PREMIER INSURED MUNICIPAL BOND FUND, California Series
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier Insured
Municipal Bond Fund, California Series. For its semi-annual reporting period
ended January 31, 1996, your Series earned a total return, including bond
price changes and interest income of 9.30% for Class A shares, 9.09% for
Class B shares and, from their inception on December 4, 1995, an aggregate
actual total return of 1.71% for Class C shares.* Income dividends, exempt
from Federal and State of California personal income taxes, of approximately
$.265 per share for Class A shares, $.233 per share for Class B shares and
$.069 per share for Class C shares were paid to shareholders.** This is
equivalent to an annualized tax-free distribution rate per share of 4.06% for
Class A shares, 3.74% for Class B shares and 3.45% for Class C shares.***
THE ECONOMY
On January 31, the last day of the Series' reporting period, the Federal
Reserve Board once again lowered the Federal Funds rate another quarter of a
point to 5.25%. The Federal Funds rate is the rate of interest that the
nation's banks charge each other for overnight loans and is a key benchmark
for all other short-term interest rates. The Federal Reserve also reduced the
Discount Rate, the rate that the Fed charges banks for loans, by a quarter of
a point to 5.0%. The reduction in interest rates was a continuation of the
easing monetary policy of the Fed, a stance that has prevailed since last
July.
Mounting evidence that economic growth has been slowing, combined with
favorable inflation reports, indicate that the threat of recession outweighs
near-term worries of a resurgence in price inflation. The Consumer Price
Index rose only 2.5% in 1995, the lowest rate in nearly a decade. It also
marked the fourth consecutive year that the CPI rose less than 3%. The
consumer sector of the economy was of increasing concern to economic policy
makers. The consumer sector comprises two thirds of the nation's economic
activity, and retail sales reports in December revealed the worst holiday
season since the 1990-91 recession. Personal income growth remains sluggish.
The Conference Board, an independent business group, reported that the
Board's index of consumer confidence declined sharply in January as consumers
worried about Federal budget negotiations and the recent flurry of layoff
announcements by major corporations.
Industrial production is only moderate. Output of the nation's factories
crept up 0.1% in December. The annual rate of production slowed to 0.8% in
the fourth quarter of 1995, compared with 3.2% for the previous three months.
For the full calendar year, output rose 3.2%, little more than half the 5.9%
rate in 1994.
There are strong indications that inflation is under control. Until
midyear 1995, fear of inflation was the overriding concern of the Federal
Reserve. Now the focus seems to have shifted to actions designed to avoid
recession. Since last July, the Fed has moved three times to lower interest
rates. Should more signs of economic weakness emerge, we believe that
short-term interest rates may continue to be lowered.
MARKET ENVIRONMENT
Municipal bonds have benefited from a noteworthy bull market for the past
year. We believe the outlook remains favorable due to sluggishness in the
economy and little inflationary pressure. If these conditions continue, the
Federal Reserve Board may have reason to lower rates further, which would be
positive for the bond market. Recently however, Fed Chairman Alan Greenspan
remarked that he believes the economy is growing at an acceptable level. The
market has taken this statement to mean that no additional easing is on the
horizon, and has reacted by lowering the prices of fixed-income
investments. The most positive common element in the various market outlooks
for long-term bonds is that inflation continues to be subdued with few
notable threats looming.
The continuing saga of the budget stalemate is an additional concern to
market participants and has contributed to the market's volatility. However,
if the President and Congress can reach an accord to achieve a balanced
budget, it would have strong positive ramifications for the fixed income
markets.
THE PORTFOLIO
At the beginning of the period, new issuance of California municipal
bonds became progressively scant. This forced secondary market offering
prices to higher levels. To exacerbate matters, the supply of insured
securities possessing solid underlying ratings and good structural
characteristics became comparatively thinner. During the period, however, the
portfolio managed to perform quite well on a total return basis. Contributing
factors which benefited the Series were a market which pushed its way higher
and a portfolio structure balanced with discount and premium bond holdings.
