LETTER TO SHAREHOLDERS
Dear Shareholder:
The latest fiscal year of the Dreyfus BASIC U.S. Government Money Market
Fund, which ended February 28, 1995, was notable for its overall pattern of
interest rate increases. The primary influence that brought this about was,
of course, the Federal Reserve Board's campaign to head off inflation. Seven
increases in short-term rates were mandated by the central bank during the 12
months under review. Federal Reserve policies, however, were not the only
forces at work. Steady expansion of economic activity in the U.S., plus
revival of economies in major nations abroad, were also contributing factors.
Recently, Federal Reserve Board Chairman Alan Greenspan issued hints that
the Federal Reserve might be nearing the end of its prolonged cycle of
boosting interest rates. However, at just about the same time, the long-term
decline of the dollar on foreign exchange markets picked up speed. By early
March, the U.S. dollar had hit historic lows in trading value against the yen
and the German mark. Several developments helped to bring this about: the
high cost to the U.S. of helping Mexico to deal with its financial crisis,
the failure of Congress to pass a balanced budget amendment, and the
resulting uncertainty in Washington about plans to reduce the U.S. budget
deficit.
The dollar's weakness raised questions whether the Fed might need to help
the beleaguered "greenback" by raising interest rates again. In deciding what
course to pursue, the Federal Reserve would most certainly analyze very
carefully the outlook for the American economy. During the first quarter of
1995, signs of economic growth continued, but at a somewhat slower pace than
in the fourth quarter of 1994. Offsetting the more restrained production
statistics, however, were figures showing strong gains in creation of new
jobs, and continued decline in unemployment.
On the price front, while consumer prices still showed low inflation,
price pressures were appearing at the intermediate manufacturing level.
These factors all contributed to the performance of your Fund for the
latest fiscal year. For the period March 1, 1994, through February 28, 1995,
the Dreyfus BASIC U.S. Government Money Market Fund provided a yield of
4.57%, with an effective yield of 4.67% after compounding.* The Fund has
continually ranked among the highest performing funds in its category as
ranked by IBC/Donoghue's Money Fund Report.**
We appreciate the opportunity to serve your investment needs and wish to
thank you for your confidence in Dreyfus.
Sincerely,
(Patricia A. Larkin Signature Logo)
Patricia A. Larkin
Portfolio Manager
March 15, 1995
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested
monthly.
** Source: IBC/Donoghue's Money Fund Report, for each of the 7-day
periods covering the 12 months ended February 28, 1995
(U.S. Government and Agencies Category). The Fund's 7-day yield as of
February 28, 1995 ranked #1 out of 97 Funds in the Category. During these
periods, certain expenses were absorbed. The absorption may be terminated
or modified, without which the Fund's yield and rankings would have been
lower. Yield fluctuates and past performance is no guarantee of future
results.
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<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS FEBRUARY 28, 1995
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS--4.2% PURCHASE AMOUNT VALUE
------------ -------------- -------------
<S> <C> <C> <C>
8/10/95..................................................... 6.40% $ 25,000,000 $ 24,302,500
11/16/95.................................................... 6.84 20,000,000 19,074,111
-------------
TOTAL U.S. TREASURY BILLS (cost $43,376,611) ................... $ 43,376,611
=============
U.S. GOVERNMENT AGENCIES-95.0%
Federal Farm Credit Banks, Discount Notes
3/6/95...................................................... 5.09% $ 10,000,000 $ 9,993,111
5/9/95...................................................... 6.01 11,065,000 10,941,146
6/12/95..................................................... 6.24 315,000 309,511
6/19/95..................................................... 6.53 1,000,000 980,597
8/7/95...................................................... 6.38 14,700,000 14,298,764
Federal Farm Credit Banks, Floating Rate Notes
5/26/95..................................................... 6.30(a) 10,000,000 10,000,000
9/30/96..................................................... 6.30(a) 5,000,000 5,000,000
Federal Home Loan Banks, Discount Notes
3/1/95...................................................... 5.95 191,880,000 191,880,000
3/7/95...................................................... 5.98 10,000,000 9,990,133
3/20/95..................................................... 5.19 25,000,000 24,933,368
5/3/95...................................................... 6.39 10,000,000 9,890,450
5/4/95...................................................... 6.40 15,000,000 14,832,800
5/15/95..................................................... 6.41 210,000 207,261
5/22/95..................................................... 6.02 21,440,000 21,150,405
6/19/95..................................................... 6.34 49,265,000 48,334,555
11/24/95.................................................... 7.09 15,000,000 14,260,767
1/25/96..................................................... 6.73 4,000,000 3,767,900
Federal Home Loan Banks, Floating Rate Notes
12/19/96.................................................... 6.50(a) 16,000,000 16,000,000
1/31/97..................................................... 6.42(a) 23,000,000 23,057,639
Federal Home Loan Mortgage Corp., Discount Notes
4/4/95...................................................... 6.25 40,000,000 39,768,611
5/3/95...................................................... 6.22 12,146,000 12,015,916
