PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier Insured
Municipal Bond Fund, National Series. For its annual reporting period ended
July 31, 1996, your Series earned a total return, including bond price
changes, interest income and capital gain distributions of 5.56% for Class A
shares, 5.09% for Class B shares and, since their inception on December 4,
1995, -.62% for Class C shares.* Income dividends, exempt from Federal
personal income taxes, of approximately $.634 per share for Class A shares,
$.566 per share for Class B shares and $.344 per share for Class C shares,
were paid to shareholders.** This is equivalent to a tax-free annualized
distribution rate per share of 4.61% for Class A shares, 4.31% for Class B
shares and 3.98% for Class C shares.+
THE ECONOMY
Strong second-quarter growth, a tightening labor market and signs of
upward pressure on wages have, in the words of its Chairman Alan Greenspan,
placed the Federal Reserve Board (the "Fed") in a state of "heightened
surveillance" regarding signs of potentially higher inflation. So far,
inflation reports have been benign. Through July, the Consumer Price Index
rose 3.0% for the preceding 12 months, generally consistent with its trend
over the past several years. Wholesale prices have been similarly well-behaved,
while commodity prices have been in decline since early spring. As
favorable as these reports have been, the Fed looks deeper into the economy
for signs of strain that could result in increased inflation. Before the Fed
began its last round of interest rate increases in early 1994, there was
little actual evidence of inflation.
Investor fears that the Fed would raise short-term interest rates
resulted in a rise in long-term interest rates of a full percentage point
since January. Ironically, this rise might have stayed the Fed's hand from
being more aggressive. The rise in interest rates, according to one growing
view, may contribute to a moderation of growth of consumer spending and
housing, and so of economic growth generally over the second half of the
year. Yet, little evidence of a potential slowdown has emerged so far. Higher
mortgage rates have not tempered growth in the housing market and
construction starts of new homes are at their highest level since April 1994.
Retail sales growth remains solid despite rises in consumer installment debt
and credit card delinquencies. On the manufacturing side of the economy,
industrial production continues to gain without any sign of strain to keep up
with demand. Capacity utilization (83.2% of potential output at midyear)
remains below the 85% level that most economists believe indicates a
potential for inflationary bottlenecks. Still, we remain alert to signs of
inflationary pressures that might trigger further increases in interest
rates.
MARKET ENVIRONMENT
The municipal market experienced a dramatic decline beginning in the
first quarter of 1996. Precipitating this decline was the surprising growth
in employment and a brisk increase in retail sales. The market reaction to
the growth in these numbers was swift. In a matter of weeks, interest rates
as measured by long-maturity U.S. Government bonds rose from below 6% to
above 7%-a rise of about 16% in yield. This negative price action pulled
municipals down in value albeit to a somewhat lesser extent. Inflation,
however, has yet to show any troubling rise with staying power. Each harmful
statistic indicating a return to inflation has been followed by data
suggesting a slowing economy and a falling or stable inflationary trend.
Beginning in April, the market began to stabilize in the new, lower
trading range. More recently, the market has moved out of this range to the
upside-a positive development. While we are pleased to see this movement to
higher price levels, the market remains vulnerable to further downward
pressure should further economic strength appear. Economic weakness, on the
other hand, would prove beneficial to long-term security prices, relieving
immediate fears of renewed inflation. On a positive note, the municipal
market continues to benefit from lower supplies of new issues and less
discussion of a flat tax, both of which had produced price weakness in prior
periods.
THE PORTFOLIO
We entered 1996 aggressively positioned with a long-duration portfolio.
Our expectation was that the economy, and therefore inflation, would remain
subdued. Furthermore we expected the market to respond primarily to the
continued flow of low inflationary data. With this rate expectation and
structure, the portfolio was more vulnerable to the downturn which occurred.
We have not altered the structure of the portfolio since the downturn in
March. We still have an aggressive structure-poised to benefit should the
inflationary fears prove unsubstantiated. We are further encouraged by the
recent market moves to the higher levels mentioned previously.
