LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report that during the latest six-month period ended
August 31, 1994, mostly through the second half of the period, the yield from
Dreyfus BASIC U.S. Government Money Market Fund rose steadily along with the
general rise in interest rates throughout the economy.
This increase, of course, can be attributed to the series of steps taken
by the Federal Reserve Board to tighten interest rates, as a way of
restraining the threat of inflation from increased economic activity in the
U.S. and among major trading nations abroad.
The Fund's annualized yield for the half-year was 3.77%, the equivalent
of an annualized effective yield of 3.83% after taking into account the
effect of compounding.*
To take maximum advantage of the repeated increases in interest rates, we
have kept the average maturities of your Fund's portfolio shorter, so that
maturing instruments could be readily replaced with new ones at higher
yields.
We intend to continue this strategy as long as we expect yields to
continue in an uptrend.
How long this will continue to be the case is difficult to forecast. At
the level of wholesale goods and primary materials prices, inflation is
clearly evident. As one example, the Commodities Research Bureau's spot price
index of raw industrial materials is up 22% from its 1993 low. The most
recent release by the Federal Reserve showed a sharp rise in the capacity
utilization rate to the highest level since 1989, approaching the break-even
level for inflation.
These price pressures, however, have not yet appeared in full force at
the retail level.
In view of the way the Federal Reserve has been putting on the brakes, it
would be no surprise if the economy paused to catch its breath. In just six
months, the central bank authorities have increased the Federal Funds rate
from 3% last January to 4 3/4% by the end of August, and the discount rate
from 3% to 4%.
As the past six months demonstrate, your Fund is well geared to keep pace
with these shifts in rates. As always, our objective continues to be to
obtain the best yields for you, while always emphasizing protection of the
underlying principal.
It is a pleasure to serve you in this way and we look forward to
continued opportunities to assist with your investment program.
Sincerely,
(Patricia A. Larkin Signature Logo)
Patricia A. Larkin
Portfolio Manager
September 22, 1994
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS AUGUST 31, 1994 (UNAUDITED)
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS-3.6% PURCHASE AMOUNT VALUE
------------ ------------- --------------
<S> <C> <C> <C>
2/9/95
(cost $9,780,638) ......................................... 5.03% $ 10,000,000 $ 9,780,638
==============
U.S. GOVERNMENT AGENCIES-69.1%
Federal Farm Credit Banks, Discount Notes
9/1/94..................................................... 4.60% $ 17,000,000 $ 17,000,000
12/6/94.................................................... 3.62 3,000,000 2,972,080
12/29/94................................................... 5.00 10,000,000 9,838,689
Federal Farm Credit Banks, Floating Rate Notes
5/26/95.................................................... 5.05(a) 10,000,000 10,000,000
Federal Home Loan Banks, Discount Notes
9/8/94..................................................... 4.36 5,000,000 4,995,810
2/8/95..................................................... 5.17 10,000,000 9,776,000
2/10/95.................................................... 5.06 33,600,000 32,853,072
2/21/95.................................................... 5.05 10,000,000 9,765,008
Federal Home Loan Banks, Floating Rate Notes
9/1/94..................................................... 3.01(a) 2,000,000 2,000,000
10/3/94.................................................... 3.20(a) 7,000,000 6,999,078
1/31/97.................................................... 5.33(a) 20,000,000 20,000,000
Federal National Mortgage Association, Discount Notes
12/16/94................................................... 4.70 5,000,000 4,932,425
1/30/95.................................................... 5.10 10,000,000 9,791,536
2/3/95..................................................... 5.05 10,000,000 9,787,306
2/17/95.................................................... 5.15 5,000,000 4,882,170
Federal National Mortgage Association, Floating Rate Notes
1/25/95.................................................... 5.05(a) 15,000,000 15,000,000
2/14/97.................................................... 5.23(a) 10,000,000 10,000,000
Student Loan Marketing Association, Floating Rate Notes
12/30/94................................................... 4.89(a) 2,110,000 2,110,234
3/20/95.................................................... 4.87(a) 2,200,000 2,204,085
8/7/95..................................................... 4.92(a) 2,200,000 2,200,884
3/20/96.................................................... 4.94(a) 1,000,000 1,000,698
--------------
TOTAL U.S. GOVERNMENT AGENCIES (cost $188,109,075)........... $188,109,075
==============
REPURCHASE AGREEMENTS-27.0%
Daiwa Securities America Inc.
