LETTER TO SHAREHOLDERS
Dear Shareholder:
At the end of the fiscal year on July 31, 1994, the Fund's Class A shares
had a net asset value of $11.56. Since the Fund's inception on August 19,
1993, income dividends of approximately $.62 per share were paid. This
translated into an annualized distribution rate per share of 5.42%, based on
the closing maximum offering price per share.
The Fund's Class B shares had a net asset value of $11.57 on July 31,
1994. Since inception, income dividends of approximately $.56 per share were
paid. This produced an annualized distribution rate per share of 5.13%, based
on the closing net asset value per share.
We are pleased to report that all dividends paid from net investment
income during the period are exempt from Federal and State of California
personal income taxes.*
The municipal market was turbulent this past fiscal year. After a
relatively slow start, price performance in the municipal arena was bolstered
by record low interest rates. During this period, the supply of new issues
within the State appeared to be heavy at times, but it did not stifle the
downward movement of interest rates. Demand also played a key role in
absorbing an ample supply of new issues for two reasons: investors braced for
anticipated income tax increases and municipals provided advantageous returns
compared to taxable alternatives. Indications of economic strength appeared
toward year end. This caused bond prices to weaken as fears of higher
inflation took hold. This trend remained in place as we entered 1994. As a
counter-measure to signs of economic strength, the Federal Reserve Board
responded with a series of moves to tighten short-term interest rates. This
was done in an effort to keep pace with perceived inflationary pressures. As
1994 progresses, we continue to operate in a narrow trading range. We expect
this to continue through the balance of this year.
In July, the State of California was downgraded by the rating agencies.
The agencies cited three years of financial problems, lower financial
projections for this year, increasing pressure on next year's budget to
eliminate the deficit and a growing reliance on external borrowing for
operating purposes. The California economy is expected to produce only slow
to negative growth this year. The State continues to struggle as it adjusts
to defense cutbacks, the loss of some 600,000 jobs and the lingering deflation
in its real estate market. We are hopeful that improvements in the national
economy will provide a catalyst to spur California's recovery.
We believe the municipal bond market continues to be a favorable
investment vehicle, given the improvement in the U.S. economy and the tax
reasons mentioned above. We continue to transact our daily Fund business with
an eye toward identifying investment opportunities that will help achieve
your investment goals. We will prudently react to both National and State
economic developments, as well as market changes that could affect your
Fund's portfolio.
We have included a current Statement of Investments and recent financial
statements for your review. We greatly appreciate your investment in the Fund
and look forward to serving your investment needs in the future.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
August 25, 1994
New York, N.Y.
* Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
PERFORMANCE
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER INSURED
MUNICIPAL BOND FUND, CALIFORNIA SERIES CLASS A SHARES AND THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
[Exhibit A]
*Source: Lehman Brothers
ACTUAL AGGREGATE TOTAL RETURN
CLASS A CLASS B
- --------------------------------------------------------- ----------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
SALES CHARGE SALES CHARGE (4.5%) REDEMPTION REDEMPTION*
------------------- ------------------ ----------- ------------------
<S> <C> <C> <S> <C> <C>
From Inception (8/19/93) From Inception (8/19/93)
to July 31, 1994 (2.65%) (7.04%) to July 31, 1994 (3.04%) (5.82%)
</TABLE>
Past performance is not predictive of future performance. Share price and
investment return fluctuate and share price may be more or less than original
cost upon redemption.
The above graph compares a $10,000 investment made in Class A shares of
Premier Insured Municipal Bond Fund, California Series on 8/19/93 (Inception
Date) to a $10,000 investment made in the Lehman Brothers Municipal Bond
Index on that date. For comparative purposes, the value of the Index on
8/31/93 is used as the beginning value on 8/19/93. All dividends and capital
gain distributions are reinvested. Performance for Class B shares will
differ from the results shown above due to difference in charges and expenses
charged to that class.
The Series invests primarily in California municipal securities, which are
insured as to the timely payment of interest and principal. The performance
shown in the graph takes into account the maximum initial sales charge on
Class A shares and all other applicable fees and expenses. Unlike the
Series, the Lehman Brothers Municipal Bond Index is an unmanaged total return
performance benchmark for the long-term, investment grade tax exempt bond
market, calculated by using municipal bonds selected to be representative of
the market. The Index does not take into account charges, fees and other
expenses, nor is it composed of only insured securities. Further information
relating to Series performance, including expense reimbursements, if
applicable, is contained in the Condensed Financial Information section of
the Prospectus and elsewhere in this report. Neither Fund shares nor the
market value of its portfolio securities are insured.
* Maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after six years.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF INVESTMENTS JULY 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--95.7% AMOUNT VALUE
------------ ------------
<S> <C> <C>
Anaheim Public Financing Authority, Electric Utility Revenue (San Juan 4)
5.75%, 10/1/2022 (Insured; FGIC) ....................................... $ 100,000 $ 94,539
California Health Facilities Financing Authority, Revenue
(Children's Hospital San Diego) 6.50%, 7/1/2020 (Insured; MBIA)......... 200,000 204,828
California Public Works Board, Department of Corrections, LR
(State Prison - Coalinga) 5.375%, 12/1/2019 (Insured; MBIA)............. 100,000 89,986
California Resource and Efficiency Financing Authority, Revenue
(First Resource Efficiency Program) 6%, 7/1/2017 (Insured; AMBAC)....... 200,000 199,002
California Statewide Communities Development Authority, COP, Revenue
(Sutter Health Obligated Group) 5.50%, 8/15/2013 (Insured; MBIA)........ 200,000 187,440
Calleguas - Las Virgines Public Financing Authority, Installment Purpose
Revenue
5.125%, 7/1/2021 (Insured; FGIC)........................................ 100,000 85,543
Campbell Unified School District, Series A 6.25%, 8/1/2019 (Insured; MBIA).. 500,000 499,490
Central Coast Water Authority, Revenue (State Water Project-Regional
Facilities)
6.60%, 10/1/2022 (Insured; AMBAC)....................................... 200,000 207,628
Central Union High School District, Imperial County
5.50%, 8/1/2017 (Insured; AMBAC)........................................ 195,000 179,954
East Bay Municipal Utility District, Wastewater Treatment Systems Revenue
7.37%, 6/1/2020 (Insured; AMBAC) (a).................................... 100,000 82,750
Eastern Municipal Water District, Water and Sewer Revenue, COP
5.25%, 7/1/2023 (Insured; FGIC)......................................... 100,000 87,292
Garden Grove Public Financing Authority, Revenue
(Water Services Capital Improvement Program) 5.50%, 12/15/2023 (Insured; FGIC) 100,000 90,455
Glendale Redevelopment Agency, Tax Allocation Revenue, Refunding
(Central Glendale Redevelopment Project) 5.50%, 12/1/2014 (Insured; AMBAC) 205,000 190,195
Los Angeles Community Redevelopment Agency, Tax Allocation
(Bunker Hill Project) 5.625%, 12/1/2023 (Insured; FSA).................. 100,000 92,770
Los Angeles Convention and Exhibition Center Authority, LR, Refunding
5.125%, 8/15/2013 (Insured; MBIA)....................................... 100,000 88,588
Los Angeles Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding
5%, 7/1/2021 (Insured; FGIC)............................................ 200,000 168,074
M-S-R Public Power Agency, Revenue (San Juan Project) 6%, 7/1/2020 (Insured; AMBAC) 200,000 197,912
Monrovia Redevelopment Agency, Public Parking Facilities Revenue, Refunding
5.20%, 4/1/2013 (Insured; AMBAC)........................................ 100,000 89,938
Moulton - Niguel Water District, Refunding (Consolidated Improvement
District)
5.25%, 9/1/2013 (Insured; MBIA)......................................... 100,000 90,068
Northern California, Transmission Revenue, Refunding (Ore Transmission)
5.25%, 5/1/2020 (Insured; MBIA)......................................... 100,000 87,846
Oxnard Financing Authority, Wastewater Revenue, Refunding
5.25%, 6/1/2020 (Insured; FGIC)......................................... 200,000 175,664
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
Port Oakland, Port Revenue, Series E 6.50%, 11/1/2016 (Insured; MBIA)....... $ 200,000 $ 205,624
Poway Redevelopment Agency, Tax Allocation, Refunding
(Paguay Redevelopment Project) 5.50%, 12/15/2023 (Insured; FGIC)........ 100,000 90,955
Sacramento Municipal Utility District, Electric Revenue, Refunding
5.25%, 11/15/2020 (Insured; MBIA)....................................... 200,000 175,488
San Diego, Sewer Revenue 5%, 5/15/2013 (Insured; AMBAC)..................... 100,000 87,382
San Francisco City and Community Airports, International Commission Airport
Revenue
6.25%, 5/1/2012 (Insured; FGIC)......................................... 150,000 152,859
San Jose Redevelopment Agency, Tax Allocation, Refunding
(Merged Area Redevelopment Project) 5.25%, 8/1/2016 (Insured; MBIA)..... 200,000 178,448
Santa Ana Community Redevelopment Agency, Tax Allocation, Refunding
(South Main Street Redevelopment) 5.25%, 9/1/2013 (Insured; MBIA)....... 100,000 90,068
Southern Public Power Authority, Transmission Project Revenue, Refunding
5%, 7/1/2022 (Insured; MBIA)............................................ 100,000 83,811
University of California, Revenue, Refunding (Housing Systems)
5.25%, 11/1/2012 (Insured; MBIA)........................................ 200,000 181,620
------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $4,720,498)..................... $4,436,217
============
SHORT-TERM MUNICIPAL INVESTMENTS--4.3%
U.S. RELATED;
Puerto Rico Electric Power Authority, Revenue, VRDN 2.99% (Insured; FSA) (b)
(cost $200,000)......................................................... $ 200,000 $ 200,000
============
TOTAL INVESTMENTS--100.0%
(cost $4,920,498)....................................................... $4,636,217
============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
COP Certificate of Participation LR Lease Revenue
FGIC Financial Guaranty Insurance Corporation MBIA Municipal Bond Insurance Association
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <S> <C>
AAA Aaa AAA 100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) At July 31, 1994, 29.9% of the Series' net assets are insured by
AMBAC and 52.4% are insured by MBIA.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $4,920,498)-see statement....................................... $4,636,217