While mindful of the risks of additional declines, we believe that much
of the market correction is behind us. We are ready to take strong defensive
action should the market begin to decline again.
Our primary tasks-to earn a high level of current income to the extent
consistent with the preservation of capital, while maintaining the highest
levels of credit quality-continue to guide our portfolio management
decisions.
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 greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
August 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into account the maximum 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 shares and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
+ 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 net asset value per share at the end of the period in the case of
Class C shares, adjusted for capital gain distribution.
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES JULY 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER INSURED
MUNICIPAL BOND FUND, NATIONAL SERIES CLASS A SHARES AND CLASS B SHARES AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
[Exhibit A:
Dollars
$11,739
Lehman Brothers
Municipal Bond Index*
$11,518
Premier Insured Municipal Bond Fund, National Series (Class B Shares)
$11,308
Premier Insured Municipal Bond Fund, National Series (Class A Shares)
*Source: Lehman Brothers]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
______________________________ ______________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 7/31/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 7/31/96 Redemption Redemption*
____________ ________ _________ ____________ ______ __________
<S> <C> <C> <C> <C> <C>
1 Year 5.56% 0.83% 1 Year 5.09% 2.09%
From Inception (5/3/94) 7.80 5.62 From Inception (5/3/94) 7.30 6.48
ACTUAL AGGREGATE TOTAL RETURNS
CLASS C SHARES
______________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 7/31/96 No Redemption Redemption**
____________ ________ _________
From Inception (12/4/95) (0.62)% (1.59%)
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A
shares and Class B shares of Premier Insured Municipal Bond Fund, National
Series on 5/3/94 (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 4/30/94 is used as the beginning value on 5/3/94. All
dividends and capital gain distributions are reinvested. Performance for
Class C shares will vary from the performance of Class A and Class B shares
shown above due to differences in charges and expenses.
The Series invests primarily in municipal securities, which are insured as to
the timely payment of principal and interest by recognized insurers of
municipal securities. The Series performance shown in the line graph takes
into account the maximum initial sales charge on Class A shares and the
maximum contingent deferred sales charge on Class B 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 municipal market
overall; however, the bonds in the Index generally are not insured. The Index
does not take into account charges, fees and other expenses which can
contribute to the Index potentially outperforming the Series. Further
information relating to Series performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report. Neither the Series shares nor the
market value of its portfolio securities are insured.
*The maximum contingent deferred sales charge for Class B shares is 3%
and is reduced to 0% after five years.
** The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
STATEMENT OF INVESTMENTS JULY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-96.8% AMOUNT VALUE
_______ ______
<S> <C> <C>
CALIFORNIA-15.0%
Bay Area Association, Tax Allocation Revenue (California Redevelopment Agency
Pool)
6%, 12/15/2024 (Insured; CGIC).......................................... $ 250,000 $ 251,032
California Housing Finance Agency, Revenue 5.70%, 8/1/2016 (Insured; MBIA).. 200,000 195,340