Emphasis was placed on consolidating the Series' number of holdings and
purchasing marketable names with longer call protection. The duration of the
series remained somewhat above average. This reflected our confidence that
the municipal market would ultimately forge ahead despite an uneven market
tone on a day-to-day basis during the period.
As we move forward, we feel the Series can benefit from continued
consolidation of its holdings when possible and an emphasis on improving call
protection. We currently intend to continue to emphasize liquidity by
purchasing essential purpose bonds, and investing with an eye toward
side-stepping obvious trouble spots in the California economy.
Included in this report is a series of detailed statements about your
Series' holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the
Series and in The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
February 15, 1996
New York, N.Y.
* Total return includes the reinvestment of dividends and any capital gains
paid, without taking into consideration the initial sales charge in the case
of Class A shares or the applicable contingent deferred sales charge imposed
on redemptions in the case of Class B and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders. Income may be subject to some state and local taxes for
non-California residents.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the case
of Class B and Class C shares.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF INVESTMENTS JANUARY 31, 1996 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-100.0% AMOUNT VALUE
______ ______
<S> <C> <C>
Anaheim Public Financing Authority, Electric Utility Revenue (San Juan)
5.75%, 10/1/2022 (Insured; FGIC)........................................ $ 100,000 $ 102,315
California, GO 6.60%, 2/1/2010 (Insured; AMBAC)............................. 400,000 468,088
California Health Facilities Financing Authority, Revenue:
(Children's Hospital San Diego) 6.50%, 7/1/2020 (Insured; MBIA)......... 200,000 223,496
(College of Osteopathic) 5.75%, 6/1/2018 (Insured; Connie Lee).......... 250,000 250,492
California Maritime Infrastructure Authority, Airport Revenue
(San Diego Unified Port District Airport) 5%, 11/1/2020 (Insured; AMBAC) 500,000 471,200
California Public Works Board, Department of Corrections, LR
(State Prison - Coalinga) 5.375%, 12/1/2019 (Insured; MBIA)............. 100,000 98,932
California Resource and Efficiency Financing Authority, Revenue
(First Resource Efficiency Program) 6%, 7/1/2017 (Insured; AMBAC)....... 200,000 212,320
California Veterans Bonds 6.20%, 2/1/2016 (Insured; AMBAC).................. 250,000 256,613
Calleguas - Las Virgines Public Financing Authority, Installment Purpose
Revenue
5.125%, 7/1/2021 (Insured; FGIC)........................................ 100,000 96,150
Campbell Unified School District 6.25%, 8/1/2019 (Insured; MBIA)............ 500,000 538,920
Central Coast Water Authority, Revenue (State Water Project-Regional
Facilities)
6.60%, 10/1/2022 (Insured; AMBAC)....................................... 200,000 220,274
East Bay Municipal Utility District, Wastewater Treatment Systems Revenue
5.55%, 6/1/2020 (Insured; AMBAC)........................................ 200,000 200,560
Fresno, Sewer Revenue (Fowler Avenue Project) 6.25%, 8/1/2011 (Insured; AMBAC) 500,000 535,480
Los Angeles Community Redevelopment Agency, Tax Allocation
(Bunker Hill Project) 5.625%, 12/1/2023 (Insured; FSA).................. 100,000 100,893
Los Angeles Convention and Exhibition Center Authority, LR, Refunding
5.125%, 8/15/2013 (Insured; MBIA)....................................... 100,000 98,632
Los Angeles Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding
5%, 7/1/2021 (Insured; FGIC)............................................ 200,000 187,818
M-S-R Public Power Agency, Revenue (San Juan Project)
6%, 7/1/2020 (Insured; AMBAC)........................................... 200,000 210,642
Monrovia Redevelopment Agency, Public Parking Facilities Revenue, Refunding
5.20%, 4/1/2013 (Insured; AMBAC)........................................ 100,000 99,487
Moulton - Niguel Water District, Refunding (Consolidated Improvement
District)
5.25%, 9/1/2013 (Insured; MBIA)......................................... 100,000 100,033
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1996 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
______ ______
Northern California, Transmission Revenue, Refunding (Ore Transmission)
5.25%, 5/1/2020 (Insured; MBIA)......................................... $ 100,000 $ 97,252
Port Oakland, Port Revenue, 6.50% 11/1/2016 (Insured; MBIA)................. 200,000 216,794
Riverside County Transportation Commission, Sales Tax Revenue
5.75%, 6/1/2008 (Insured; AMBAC)........................................ 300,000 328,767
Sacramento Municipal Utility District, Electric Revenue, Refunding
5.25%, 11/15/2020 (Insured; MBIA)....................................... 200,000 194,446
San Diego, Sewer Revenue 5%, 5/15/2013 (Insured; AMBAC)..................... 100,000 96,349
San Francisco City and Community Airports, International Commission Airport Revenue