Cash.................................................................... 120,262
Interest receivable..................................................... 58,056
Receivable for shares of Beneficial Interest subscribed................. 14,912
Prepaid expenses-Note 1(e).............................................. 44,161
Due from The Dreyfus Corporation........................................ 80,511
------------
4,954,119
LIABILITIES:
Payable for investment securities purchased............................. $696,840
Accrued expenses........................................................ 126,829 823,669
---------- ------------
NET ASSETS ................................................................ $4,130,450
============
REPRESENTED BY:
Paid-in capital......................................................... $4,414,731
Accumulated net unrealized (depreciation) on investments-Note 3......... (284,281)
------------
NET ASSETS at value......................................................... $4,130,450
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 127,376
=========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 229,803
=========
NET ASSET VALUE per share:
Class A Shares
($1,472,507 / 127,376 shares)......................................... $11.56
=======
Class B Shares
($2,657,943 / 229,803 shares)......................................... $11.57
=======
STATEMENT OF OPERATIONS
FROM AUGUST 19, 1993 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1994
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 134,221
EXPENSES:
Management fee-Note 2(a).............................................. $ 13,958
Shareholder servicing costs--Note 2(c)................................ 17,668
Auditing fees......................................................... 16,000
Legal fees............................................................ 14,336
Organization expenses-Note 1(e)....................................... 11,040
Shareholders' reports................................................. 10,931
Trustees' fees and expenses-Note 2(d)................................. 8,949
Registration fees..................................................... 8,529
Distribution fees (Class B shares)-Note 2(b).......................... 7,552
Custodian fees........................................................ 574
Miscellaneous......................................................... 2,524
----------
112,061
Less--expense reimbursement from Manager due to
undertakings-Note 2(a)............................................ 104,509
----------
TOTAL EXPENSES.................................................. 7,552
------------
INVESTMENT INCOME--NET...................................................... 126,669
NET UNREALIZED (DEPRECIATION) ON INVESTMENTS................................ (284,281)
------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (157,612)
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF CHANGES IN NET ASSETS
FROM AUGUST 19, 1993 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1994
OPERATIONS:
<S> <C> <C>
Investment income--net.................................................................... $ 126,669
Net unrealized (depreciation) on investments for the period............................... (284,281)
------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.............................. (157,612)
------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net:
Class A shares.......................................................................... (54,412)
Class B shares.......................................................................... (72,257)
------------
TOTAL DIVIDENDS..................................................................... (126,669)
------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.......................................................................... 2,745,985
Class B shares.......................................................................... 4,456,351
Dividends reinvested:
Class A shares.......................................................................... 31,965
Class B shares.......................................................................... 49,861
Cost of shares redeemed:
Class A shares.......................................................................... (1,218,479)
Class B shares.......................................................................... (1,750,952)
------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS........................ 4,314,731
------------
TOTAL INCREASE IN NET ASSETS...................................................... 4,030,450
NET ASSETS:
Beginning of period....................................................................... 100,000
------------
End of period............................................................................. $ 4,130,450
============
SHARES
--------------------------
PERIOD ENDED JULY 31, 1994
--------------------------
CLASS A CLASS B
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................ 220,251 362,381
Shares issued for dividends reinvested..................................... 2,657 4,168
Shares redeemed............................................................ (99,532) (140,746)
------------ ------------
NET INCREASE IN SHARES OUTSTANDING................................... 123,376 225,803
============ ============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
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 the period from August 19, 1993
(commencement of operations) to July 31, 1994. This information has been
derived from the Series' financial statements.