5/19/95..................................................... 6.04 3,000,000 2,960,829
8/2/95...................................................... 6.37 9,000,000 8,762,455
Federal Home Loan Mortgage Corp., Floating Rate Notes
6/30/98..................................................... 6.53(a) 10,000,000 9,945,518
Federal National Mortgage Association, Discount Notes
5/3/95...................................................... 6.18 18,000,000 17,808,165
5/8/95...................................................... 6.06 10,615,000 10,495,298
5/17/95..................................................... 6.38 18,550,000 18,302,653
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) FEBRUARY 28, 1995 ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. GOVERNMENT AGENCIES (CONTINUED) PURCHASE AMOUNT VALUE
------------ -------------- -------------
Federal National Mortgage Association, Discount Notes (continued):
5/19/95..................................................... 6.41% $ 325,000 $ 320,536
5/31/95..................................................... 6.43 45,000,000 44,286,788
6/12/95..................................................... 6.47 42,990,000 42,215,437
6/15/95..................................................... 6.15 12,100,000 11,885,165
6/16/95..................................................... 6.36 54,700,000 53,692,943
6/19/95..................................................... 6.56 35,000,000 34,318,916
6/20/95..................................................... 6.44 17,000,000 16,671,348
6/22/95..................................................... 6.46 8,000,000 7,842,051
6/23/95..................................................... 6.42 10,000,000 9,802,083
7/11/95..................................................... 6.31 8,955,000 8,753,393
7/17/95..................................................... 6.27 29,300,000 28,614,926
7/26/95..................................................... 6.50 15,000,000 14,614,125
8/8/95...................................................... 6.38 15,000,000 14,588,000
8/31/95..................................................... 6.30 31,790,000 30,804,245
Federal National Mortgage Association, Floating Rate Notes
1/26/96..................................................... 6.26(a) 17,000,000 17,010,169
2/14/97..................................................... 6.67(a) 10,000,000 10,000,000
2/18/97..................................................... 6.48(a) 31,000,000 31,028,749
Student Loan Marketing Association, Floating Rate Notes
3/20/95..................................................... 6.03(a) 2,200,000 2,200,389
8/7/95...................................................... 6.07(a) 2,200,000 2,200,414
3/20/96..................................................... 6.09(a) 1,000,000 1,000,475
12/20/96.................................................... 6.04(a) 25,000,000 25,000,000
1/23/97..................................................... 5.98(a) 13,905,000 13,954,407
1/27/98..................................................... 6.58(a) 20,000,000 19,795,377
-------------
TOTAL U.S. GOVERNMENT AGENCIES (cost $990,487,788).............. $ 990,487,788
=============
TOTAL INVESTMENTS (cost $1,033,864,399).............. 99.2% $1,033,864,399
====== ==============
CASH AND RECEIVABLES (NET)........................... .8% $ 7,857,656
====== ==============
NET ASSETS........................................... 100.0% $1,041,722,055
====== ==============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate-subject to periodic change.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value_Note 1(a)........................... $1,033,864,399
Cash.................................................................... 7,654,865
Interest receivable..................................................... 1,098,167
Prepaid expenses........................................................ 327,400
----------------
1,042,944,831
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 75,036
Payable for shares of Beneficial Interest redeemed...................... 865,379
Accrued expenses and other liabilities.................................. 282,361 1,222,776
---------- ----------------
NET ASSETS ................................................................ $1,041,722,055
==============
REPRESENTED BY:
Paid-in capital......................................................... $1,041,822,696
Accumulated net realized (loss) on investments.......................... (100,641)
----------------
NET ASSETS at value applicable to 1,041,822,696 shares outstanding
(unlimited number of $.001 par value shares of Beneficial Interest authorized) $1,041,722,055
==============
NET ASSET VALUE, offering and redemption price per share
($1,041,722,055 / 1,041,822,696 shares)................................. $1.00
=====
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $21,228,240
EXPENSES:
Management fee_Note 2(a).............................................. $2,035,026
Shareholder servicing costs_Note 2(b)................................. 179,900
Registration fees..................................................... 129,497
Custodian fees........................................................ 50,860
Professional fees..................................................... 29,926
Trustees' fees and expenses_Note 2(c)................................. 18,245
Prospectus and shareholders' reports.................................. 9,200
Miscellaneous......................................................... 19,714
------------
2,472,368
Less_reduction in management fee due to
undertakings_Note 2(a)............................................ 1,789,390
------------
TOTAL EXPENSES.................................................. 682,978
-------------
INVESTMENT INCOME--NET...................................................... 20,545,262
NET REALIZED (LOSS) ON INVESTMENTS--Note 1(b)............................... (96,907)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $20,448,355