6.25%, 5/1/2012 (Insured; FGIC)......................................... 150,000 161,759
San Jose Redevelopment Agency, Tax Allocation, Refunding
(Merged Area Redevelopment Project) 5.25%, 8/1/2016 (Insured; MBIA)..... 200,000 197,406
San Mateo County Joint Powers Financing Authority, LR, Capital Projects
5.75%, 7/15/2017 (Insured; FSA)......................................... 200,000 205,314
Santa Ana Community Redevelopment Agency, Tax Allocation, Refunding
(South Main Street Redevelopment) 5.25%, 9/1/2013 (Insured; MBIA)....... 100,000 100,033
University of California, Revenue:
Fresno Association Inc. (Auxiliary Residence-Student Project)
6.25%, 2/1/2017 (Insured; MBIA)....................................... 300,000 323,715
5.25%, 11/1/2012 (Insured; MBIA)........................................ 200,000 200,816
Victor, Elementary School District, Capital Appreciation
Zero Coupon, 6/1/2015 (Insured; MBIA)................................... 1,000,000 353,080
______
TOTAL INVESTMENTS
(cost $6,659,783)....................................................... $6,948,076
======
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation GO General Obligation
FGIC Financial Guaranty Insurance Company LR Lease Revenue
FSA Financial Security Assurance MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
<S> <C> <C> <C>
FITCH (A) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
_____ _____ __________ ____________
AAA Aaa AAA 100.0%
====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Fitch currently provides creditworthiness information for a limited
number of investments.
(b) At January 31, 1996, 42.3% of the Series' net assets are insured by
AMBAC and 37.5% are insured by MBIA.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1996 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $6,659,783)-see statement....................................... $6,948,076
Receivable for investment securities sold............................... 1,001,113
Interest receivable..................................................... 117,832
Receivable for shares of Beneficial Interest subscribed................. 9,555
Prepaid expenses........................................................ 32,376
_________
8,108,952
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 3,401
Due to Distributor...................................................... 3,216
Due to Custodian........................................................ 746,656
Accrued expenses and other liabilities.................................. 33,070 786,343
________ _____
NET ASSETS ................................................................ $7,322,609
=========
REPRESENTED BY:
Paid-in capital......................................................... $7,059,529
Accumulated net realized (loss) on investments.......................... (25,213)
Accumulated net unrealized appreciation on investments-Note 3........... 288,293
_________
NET ASSETS at value......................................................... $7,322,609
=========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 269,006
========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 323,030
========
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 82
========
NET ASSET VALUE per share:
Class A Shares
($3,323,978 / 269,006 shares)......................................... $12.36
========
Class B Shares
($3,997,617 / 323,030 shares)......................................... $12.38
========
Class C Shares
($1,014 / 82 shares).................................................. $12.37
========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF OPERATIONS SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $203,094
EXPENSES:
Management fee-Note 2(a).............................................. $ 20,177
Shareholder servicing costs-Note 2(c)................................. 14,936
Distribution fees-Note 2(b)........................................... 9,477
Organization expenses................................................. 5,520
Registration fees..................................................... 2,428
Prospectus and shareholders' reports.................................. 1,938
Professional fees..................................................... 784
Custodian fees........................................................ 529
Trustees' fees and expenses-Note 2(d)................................. 483
Miscellaneous......................................................... 3,815
______
TOTAL EXPENSES.................................................. 60,087
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 9,294
______
NET EXPENSES.................................................... 50,793
_______
INVESTMENT INCOME-NET........................................... 152,301
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (13,655)
Net unrealized appreciation on investments.............................. 505,293
_______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 491,638
_______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $643,939
=======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