California Pollution Control Financing Authority, PCR
(Southern California Edison Co.) 6.40%, 12/1/2024 (Insured; AMBAC)...... 400,000 412,580
Los Angeles, Wastewater System Revenue:
5.20%, 11/1/2021 (Insured; FGIC)........................................ 200,000 180,870
Refunding, 5.875%, 6/1/2024 (Insured; MBIA)............................. 200,000 200,722
Redding Redevelopment Agency, Tax Allocation Notes
5%, 9/1/2023 (Insured; CGIC)............................................ 200,000 174,704
San Marcos Public Facilities Authority, Tax Allocation Revenue, Refunding
5.50%, 8/1/2023 (Insured; CGIC)......................................... 1,000,000 940,540
San Mateo County Joint Powers Financing Authority, LR
(San Mateo County Health Care Center) 5.75%, 7/15/2022 (Insured; FSA)... 500,000 496,980
FLORIDA-1.0%
Miami Health Facilities Authority, Health Facility Revenue, Refunding
(Mercy Hospital Project) 5.125%, 8/15/2020 (Insured; AMBAC)............. 200,000 182,246
ILLINOIS-11.7%
Chicago, Wastewater Transmission Revenue:
6.375%, 1/1/2024 (Insured; MBIA)........................................ 200,000 207,854
Refunding, 5.125%, 1/1/2025 (Insured; FGIC)............................. 1,000,000 890,620
Chicago Midway Airport, Revenue 6.25%, 1/1/2024 (Insured; MBIA)............. 200,000 202,326
Chicago O'Hare International Airport, Revenue, Refunding
5.60%, 1/1/2018 (Insured; MBIA)......................................... 200,000 190,994
Illinois Health Facilities Authority, Revenue:
(Northwestern Medical Faculty Foundation-Health Care)
6.625%, 11/15/2025 (Insured; MBIA).................................... 500,000 535,375
Refunding (Lutheran General Health System) 6.25%, 4/1/2018 (Insured; FSA) 200,000 202,580
INDIANA-14.7%
Indiana Development Finance Authority, Environmental Revenue (PSI Energy,
Inc.)
5.75%, 2/15/2028 (Insured; MBIA)........................................ 1,000,000 957,270
Indiana Health Facility Financing Authority, HR:
(Lutheran Hospital of Indiana, Inc.) 7%, 2/15/2019 (Insured; AMBAC)..... 600,000 647,892
Refunding (County Hospital of Anderson Project) 6%, 1/1/2014 (Insured; MBIA) 1,000,000 1,001,570
Lafayette Redevelopment Authority, Redevelopment Lease Rent
5.95%, 1/1/2020 (Insured; MBIA)......................................... 200,000 199,112
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
IOWA-1.7%
Clinton, PCR, Refunding (Interstate Power Co. Project)
6.35%, 12/1/2012 (Insured; AMBAC)....................................... $ 300,000 $ 324,843
MASSACHUSETTS-10.8%
Massachusetts Housing Finance Agency:
Housing Revenue, Refunding 6.75%, 7/1/2028 (Insured; AMBAC)............. 1,000,000 1,034,980
SFHR 6.60%, 12/1/2026 (Insured; AMBAC).................................. 1,000,000 1,027,770
NEVADA-2.1%
Clark County Passenger Facility Charge, Revenue, Custodial Receipts
(Las Vegas McCarran International Airport) 6.25%, 7/1/2022 (Insured; AMBAC) 200,000 201,662
Washoe County Gas & Water Facilities Revenue (Sierra Pacific Power Co.)
5.90%, 6/1/2023 (Insured; MBIA)......................................... 200,000 200,732
NEW JERSEY-13.2%
New Jersey Building Authority, Building Revenue, Refunding
5%, 6/15/2017 (Insured; MBIA)........................................... 500,000 458,990
New Jersey Economic Development Authority:
PCR (Public Service Electric & Gas Co.) 6.40%, 5/1/2032 (Insured; MBIA). 200,000 207,838
Water Facilities Revenue (NJ American Water Co., Inc. Project)
6.875%, 11/1/2034 (Insured; FGIC)..................................... 500,000 544,990
New Jersey Housing and Mortgage Finance Agency, Home Buyer Revenue
6.375%, 10/1/2026 (Insured; MBIA)....................................... 500,000 505,270
Passaic Valley Water Commission, Water Supply Revenue, Refunding
5%, 12/15/2022 (Insured; FGIC).......................................... 880,000 798,081
NEW MEXICO-6.4%
Farmington, PCR, Refunding (Southern California Edison Co.)
