Dreyfus BASIC U.S. Government Money Market Fund
Letter to Shareholders
Dear Shareholder:
The Dreyfus BASIC U.S. Government Money Market Fund was ranked the number
one fund among 100 funds listed in the U.S. Government and Agency Category as
reported by IBC/Donoghue's Money Fund Report Registration Mark for each
seven-day period, with the exception of one in the Fund's reporting period of
February 28, 1995 through August 31, 1995. Currently, the Fund's seven-day
yield of 5.77% ranks number one out of 102 government money funds as of
September 19, 1995, also according to IBC/Donoghue's. Remember, yield
fluctuates and past performance is no guarantee of future results.
For the six months ended August 31, 1995 your Dreyfus BASIC U.S.
Government Money Market Fund produced an annualized yield of 6.02%. This was
the equivalent of an annualized effective yield of 6.19% after the effect of
compounding.*
In managing your assets during this reporting period, we lengthened the
maturity of your Fund gradually. This was done in anticipation of lower
interest rates, which in fact came to pass over the course of the last six
months as the economy gave continued signs of slowing down.
For example, the rate on the three-month U.S. Treasury bill was 5.41% on
August 31, 1995 compared to 5.80% six months earlier on February 28, 1995.
The Federal Reserve Board, which raised interest rates seven times during
1994 and early 1995 to head off inflation, became concerned that the drop in
economic performance might turn into an actual business recession.
Accordingly, in early July the Fed reversed course and made a modest cut in
the Federal Funds rate from 6.00% to 5.75%.
As of this date, the economy appears to have cooled off as compared to
the activity that prevailed last year. The future course of interest rates
will depend on the pattern of economic growth and inflation as well as the
reception accorded to budget tightening proposals in Congress.
We are closely watching these developments so that we can make any
portfolio changes that the situation may require.
We thank you for investing with Dreyfus, and look forward to continuing
to serve your investment needs.
Sincerely,
[Patricia A. Larkin Signature Logo]
Patricia A. Larkin
Portfolio Manager
September 20, 1995
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly. A portion of the management fee was waived during these
seven-day periods pursuant to undertakings by The Dreyfus Corporation,
without which rankings would have been lower and the Fund's seven-day yield
as of September 19, 1995 would have been 5.60%.
Mutual fund shares are not insured by the FDIC or the U.S. Government, and
there can be no assurance that the Fund will be able to maintain a stable net
asset value of $1.00.
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<CAPTION>
DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS-6.4% PURCHASE AMOUNT VALUE
-------- --------- --------
<S> <C> <C> <C>
11/16/95................................ 6.84% $20,000,000 $19,729,356
8/22/96...................................... 5.83 65,000,000 61,462,745
============
TOTAL U.S. TREASURY BILLS (cost $81,192,101).. $81,192,101
U.S. GOVERNMENT AGENCIES-92.2%
Federal Farm Credit Banks, Discount Notes
11/28/95...................................... 6.34% $6,130,000 $6,039,044
Federal Farm Credit Banks, Floating Rate Notes
3/7/96 ...................................... 6.00 (a) 60,000,000 59,977,761
9/16/96....................................... 5.81 (a) 10,000,000 10,008,608
9/30/96...................................... 6.05 (a) 5,000,000 5,000,000
5/23/97.......................................... 5.89 (a) 24,000,000 24,136,161
6/13/97......................................... 5.89 (a) 19,500,000 19,477,364
8/14/97....................................... 5.85 (a) 75,000,000 74,977,140
6/8/98 .................................................... 6.00 (a) 50,000,000 50,000,000
Federal Home Loan Banks, Discount Notes
9/1/95..................................................... 5.70 50,000,000 50,000,000
10/23/95................................................... 6.28 20,000,000 19,824,933
11/24/95................................................... 7.09 15,000,000 14,768,300