dated 8/31/94, due 9/1/94 in the amount of $30,004,000
(fully collateralized by $30,145,000 U.S. Treasury
Notes 4.625%, due 12/31/94, value $30,336,580)............. 4.80% $ 30,000,000 $ 30,000,000
Kidder, Peabody & Co. Inc.
dated 8/31/94, due 9/1/94 in the amount of $8,465,129
(fully collateralized by $8,945,000 U.S. Treasury
Bills due 6/1/95, value $8,597,695)........................ 4.80 8,464,000 8,464,000
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994 (UNAUDITED)
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
REPURCHASE AGREEMENTS (CONTINUED) PURCHASE AMOUNT VALUE
------------ ------------- --------------
Yamaichi International (America) Inc.
dated 8/31/94, due 9/1/94 in the amount of $35,004,667
(fully collateralized by $35,680,000 U.S. Treasury
Bills due 11/10/94, value $35,369,881)..................... 4.80% $ 35,000,000 $ 35,000,000
--------------
TOTAL REPURCHASE AGREEMENTS (cost $73,464,000)................. $ 73,464,000
==============
TOTAL INVESTMENTS (cost $271,353,713)................. 99.7% $271,353,713
====== ==============
CASH AND RECEIVABLES (NET)............................ . .3% $ 691,289
====== ==============
NET ASSETS........................................... 100.0% $272,045,002
====== ==============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate-subject to periodic change.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1994 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value
(including repurchase agreements of $73, 464,000)-Note 1(a,b)......... $271,353,713
Cash.................................................................... 370,983
Interest receivable..................................................... 324,883
Prepaid expenses........................................................ 57,630
------------
272,107,209
LIABILITIES:
Payable for shares of Beneficial Interest redeemed...................... $ 4,994
Accrued expenses and other liabilities.................................. 57,213 62,207
--------- ------------
NET ASSETS ................................................................ $272,045,002
============
REPRESENTED BY:
Paid-in capital......................................................... $272,107,711
Accumulated net realized (loss) on investments.......................... (62,709)
--------------
NET ASSETS at value applicable to 272,107,711 outstanding shares of
Beneficial Interest, equivalent to $1.00 per share (unlimited number of
$.001 par value shares authorized)...................................... $272,045,002
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1994 (UNAUDITED)
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $ 4,902,030
EXPENSES:
Management fee-Note 2(a).............................................. $623,580
Shareholder servicing costs-Note 2(b)................................. 91,442
Registration fees..................................................... 47,831
Custodian fees........................................................ 15,395
Legal fees............................................................ 11,230
Trustees' fees and expenses-Note 2(c)................................. 9,628
Prospectus and shareholders' reports.................................. 4,934
Auditing fees......................................................... 4,598
Miscellaneous......................................................... 7,832
---------
816,470
Less-management fee waived due to
undertaking-Note 2(a)............................................. 623,580
---------
TOTAL EXPENSES.................................................. 192,890
--------------
INVESTMENT INCOME-NET....................................................... 4,709,140
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................ (58,975)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 4,650,165
--------------
--------------
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
FEBRUARY 28, AUGUST 31, 1994
1994 (UNAUDITED)
--------------- ----------------
OPERATIONS:
<S> <C> <C>
Investment income-net............................................. $ 6,646,915 $ 4,709,140
Net realized (loss) on investments................................ (3,118) (58,975)
--------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 6,643,797 4,650,165
--------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................. (6,667,922) (4,709,140)
--------------- ----------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold..................................... 443,808,311 188,293,817
Dividends reinvested.............................................. 6,396,795 4,456,911
Cost of shares redeemed........................................... (301,186,102) (186,337,523)
--------------- ----------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.... 149,019,004 6,413,205
--------------- ----------------
TOTAL INCREASE IN NET ASSETS................................ 148,994,879 6,354,230
NET ASSETS:
Beginning of period............................................... 116,695,893 265,690,772
--------------- ----------------
End of period..................................................... $265,690,772 $ 272,045,002
--------------- ----------------
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED FEBRUARY 28, SIX MONTHS ENDED
--------------------------- AUGUST 31, 1994
PER SHARE DATA: 1993(1) 1994 (UNAUDITED)
-------- ------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period.................... $1.0000 $1.0002 $1.0000
------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................................... .0315 .0324 .0190
Net realized (loss) on investments...................... .- (.0001) (.0002)
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS...................... .0315 .0323 .0188
------- ------- -------
DISTRIBUTIONS;
Dividends from investment income-net.................... (.0313) (.0325) (.0190)
------- ------- -------
Net asset value, end of period.......................... $1.0002 $1.0000 $ .9998
======= ======= =======
TOTAL INVESTMENT RETURN 3.69%(2) 3.30% 3.79%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. .- .02% .15%(2)
Ratio of net investment income to average net assets.... 3.58%(2) 3.24% 3.78%(2)
Decrease reflected in above expense ratios due to
undertakings by the Manager........................... .75%(2) .64% .50%(2)
Net Assets, end of period (000's Omitted)............... $116,696 $265,691 $272,045
- ---------------------------
(1) From April 24, 1992 (commencement of operations) to February 28, 1993.