JULY 31, JANUARY 31, 1996
1995 (UNAUDITED)
__________ _______________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 317,088 $ 152,301
Net realized (loss) on investments...................................... (11,558) (13,655)
Net unrealized appreciation on investments for the period............... 67,281 505,293
_________ __________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 372,811 643,939
_________ __________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (157,005) (78,470)
Class B shares........................................................ (160,083) (73,825)
Class C shares........................................................ _ (6)
_________ __________
TOTAL DIVIDENDS................................................... (317,088) (152,301)
_________ __________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 2,395,751 160,570
Class B shares........................................................ 1,798,008 289,135
Class C shares........................................................ - 1,000
Dividends reinvested:
Class A shares........................................................ 52,720 24,008
Class B shares........................................................ 99,361 54,897
Class C shares........................................................ - 6
Cost of shares redeemed:
Class A shares........................................................ (441,885) (625,310)
Class B shares........................................................ (771,920) (391,543)
_________ __________
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS........................................... 3,132,035 (487,237)
_________ __________
TOTAL INCREASE IN NET ASSETS.................................... 3,187,758 4,401
NET ASSETS:
Beginning of period..................................................... 4,130,450 7,318,208
_________ __________
End of period........................................................... $7,318,208 $7,322,609
===== =========
</TABLE>
<TABLE>
<CAPTION>
SHARES
____________________________________________________________________________________________
CLASS A CLASS B CLASS C
__________________________________ __________________________________ _________________
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
JULY 31, JANUARY 31, 1996 JULY 31, JANUARY 31, 1996 JANUARY 31, 1996
1995 (UNAUDITED) 1995 (UNAUDITED) (UNAUDITED)*
---------- ----------------- ---------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE
TRANSACTIONS:
Shares sold.......... 211,279 13,254 158,840 23,663 82
Shares issued for dividends
reinvested......... 4,664 1,994 8,762 4,567 -
Shares redeemed...... (38,340) (51,221) (69,492) (33,113) -
______ ______ ______ ______ __________
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING........ 177,603 (35,973) 98,110 (4,883) 82
====== ====== ====== ====== ==========
*From December 4, 1995 (commencement of initial offering) to January 31,
1996.
See independent accountants' review report and 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 each period indicated. This
information has been derived from the Series' financial statements.
CLASS A SHARES CLASS B SHARES CLASS C SHARES
______________________________________ _______________________________ ______________
YEAR ENDED JULY 31, SIX MONTHS ENDED YEAR ENDED JULY 31, SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, 1996 JANUARY 31, 1996 JANUARY 31, 1996
__________________ ________________
PER SHARE DATA: 1994(1) 1995 (UNAUDITED) 1994(1) 1995 (UNAUDITED) (UNAUDITED)(2)
_______ ______ _______ _______ ______ ______ _______
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $12.50 $11.56 $11.56 $12.50 $11.57 $11.57 $12.24
_____ _____ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income-net..................... .62 .64 .26 .56 .58 .23 .07
Net realized and unrealized gain (loss)
on investments.......................... (.94) - .80 (.93) - .81 .13
____ ____ ____ ____ _____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS........ (.32) .64 1.06 (.37) .58 1.04 .20
____ ____ ____ ____ ____ ____ ____
DISTRIBUTIONS;
Dividends from investment income-net...... (.62) (.64) (.26) (.56) (.58) (.23) (.07)
____ ____ ____ ____ ____ ____ ____
Net asset value, end of period............ $11.56 $11.56 $12.36 $11.57 $11.57 $12.38 $12.37
==== ==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN (3)................... (2.79%)(4) 5.80% 18.45%(4) (3.20%)(4) 5.27% 18.03%(4) 10.58%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... - .08% 1.12%(4) .50%(4) .57% 1.64%(4) 2.22%(4)
Ratio of net investment income to average
net assets.............................. 5.30%(4) 5.56% 4.42%(4) 4.78%(4) 5.10% 3.90%(4) 3.47%(4)
Decrease reflected in above expense ratios
due to undertakings by the Manager...... 2.50%(4) 1.49% .25%(4) 2.50%(4) 1.55% .25%(4) -
Portfolio Turnover Rate................... - 3.86% 19.62%(5) - 3.86% 19.62%(5) 19.62%(5)
Net Assets, end of period (000's Omitted). $1,473 $3,525 $3,324 $2,658 $3,793 $3,998 $1 (1)
From August 19, 1993 (commencement of operations) to July 31, 1994.
