and competitive yields. Of course,
portfolio composition will change over time.
March 23, 2000
(1) ANNUALIZED 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 $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THE PORTFOLIO.
The Portfolio
STATEMENT OF INVESTMENTS
February 29, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
Principal
TAX EXEMPT INVESTMENTS-98.2% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA--4.6%
Decatur, IDB, SWDR, VRDN (Trico Steel Co. LLC Project)
4% (LOC; Chase Manhattan Bank) 25,000,000 (a) 25,000,000
CALIFORNIA--5.3%
California Higher Education Loan Authority Inc.,
Student Loan Revenue
3.55%, Series C, 7/1/2000
(LOC; Student Loan Marketing Association) 19,000,000 19,000,000
California School Cash Reserve Program Authority
4%, Series A, 7/3/2000 (Insured; AMBAC) 10,000,000 10,029,564
COLORADO--2.7%
Colorado Student Obligation Bond Authority,
Student Loan Revenue, VRDN
3.95%, Series A
(LOC; Student Loan Marketing Association) 15,000,000 (a) 15,000,000
DISTRICT OF COLUMBIA--.9%
District of Columbia, Revenue, VRDN
(George Washington University)
3.90%, Series B (Insured; MBIA and Liquidity
Facility; Bank of America) 5,000,000 (a) 5,000,000
FLORIDA--1.7%
Sarasota County Public Hospital District, HR, CP
(Memorial Hospital Project)
3.80%, Series A (LOC; SunTrust Bank) 9,045,000 9,045,000
GEORGIA--3.7%
Savannah Economic Development Authority, Exempt
Revenue, VRDN (Home Depot Project)
4.04%, Series A (Corp. Guaranty; Home Depot) 20,000,000 (a) 20,000,000
ILLINOIS--2.7%
Cook County, GO
6.30%, 11/1/2000 (Insured; AMBAC) 3,000,000 3,043,761
Cook County, Capital Improvement, Refunding, GAN
5%, 11/15/2000 (Insured; FGIC) 4,540,000 4,569,476
Illinois Development Finance Authority, Revenue,
Refunding (Provena Health)
4.50%, Series A, 5/15/2000 (Insured; MBIA) 2,630,000 2,633,672
Village of Lombard, MFHR (Clover Creek)
4.05%, 12/15/2000 (LOC; Bank One of Arizona) 4,800,000 4,800,000
INDIANA--5.6%
Indiana Bond Bank Advance Funding Program
4.75%, Series A-2, 1/18/2001 (LOC; Bank of America) 8,000,000 8,039,420
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
INDIANA (CONTINUED)
Indiana Health Facility Authority, Revenue, VRDN
(Ascension Health Credit) 3.75% 10,000,000 (a) 10,000,000
State of Indiana, University Revenues, Prerefunded
(Student Fee) 7%, Series G, 8/1/2000 2,535,000 2,615,784
Petersburg, SWDR, VRDN
(Indiana Power and Light Co. Project)
3.95% Series A (Corp. Guaranty; Indiana Power
and Light Co. Project) 10,000,000 (a) 10,000,000
IOWA--1.8%
Louisa County, PCR, Refunding, VRDN
(Midwest Power System Inc. Project) 3.95% 10,000,000 (a) 10,000,000
KANSAS--1.7%
Wichita, Water and Sewer Utility Revenue
6.50%, 10/1/2000 (Insured; FGIC) 1,850,000 1,874,785
Wyandotte County Government Temporary Notes
(Kansas City University):
4.30%, Series 8, 12/1/2001 4,015,000 4,015,000
4.40%, Series 5, 12/1/2001 1,262,500 1,262,500
4.40%, Series 6, 12/1/2001 2,095,750 2,095,750
KENTUCKY--6.2%
City of Carroll, Collateralized Solid Waste Disposal Facilities
Revenue, VRDN (Kentucky Utilities Co. Project)
3.95%, Series A (Corp. Guaranty; Kentucky 23,700,000 (a) 23,700,000
Utilities Co.)