PER SHARE DATA: CLASS A SHARES CLASS B SHARES
--------------- ---------------
<S> <C> <C>
Net asset value, beginning of period................................. $12.50 $12.50
------- -------
INVESTMENT OPERATIONS:
Investment income--net............................................... .62 .56
Net unrealized (loss) on investments................................. (.94) (.93)
------- -------
TOTAL FROM INVESTMENT OPERATIONS................................... (.32) (.37)
------- -------
DISTRIBUTIONS;
Dividends from investment income--net................................ (.62) (.56)
------- -------
Net asset value, end of period....................................... $11.56 $11.57
======= =======
TOTAL INVESTMENT RETURN (1) (2).......................................... (2.79%) (3.20%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets (2).......................... -- .50%
Ratio of net investment income to average net assets (2)............. 5.30% 4.78%
Decrease reflected in above expense ratios due to undertakings
by the Manager (limited to the expense limitation provision
of the management agreement) (2)................................... 2.50% 2.50%
Portfolio Turnover Rate.............................................. -- --
Net Assets, end of period (000's Omitted)............................ $1,473 $2,658
- -----------------------------
(1) Exclusive of sales load.
(2) Annualized.
See notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") was organized as a
Massachusetts business trust on March 12, 1992 and operates as a series
company currently offering six series including the California Series ("the
Series"). The Series had no operations until August 19, 1993 (commencement of
operations) other than matters relating to its organization and registration
as a non-diversified open-end management investment company under the
Investment Company Act of 1940 ("Act") and the Securities Act of 1933 and the
sale and issuance of 4,000 Class A shares and 4,000 Class B shares of
Beneficial Interest ("Initial Shares") to The Dreyfus Corporation
("Manager"). Dreyfus Service Corporation acted as the distributor of the
Fund's shares until August 24, 1994. Dreyfus Service Corporation is a
wholly-owned subsidiary of the 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.
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.
The Series offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Series' investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(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, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Series follows an investment policy of investing primarily in
municipal obligations of one state. Economic changes affecting the state and
certain of its public bodies and municipalities may affect the ability of
issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Series.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series 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 Series 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, if any, it is the policy of the Series not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series to qualify as a
regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to
relieve it from substantially all Federal income taxes.
(E) OTHER: Organization expenses paid by the Series are included in
prepaid expenses and are being amortized to operations from August 19, 1993,
the date operations commenced, over the period during which it is expected
that a benefit will be realized, not to exceed five years. At July 31, 1994,
the unamortized balance of such expenses amounted to $44,161. In the event
that any of the initial shares are redeemed during the amortization period,
the redemption proceeds will be reduced by any unamortized organization
expenses in the same proportion as the number of such shares being redeemed
bears to the number of such shares outstanding at the time of such
redemption.
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 .55 of 1% of the average
daily value of the Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. The most stringent
state expense limitation applicable to the Series presently requires
reimbursement of expenses in any full fiscal year that such expenses
(exclusive of distribution expenses and 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager has undertaken from August 19, 1993 through October 1, 1994 or until
such time as the net assets of the Series exceed $25 million, regardless of
whether they remain at that level, to reimburse all fees and expenses of the
Series (excluding 12b-1 distribution plan fee and certain expenses as
described above). The expense reimbursement, pursuant to the undertaking,
amounted to $104,509 for the period ended July 31, 1994.