(2) From December 4, 1995 (commencement of initial offering) to January 31, 1996.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Insured Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering six series including the California Series (the "Series"). The
Fund's investment objective is to maximize current income exempt from Federal
and, where applicable, from State personal income taxes to the extent
consistent with the preservation of capital. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund shares. The Series offers Class A, Class B and Class
C shares. Class A shares are subject to a sales charge imposed at the time of
purchase, 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 and Class C shares are subject to a contingent deferred sales charge
imposed at the time of redemption on redemptions made within one year of
purchase. Other differences between the three Classes include the services
offered to and the expenses borne by each Class and certain voting rights.
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.
(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.
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.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(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 continue 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 and
excise taxes.
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
(excluding distribution expenses and 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 Series' net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from August 1, 1995 through September 28, 1995, to
reduce the management fee and reimburse such excess expenses paid by the
Series, to the extent that the Series' aggregate expenses (exclusive of
certain expenses as described above) exceeded specified annual percentages of
the Series' average daily net assets. The Manager has currently undertaken
from September 29, 1995 through July 31, 1996, to reduce the management fee
and reimburse such excess expenses paid by the Series, to the extent that the
Series' aggregate annual expenses (excluding 12b-1 distribution plan fees and
certain expenses as described above) exceed an annual rate of 1.25 of 1% of
the average daily value of the Series' net assets. The reduction in
management fee, pursuant to the undertakings, amounted to $9,294 for the six
months ended January 31, 1996.
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.
Effective December 1, 1995, the Series compensates Dreyfus Transfer,
Inc., a wholly-owned subsidiary of the Manager, under a transfer agency
agreement for providing personnel and facilities to perform transfer agency
services for the Series. Such compensation amounted to $558 for the period
from December 1, 1995 through January 31, 1996.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Series pays the Distributor for distributing the Series' Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B shares and .75 of 1% of the value of the average
daily net assets of Class C shares. For the period ended January 31, 1996,
$9,476 was charged to the Series for the Class B shares and $1 was charged to
the Series for the Class C shares.
PREMIER INSURED MUNICIPAL BOND FUND, California Series
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) Under the Shareholder Services Plan, the Series pays the Distributor
at an annual rate of .25 of 1% of the value of the
average daily net assets of Class A, Class B and Class C shares for the
provision of certain services. 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. The
Distributor may make payments to Service Agents in respect of these services.
The Distributor determines the amounts to be paid to Service Agents. For the
period ended January 31, 1996, $4,432, $4,738 and $1 were charged to the
Class A, Class B and Class C shares, respectively, by the Distributor
pursuant to the Shareholder Services Plan.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, for the six months ended January 31, 1996
amounted to $1,434,641 and $1,352,503, respectively.
At January 31, 1996, accumulated net unrealized appreciation on
investments was $288,293, consisting of $304,480 unrealized appreciation and
$16,187 gross unrealized depreciation.
At January 31, 1996, 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
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, CALIFORNIA SERIES
We have reviewed 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 January 31, 1996, and the related statements of
operations and changes in net assets and financial highlights for the six
month period ended January 31, 1996. 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
July 31, 1995 and financial highlights for each of the two years in the
period ended July 31, 1995 and in our report dated September 6, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst and Young LLP signature logo]
New York, New York
March 8, 1996
[Dreyfus lion "d" logo]
PREMIER INSURED MUNICIPAL
BOND FUND, CALIFORNIA SERIES
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
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 076/629/602SA961
[Dreyfus logo]
Semi-Annual Report
Premier Insured
Municipal Bond Fund
California Series
January 31, 1996