1/2/96..................................................... 6.42 19,870,000 19,454,518
1/4/96..................................................... 6.41 25,000,000 24,469,618
1/10/96.................................................... 6.32 10,000,000 9,780,575
1/16/96.................................................... 6.23 36,850,000 36,013,955
1/19/96.................................................... 6.43 8,135,000 7,941,614
1/25/96.................................................... 6.73 4,000,000 3,897,313
2/16/96.................................................... 6.49 11,660,000 11,325,902
Federal Home Loan Banks, Floating Rate Notes
7/17/96.................................................... 5.78 (a) 20,000,000 20,000,000
7/18/96.................................................... 5.87 (a) 5,000,000 5,000,000
12/19/96................................................... 6.25 (a) 16,000,000 16,000,000
1/31/97.................................................... 6.17 (a) 23,000,000 23,042,531
Federal Home Loan Mortgage Corp., Discount Notes
12/29/95................................................... 6.08 17,860,000 17,514,697
1/19/96.................................................... 6.45 1,000,000 976,161
4/23/96.................................................... 6.28 16,000,000 15,382,733
Federal Home Loan Mortgage Corp., Floating Rate Notes
6/30/98.................................................... 6.28 (a) 10,000,000 9,953,755
Federal National Mortgage Association, Discount Notes
11/3/95.................................................... 6.29 25,000,000 24,735,400
2/29/96.................................................... 6.52 10,000,000 9,690,792
4/15/96.................................................... 6.31 45,000,000 43,314,525
Federal National Mortgage Association, Floating Rate Notes
1/26/96.................................................... 6.02 (a) 17,000,000 17,004,516
Dreyfus BASIC U.S. Government Money Market Fund
Statement of Investments (continued) August 31, 1995 (Unaudited)
Annualized
Yield on
Date of Principal
U.S. Government Agencies (continued) Purchase Amount Value
-------- -------- -------
Federal National Mortgage Association, Floating Rate Notes (continued):
6/3/96 .................................................... 5.92%(a) $25,000,000 $24,991,834
10/7/96.................................................... 5.96 (a) 18,000,000 18,057,120
2/14/97.................................................... 6.42 (a) 10,000,000 10,000,000
2/18/97.................................................... 6.23 (a) 31,000,000 31,021,402
4/4/97 .................................................... 5.51 (a) 50,000,000 49,962,752
6/20/97.................................................... 5.96 (a) 100,000,000 99,983,194
6/19/98.................................................... 5.95 (a) 100,000,000 99,948,714
6/29/98.................................................... 5.97 (a) 100,000,000 99,948,824
Student Loan Marketing Association, Floating Rate Notes
3/20/96.................................................... 5.69 (a) 1,000,000 1,000,248
11/1/96.................................................... 5.58 (a) 14,600,000 14,632,007
12/20/96................................................... 5.63 (a) 25,000,000 25,000,000
1/23/97.................................................... 5.58 (a) 23,905,000 23,967,358
1/27/98.................................................... 6.33 (a) 20,000,000 19,830,797
----------
TOTAL U.S. GOVERNMENT AGENCIES (cost $1,168,052,166)........... $1,168,052,166
==============
REPURCHASE AGREEMENTS-.4%
SBC Capital Markets
dated 8/31/95, due 9/1/95 in the amount of $5,149,837
(fully collateralized by $ 5,525,000 U.S. Treasury
Bills due 7/25/96, value $5,254,866)
(cost $5,149,000)......................... 5.85 % $5,149,000 $5,149,000
===========
TOTAL INVESTMENTS (cost $1,254,393,267).......... 99.0% $1,254,393,267
======= ===========
CASH AND RECEIVABLES (NET)................... 1.0% $ 12,407,676
======= ===========
NET ASSETS ...................................... 100.0% $1,266,800,943
======= ===========
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate-subject to periodic change.
See independent accountants' review report and notes to financial statements.