Kentucky Association of Counties Advance Revenue Cash
Flow Borrowing Program, COP, TRAN 4%, 6/30/2000 10,000,000 10,017,570
LOUISIANA--4.7%
Plaquemines Port, Harbor and Terminal District, Port
Facilities Revenue
(International Marine Terminal Project)
3%, Series B, 3/15/2000
(LOC; Morgan Guaranty Trust Co.) 5,775,000 5,775,000
West Baton Rouge Parish Industrial District Number 3,
Revenue, VRDN (Dow Chemical Co. Project)
4%, Series A (Corp. Guaranty; Dow Chemical Co.) 20,000,000 (a) 20,000,000
MICHIGAN--3.2%
Grand Rapids Economic Development Corporation,
Revenue, VRDN
(Amway/Grand Plaza Hotel Facility # 1)
3.75% (LOC; Old Kent Bank and Trust Co.) 4,000,000 (a) 4,000,000
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (CONTINUED)
Michigan Hospital Finance Authority, Revenue, Refunding
(Mid-Michigan Obligation Group)
4.75%, Series A 6/1/2000 (Insured; FSA) 1,750,000 1,752,476
Michigan South Central Power Agency, Power Supply
System Revenue, Refunding
5.20%,11/1/2000 (Insured; MBIA) 5,510,000 5,550,981
Michigan Strategic Fund, LOR, VRDN
(Pierce Foundation Project)
3.70% (LOC; Michigan National Bank) 6,000,000 (a) 6,000,000
MINNESOTA--2.8%
Minnesota Higher Education Coordinating Board, Revenue,
VRDN 3.95% (LOC; Norwest Bank of Minnesota) 15,500,000 (a) 15,500,000
MISSOURI--2.8%
Missouri Higher Education Loan Authority, Student Loan
Revenue, Refunding, VRDN
4%, Series B (Insured; MBIA and SBPA; NMB Post
Bank Group) 9,500,000 (a) 9,500,000
St. Louis General Fund, Revenue, TRAN 4%, 6/30/2000 6,000,000 6,014,401
NEVADA--.7%
Clark County, EDR, VRDN
(Lutheran Secondary School Association Project)
4% (LOC; Allied Irish Banks) 4,000,000 (a) 4,000,000
NEW HAMPSHIRE--4.5%
State of New Hampshire Business Finance Authority, PCR,
CP (New England Power Co. Project)
3.70%, Series B, 4/24/2000
(Corp. Guaranty; New England Power Co.) 18,000,000 18,000,000
Rockingham County, TAN 4.75%, 12/29/2000 6,500,000 6,523,388
NEW JERSEY--.9%
New Jersey Transport Authority, CP
3.85%, Series A, 3/10/2000 (Liquidity Facility: Bank of
Nova Scotia, Commerzbank and Toronto-Dominion Bank) 5,000,000 5,000,000
NEW MEXICO--1.8%
State of New Mexico, TRAN 4%, 6/30/2000 10,000,000 10,024,631
NEW YORK--1.7%
Suffolk County, TAN 4.50%, Series 1, 8/10/2000
(LOC: Credit Local de France, Landesbank Hessen and
West Deutchlandesbank) 9,000,000 9,019,375
OHIO--6.1%
Hillard School District, BAN 4.59%, 5/25/2000 5,000,000 5,008,023
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Ohio Housing Finance Agency, Mortgage Revenue
(Residential) 3.05%, Series A-2, 3/1/20003 14,000,000 14,000,000
Ohio Water Development Authority, Pollution Control
Facility, Revenue, Refunding, VRDN
(Duquesne Light Co.)