=============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED FEBRUARY 28,
-----------------------------------
1994 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 6,646,915 $ 20,545,262
Net realized (loss) on investments...................................... (3,118) (96,907)
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 6,643,797 20,448,355
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income_net................................................... (6,667,922) (20,545,262)
---------------- ----------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................... 443,808,311 1,427,941,614
Dividends reinvested.................................................... 6,396,795 18,991,741
Cost of shares redeemed................................................. (301,186,102) (670,805,165)
---------------- ----------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.......... 149,019,004 776,128,190
---------------- ----------------
TOTAL INCREASE IN NET ASSETS...................................... 148,994,879 776,031,283
NET ASSETS:
Beginning of year....................................................... 116,695,893 265,690,772
---------------- ----------------
End of year............................................................. $ 265,690,772 $1,041,722,055
================ ================
See 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 year indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED FEBRUARY 28,
-----------------------------------
PER SHARE DATA: 1993(1) 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of year.................................... $1.0000 $1.0002 $1.0000
-------- -------- --------
INVESTMENT OPERATIONS:
Investment income--net................................................ .0315 .0324 .0457
Net realized (loss) on investments.................................... -- (.0001) (.0001)
-------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS.................................... .0315 .0323 .0456
-------- -------- --------
DISTRIBUTIONS;
Dividends from investment income--net................................. (.0313) (.0325) (.0457)
-------- -------- --------
Net asset value, end of year.......................................... $1.0002 $1.0000 $ .9999
======== ======== ========
TOTAL INVESTMENT RETURN 3.69%(2) 3.30% 4.67%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................... -- .02% .17%
Ratio of net investment income to average net assets.................. 3.58%(2) 3.24% 5.05%
Decrease reflected in above expense ratios due to
undertakings by the Manager......................................... .75%(2) .64% .44%
Net Assets, end of year (000's Omitted)............................... $116,696 $265,691 $1,041,722
- --------------------------
(1) From April 24, 1992 (commencement of operations) to February 28, 1993.
(2) Annualized.
See notes to financial statements.
</TABLE>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
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. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
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. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(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.
(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 approximately $58,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to February 28, 1995. The
carryover does not include net realized securities losses from November 1,
1994 through February 28, 1995, which are treated, for Federal income tax
purposes, as arising in fiscal 1996. If not applied, $199 of the carryover
expires in fiscal 2001, $2,269 of the carryover expires in fiscal 2002 and
$55,532 of the carryover expires in fiscal 2003.
At February 28, 1995, 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
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 Fund's 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 March 31, 1995, 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 Fund's average daily net assets. The
reduction in management fee, pursuant to the undertakings, amounted to
$1,789,390 for the year ended February 28, 1995.
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 undertakings 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 year ended
February 28, 1995, the Fund was charged an aggregate of $174,959 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.
The Chairman of the Board receives an additional 25% of such compensation.
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus BASIC U.S. Government Money Market Fund, including the statement of
investments, as of February 28, 1995, and the related statement of operations
for the year then ended, the statements 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. Our procedures included confirmation of
securities owned as of February 28, 1995 by correspondence with the custodian.
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 U.S. Government Money Market Fund at February 28,
1995, 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 signature logo)
New York, New York
April 3, 1995
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
For State individual income tax purposes, the Fund hereby designates
45.72% of the ordinary income dividends paid during its fiscal year ended
February 28, 1995 as attributable to interest income from direct obligations
of the United States. Such dividends are currently exempt from taxation for
individual income tax purposes in most states, including New York, California
and the District of Columbia.
(Dreyfus `D' logo)
DREYFUS BASIC U.S. GOVERNMENT
MONEY MARKET FUND
200 Park Avenue
New York, NY 10166
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. 124AR952
(Dreyfus logo)
BASIC
U.S. Government
Money Market Fund
Annual Report
February 28, 1995
(Dreyfus lion logo)