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DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a,b)......................... $1,254,393,267
Cash.................................................................... 3,469,655
Interest receivable..................................................... 9,070,481
Prepaid expenses........................................................ 240,343
-------------
1,267,173,746
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $115,304
Accrued expenses and other liabilities.................................. 257,499 372,803
---------- ------------
NET ASSETS.................................................................. $1,266,800,943
===============
REPRESENTED BY:
Paid-in capital......................................................... $1,266,874,465
Accumulated net realized (loss) on investments.......................... (73,522)
----------
NET ASSETS at value applicable to 1,266,874,465 outstanding shares of
Beneficial Interest, equivalent to $1.00 per share (unlimited number of
$.001 par value shares authorized)...................................... $1,266,800,943
================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
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DREYFUS BASIC U.S. GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $37,784,749
EXPENSES:
Management fee-Note 2(a).............................................. $2,989,466
Shareholder servicing costs-Note 2(b)................................. 705,957
Registration fees..................................................... 213,660
Custodian fees........................................................ 48,061
Prospectus and shareholders' reports.................................. 32,286
Professional fees..................................................... 25,746
Trustees' fees and expenses-Note 2(c)................................. 11,294
Miscellaneous......................................................... 10,821
--------
4,037,291
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 2,371,912
------
TOTAL EXPENSES.................................................. 1,665,379
---------
INVESTMENT INCOME-NET....................................................... 36,119,370
NET REALIZED GAIN ON INVESTMENTS-Note 1(b).................................. 27,119
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $36,146,489
============
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, 1995
1995 (UNAUDITED)
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 20,545,262 $36,119,370
Net realized gain (loss) on investments........................... (96,907) 27,119
------------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 20,448,355 36,146,489
------------- -----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................. (20,545,262) (36,119,370)
------------- -----------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold..................................... 1,427,941,614 937,340,372
Dividends reinvested.............................................. 18,991,741 33,709,536
Cost of shares redeemed........................................... (670,805,165) (745,998,139)
------------- ------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS.... 776,128,190 225,051,769
------------- ------------
TOTAL INCREASE IN NET ASSETS................................ 776,031,283 225,078,888
NET ASSETS:
Beginning of period............................................... 265,690,772 1,041,722,055
------------- -------------
End of period..................................................... $1,041,722,055 $1,266,800,943
=============== ===============
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, 1995
PER SHARE DATA: 1993(1) 1994 1995 (UNAUDITED)
------- ------ ------ --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................... $1.0000 $1.0002 $1.0000 $.9999
------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................................... .0315 .0324 .0457 .0303
Net realized gain (loss) on investments................. -- (.0001) (.0001) --
------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS...................... .0315 .0323 .0456 .0303
------- ------- ------- -------
DISTRIBUTIONS;
Dividends from investment income-net.................... (.0313) (.0325) (.0457) (.0303)
------- ------- ------- -------
Net asset value, end of period.......................... $1.0002 $1.0000 $.9999 $ .9999
====== ======= ======== ========
TOTAL INVESTMENT RETURN.................................... 3.69%(2) 3.30% 4.67% 6.09%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. -- .02% .17% .28%(2)
Ratio of net investment income to average net assets.... 3.58%(2) 3.24% 5.05% 6.02%(2)
Decrease reflected in above expense ratios due to
undertakings by the Manager........................... .75%(2) .64% .44% .40%(2)
Net Assets, end of period (000's Omitted)........... $116,696 $265,691 $1,041,722 $1,266,801
(1) From April 24, 1992 (commencement of operations) to February 28, 1993.
(2) Annualized.
See independent accountants' review report and notes to financial statements.
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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. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
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.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. 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
Dreyfus BASIC U.S. Government Money Market Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 August 31, 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 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 21\2% of the first $30 million, 2% of the
next $70 million and 11\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, 1995 through
July 4, 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 and thereafter, had undertaken through October 8, 1995, 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 9, 1995 through December 31, 1995 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 .30 of 1% of the average daily value of the Fund's net assets.
The reduction in management fee pursuant to the undertakings, amounted to
$2,371,912 for the six months ended August 31, 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 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, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets, for certain allocated expenses of providing
personal services and/or maintaining shareholder accounts. The services
provided may include personal services relating to shareholder accounts, such
as answering shareholder inquiries regarding the Fund and providing reports
and other information, and services related to the maintenance of shareholder
accounts. During the six months ended August 31, 1995, the Fund was charged
an aggregate of $528,826 pursuant to the Shareholder Services Plan.
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund 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
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, Inc., including the
statement of investments, as of August 31, 1995, and the related statements
of operations and changes in net assets and financial highlights for the six
month period ended August 31, 1995. 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, 1995 and financial highlights for each of the three years in the
period ended February 28, 1995 and in our report dated April 3, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst & Young LLP Signature Logo]
New York, New York
October 2, 1995
[Dreyfus Lion "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. 124SA958
[Dreyfus logo]
BASIC
U.S. Government
Money Market Fund
Semi-Annual
Report
August 31, 1995