4%, Series A (Insured; AMBAC and Liquidity
Facility; The Bank of New York) 7,000,000 (a) 7,000,000
Summit County, BAN 3.80%, Series A, 6/1/2000 7,510,000 7,520,971
OREGON--1.5%
Oregon Housing and Community Services Department, SFMR
3.45%, Series G, 6/29/2000 8,110,000 8,110,000
PENNSYLVANIA--5.5%
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
Emmaus General Authority, Revenue, VRDN
3.85% (Insured; FSA and Liquidity Facility; First Union
National Bank) 15,000,000 (a) 15,000,000
Pennsylvania Energy Development Authority, Energy
Development Revenue, VRDN
(B & W Ebensburg Project)
3.95% (LOC; Landesbank Hessen) 6,985,000 (a) 6,985,000
SOUTH CAROLINA--.3%
Lexington County Health Services District Inc.,
Hospital Improvement Revenue, Refunding
4.25%, 11/1/2000 (Insured; FSA) 1,665,000 1,666,005
TENNESSEE--1.8%
Sevier County Public Building Authority, Local Government
Public Improvement, VRDN
3.85%, Series III-C-5 (Insured; AMBAC and LOC;
Landesbank Hessen) 10,000,000 (a) 10,000,000
TEXAS--14.1%
Brazos River Harbor Navigation District, Harbor Revenue,
VRDN (Dow Chemical Co. Project)
4% (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)
3.90% (LOC; Chase Manhattan Bank) 2,400,000 (a) 2,400,000
Gulf Coast Industrial Development Authority, SWDR,
VRDN (Citgo Petroleum Project)
3.95% (LOC; Wachovia Bank of Georgia) 14,000,000 (a) 14,000,000
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Harris County Health Facilities Development Corporation,
HR, VRDN (Texas Children's Hospital)
3.95%, Series B-1 (Insured; MBIA and Liquidity Facility;
Morgan Guaranty Trust Co.) 5,000,000 (a) 5,000,000
Panhandle Plains Higher Education Authority Inc., Student
Loan Revenue, VRDN
3.95%, Series A
(LOC; Student Loan Marketing Association) 20,000,000 (a) 20,000,000
Port Development Corporation, Marine Terminal Revenue,
VRDN (Pasadena Terminal Co. Inc., Project)
4.10% (LOC; ABN-Amro Bank) 2,420,000 (a) 2,420,000
State of Texas, TRAN 4.50%, Series A, 8/31/2000 10,000,000 10,032,449
West Texas Municipal Power Agency, Electric Revenue
4.20%, 2/15/2001 (Insured; MBIA) 1,000,000 999,973
UTAH--1.2%
Utah Housing Finance Agency, Multi-Family Housing,
Refunding, VRDN (Candlestick)
3.93% (LOC; Bank One Corp.) 6,400,000 (a) 6,400,000
VIRGINIA--4.2%
Hopewell Industrial Development Authority, Exempt
Facilities, Revenue, VRDN (Hadson Power 13)
3.95%, Series A (LOC; Credit Suisse) 5,000,000 (a) 5,000,000
Richmond Industrial Development Authority, Revenue,
VRDN (Cogentrix of Richmond Project):
4.10% Series A (LOC; Banque Paribas) 8,300,000 (a) 8,300,000
4.10% Series B (LOC; Banque Paribas) 6,000,000 (a) 6,000,000
Exempt Facilities 4.10%, Series A
(LOC; Banque Paribas) 3,400,000 (a) 3,400,000
WASHINGTON--1.7%
Washington Housing Finance Commission, Multi-Family
Revenue, Refunding, VRDN
(Avalon Ridge Apartments Project) 3.90% (LOC; FNMA) 9,255,000 (a) 9,255,000
WYOMING--1.8%
Unita County, PCR, Refunding (Chervon USA Inc. Project)
3.85%, 5/1/2000 (Corp. Guaranty; Chervon USA Inc.) 10,000,000 10,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $537,199,952) 98.2% 537,199,955
CASH AND RECEIVABLES (NET) 1.8% 10,068,960
NET ASSETS 100.0% 547,268,915
Summary of Abbreviations
AMBAC American Municipal Bond MBIA Municipal Bond Investors
Assurance Corporation Assurance Insurance
BAN Bond Anticipation Notes Corporation
COP Certificate of Participation MFHR Multi-Family Housing
CP Commercial Paper Revenue
EDR Economic Development Revenue PCR Pollution Control Revenue
FGIC Financial Guaranty SBPA Standby Bond Purchase
Investment Company Agreement
FNMA Federal National SFMR Single Family Mortgage
Mortgage Association Revenue
FSA Financial Security Assurance SWDR Solid Waste
GAN Grant Anticipation Notes Disposal Revenue
GO General Obligation TAN Tax Anticipation Notes
HR Hospital Revenue TRAN Tax and Revenue
IDB Industrial Development Board Anticipation Notes
IDR Industrial Development Revenue VRDN Variable Rate
LOC Letter of Credit Demand Notes
LOR Limited Obligation Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 90.4
AAA/AA (b) Aaa/Aa (b) AAA/AA (b) 8.4
Not Rated (c) Not Rated (c) Not Rated (c) 1.2
100.0
(A) SECURITIES PAYABLE ON DEMAND.VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF
THE ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE PORTFOLIO MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Portfolio
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 537,199,952 537,199,955
Cash 6,207,741
Interest receivable 4,011,361
Prepaid expenses 21,895
547,440,952
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 129,698
Accrued expenses and other liabilities 42,339
172,037