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.
Dreyfus Service Corporation retained $4,272 during the period ended July
31, 1994 from commissions earned on sales of the Series' Class A shares.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
No amounts were retained by Dreyfus Service Corporation during the period
ended July 31, 1994 from contingent deferred sales charges imposed upon
redemptions of the Series' Class B shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, the Series pays Dreyfus Service
Corporation at an annual rate of .50 of 1% of the value of the Series' Class
B shares average daily net assets, for the costs and expenses in connection
with advertising, marketing and distributing the Series' Class B shares. Dreyf
us Service Corporation may make payments to one or more Service Agents (a
securities dealer, financial institution, or other industry professional)
based on the value of the Series' Class B shares owned by clients of the
Service Agent. During the period ended July 31, 1994, $7,552 was charged to
the Series pursuant to the Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Series pays Dreyfus Service
Corporation, at an annual rate of .25 of 1% of the value of the average daily
net assets of Class A and Class B shares for servicing shareholder accounts.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series and
providing reports and other information, and services related to the
maintenance of shareholder accounts. Dreyfus Service Corporation may make
payments to Service Agents in respect of these services. Dreyfus Service
Corporation determines the amounts to be paid to Service Agents. For the
period ended July 31, 1994, $2,569 and $3,776 were charged to the Class A and
Class B shares, respectively, pursuant to the Shareholder Services Plan.
(D) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or Dreyfus Service Corporation.
Each trustee who is not an "affiliated person" receives from the Fund an
annual fee of $1,000 and an attendance fee of $250 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
amounted to $11,920,498 and $7,000,000, respectively, for the period ended
July 31, 1994, and consisted entirely of long-term and short-term municipal
investments.
At July 31, 1994, accumulated net unrealized depreciation on investments
was $284,281 consisting of $17,641 gross unrealized appreciation and $301,922
gross unrealized depreciation.
At July 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).
PREMIER INSURED MUNICIPAL BOND FUND, California Series
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, CALIFORNIA SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, California Series (one of the Series constituting the Premier Insured
Municipal Bond Fund) as of July 31, 1994, and the related statements of
operations and changes in net assets and financial highlights for the period
from August 19, 1993 (commencement of operations) to July 31, 1994. 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 audit.
We conducted our audit 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 July 31, 1994 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 Premier Insured Municipal Bond Fund, California Series at July
31, 1994, and the results of its operations, the changes in its net assets
and the financial highlights for the period from August 19, 1993 to July 31,
1994, in conformity with generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
September 9, 1994
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Series hereby designates all the
dividends paid from investment income-net during the period August 19, 1993
(commencement of operations) to July 31, 1994 as "exempt-interest dividends"
(not subject to regular Federal and, for individuals who are California
residents, California personal income taxes).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Series' taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1994 calendar year
on Form 1099-DIV which will be mailed by January 31, 1995.
PREMIER INSURED MUNICIPAL
BOND FUND, CALIFORNIA SERIES
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. 076/629AR947
Annual Report
Premier Insured
Municipal Bond Fund
California Series
July 31, 1994
(Dreyfus Lion Logo)
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER INSURED MUNICIPAL BOND FUND, CALIFORNIA SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
___________________________________________________
| | | |
| | | PREMIER INSURED |
| PERIOD | LEHMAN BROTHERS |MUNICIPAL BOND FUND,|
| | MUNICIPAL | CALIFORNIA SERIES |
| | BOND INDEX * | (CLASS A SHARES) |
|-----------|-----------------|--------------------|
| 8/19/93 | 10,000 | 9,549 |
| 10/31/93 | 10,133 | 9,811 |
| 1/31/94 | 10,373 | 10,115 |
| 4/30/94 | 9,775 | 9,068 |
| 7/31/94 | 9,979 | 9,296 |
|--------------------------------------------------|
*Source: Lehman Brothers
Actual Aggregate Total Return
Class A
------------------------------------------------------------------------
% Return
Reflecting
% Return Without Maximum Initial
Sales Charge Sales Charge (4.5%)
-------------------- ---------------------
From Inception (8/19/93)
to July 31, 1994............. (2.65%) (7.04%)
Class B
------------------------------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Redemption Redemption *
-------------------- ---------------------
From Inception (8/19/93)
to July 31, 1994............. (3.04%) (5.82%)