(2) Annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. ("Premier") was
engaged as the Fund's distributor. Premier, located at One Exchange Place,
Boston, Massachusetts 02109, is a wholly-owned subsidiary of Institutional
Administration Services, Inc., a provider of mutual fund administration
services, the parent company of which is Boston Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees to represent the fair
value of the Fund's investments.
(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 is recognized on the accrual basis. Cost of investments represents
amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the 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, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue 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 $2,468 available for
Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to February 28, 1994. The
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
carryover does not include net realized securities losses from November 1,
1993 through February 28, 1994, which are treated, for Federal income tax
purposes, as arising in fiscal 1995. If not applied, $199 of the carryover
expires in fiscal 2001 and $2,269 of the carryover expires in fiscal 2002.
At August 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement of
expenses in any full fiscal year that such expenses (excluding certain
expenses as described above) exceed 2 1/2% of the first $30 million, 2% of
the next $70 million and 1 1/2% of the excess over $100 million of the
average value of the Fund's net assets in accordance with California "blue
sky" regulations. However, the Manager had undertaken from March 1, 1994
through October 4, 1994 to waive receipt of the management fee payable to it
by the Fund and thereafter, had undertaken through October 17, 1994, to
reduce the management fee paid by the Fund, to the extent that the Funds
aggregate expenses (excluding certain expenses as described above) exceeded
specified annual percentages of the Fund's average daily net assets. The
Manager has currently undertaken from October 18, 1994 through December 31,
1994, or until such time as the net assets of the Fund exceed $500 million,
regardless of whether they remain at that level, to waive receipt of the
management fee payable to it by the Fund in excess of an annual rate of .10
of 1% of the Funds average daily net assets. The management fee waived,
pursuant to the undertaking, amounted to $623,580 for the six months ended
August 31, 1994.
In addition, the Manager has undertaken through June 30, 1996 to reduce
the management fee paid by the Fund, to the extent that the Fund's aggregate
annual expenses (excluding certain expenses as described above) exceed an
annual rate of .45 of 1% of the average daily value of the Fund's net assets.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the six months
ended August 31, 1994, the Fund was charged an aggregate of $67,010 pursuant
to the Shareholder Services Plan.
(C) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives an annual fee of $1,500 and an attendance fee of $250 per meeting.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus BASIC U.S. Government Money Market Fund, including the statement of
investments, as of August 31, 1994, and the related statements of operations
and changes in net assets and financial highlights for the six month period
ended August 31, 1994. These financial statements and financial highlights
are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
February 28, 1994 and financial highlights for each of the two years in the
period ended February 28, 1994 and in our report dated April 5, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
Ernst & Young LLP
New York, New York
September 28, 1994
(Dreyfus Logo)
BASIC
U.S. Government
Money Market Fund
Semi-Annual
Report
August 31, 1994
(Dreyfus Lion "D" Logo)
DREYFUS BASIC U.S. GOVERNMENT
MONEY MARKET FUND
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 124SA948