- --------------------------------------------------------------------------------
NET ASSETS ($) 547,268,915
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 547,396,120
Accumulated net realized gain (loss) on investments (127,208)
Accumulated gross unrealized appreciation on investments 3
- --------------------------------------------------------------------------------
NET ASSETS ($) 547,268,915
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(3 billion shares of $.001 par value Common Stock authorized) 547,396,120
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,953,399
EXPENSES:
Management fee--Note 2(a) 1,398,046
Shareholder servicing costs--Note 2(b) 168,328
Custodian fees 27,806
Professional fees 26,838
Registration fees 13,213
Prospectus and shareholders' reports 7,080
Directors' fees and expenses--Note 2(c) 4,508
Miscellaneous 7,198
TOTAL EXPENSES 1,653,017
Less--reduction in management fee due to
undertaking--Note 2(a) (394,395)
NET EXPENSES 1,258,622
INVESTMENT INCOME--NET 8,694,777
- --------------------------------------------------------------------------------
NET UNREALIZED APPRECIATION ON INVESTMENTS 3
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 8,694,780
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
February 29, 2000 Year Ended
(Unaudited) August 31, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 8,694,777 17,754,729
Net realized gain (loss) from investments -- 530
Net unrealized appreciation (depreciation)
on investments 3 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 8,694,780 17,755,259
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (8,694,777) (17,754,729)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 229,921,604 511,053,083
Dividends reinvested 8,245,591 16,884,847
Cost of shares redeemed (300,430,168) (533,875,712)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (62,262,973) (5,937,782)
TOTAL INCREASE (DECREASE) IN NET ASSETS (62,262,970) (5,937,252)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 609,531,885 615,469,137
END OF PERIOD 547,268,915 609,531,885
SEE NOTES TO FINANCIAL STATEMENTS.
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.
<TABLE>
Six Months
Ended
February 29,
2000 Year Ended August 31,
---------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning
of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .015 .029 .033 .033 .034 .037
Distributions:
Dividends from investment
income--net (.015) (.029) (.033) (.033) (.034) (.037)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.13(a) 2.90 3.31 3.31 3.42 3.80
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .45(a) .45 .45 .45 .38 .14
Ratio of net investment income
to average net assets 3.10(a) 2.86 3.26 3.26 3.40 3.73
Decrease reflected in
above expense ratios
due to undertakings by
The Dreyfus Corporation .14(a) .15 .17 .15 .22 .45
Net Assets, end of period
($ x 1,000) 547,269 609,532 615,469 683,562 804,257 1,099,434
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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., which is a wholly-owned subsidiary of Mellon Financial
Corporation. 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 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 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 $14,574 during the period ended
February 29, 2000 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
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 February 29, 2000, 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).
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 $394,395 during the period ended
February 29, 2000.
(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's and providing reports and other information,
and services related to the maintenance of shareholder accounts. During the
period ended February 29, 2000, the portfolio was charged $125,205 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 pro viding personnel and
facilities to perform transfer agency services for the fund. During the period
ended February 29, 2000, the portfolio was charged $27,731 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.
NOTE 3--Subsequent Event
At a meeting of the fund's Board of Directors held on January 19, 2000, the
Board approved the termination of the portfolio's Distribution Agreement with
Premier Mutual Services, Inc. and approved a new Distribution Agreement with
Dreyfus Service Corporation. The new Distribution Agreement with Dreyfus Service
Corporation became effective on March 22, 2000.
The Portfolio
NOTES
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
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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 122SA002