5.875%, 6/1/2023 (Insured; MBIA)........................................ 1,000,000 1,003,320
Santa Fe 6.30%, 6/1/2024 (Insured; AMBAC)................................... 200,000 219,586
NEW YORK-1.1%
New York State Energy Research and Development Authority, PCR, Refunding
(Rochester Gas & Electric Project) 6.50%, 5/15/2032 (Insured; MBIA)..... 200,000 206,944
NORTH DAKOTA-1.1%
Grand Forks, Health Care Facilities Revenue (United Hospital Obligated Group)
6.25%, 12/1/2019 (Insured; MBIA)........................................ 200,000 206,040
OKLAHOMA-2.3%
Oklahoma Industries Authority, HR (Baptist Medical Center)
7%, 8/15/2014 (Insured; AMBAC).......................................... 400,000 442,212
OREGON-3.7%
Oregon Health Sciences, University Revenue 5.25%, 7/1/2025 (Insured; MBIA).. 750,000 701,903
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ ______
SOUTH CAROLINA-1.1%
South Carolina Public Service Authority, Revenue, Refunding
6.375%, 7/1/2021 (Insured; AMBAC)....................................... $ 200,000 $ 208,170
TEXAS-3.8%
Austin, Airport Systems Revenue 6.125%, 11/15/2025 (Insured; MBIA).......... 500,000 504,405
Gulf Coast Waste Disposal Authority, Revenue, Refunding
(Houston Light & Power Co. Project) 6.375%, 4/1/2012 (Insured; MBIA).... 200,000 211,438
VERMONT-1.4%
Vermont Student Assistance Corp. (Education Loan Revenue Financing Program)
6.70%, 12/15/2012 (Insured; FSA)........................................ 250,000 262,427
WASHINGTON-5.7%
Washington, MFMR 7.40%, 1/1/2030 (Insured; FSA)............................. 1,000,000 1,074,960
______
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $17,959,627)...................................................... $18,417,168
======
SHORT-TERM MUNICIPAL INVESTMENTS-3.2%
U.S. RELATED;
Puerto Rico Electric Power Authority, Power Revenue 3.41%, 7/1/2023 (a)
(cost $600,000)......................................................... $ 600,000 $ 600,000
======
TOTAL INVESTMENTS-100.0% (cost $18,559,627)................................. $19,017,168
======
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
CGIC Capital Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance MFMR Multi-Family Mortgage Revenue
HR Hospital Revenue PCR Pollution Control Revenue
SFHR Single Family Housing Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
<S> <C> <C> <C>
FITCH (B) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
_____ _____ __________ ____________
AAA Aaa AAA 100.0%
====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater security-the interest rate is subject to change
periodically.
(b) Fitch currently provides creditworthiness information for a limited
number of investments.
(c) At July 31, 1996, 41.0% of the Series' net assets are insured by
MBIA.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1996
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $18,559,627)-see statement...................................... $19,017,168
Cash.................................................................... 34,584
Interest receivable..................................................... 233,209
Prepaid expenses........................................................ 35,273
______
19,320,234
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 6,710
Due to Distributor...................................................... 8,581
Accrued expenses and other liabilities.................................. 34,909 50,200
____ ______
NET ASSETS ................................................................ $19,270,034
======
REPRESENTED BY:
Paid-in capital......................................................... $18,720,804
Accumulated undistributed net realized gain on investments.............. 91,689
Accumulated net unrealized appreciation on investments-Note 3........... 457,541
______
NET ASSETS at value......................................................... $19,270,034
======
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 643,717
======
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 831,077
======
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 76
======
NET ASSET VALUE per share:
Class A Shares
($8,408,991 / 643,717 shares)......................................... $13.06
======
Class B Shares
($10,860,050 / 831,077 shares)........................................ $13.07
======
Class C Shares
($993 / 76 shares).................................................... $13.07
======
See notes to financial statements.
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1996
INVESTMENT INCOME:
INTEREST INCOME......................................................... $1,160,228
EXPENSES:
Management fee-Note 2(a).............................................. $106,758
Shareholder servicing costs-Note 2(c)................................. 71,848
Distribution fees-Note 2(b)........................................... 53,531
Registration fees..................................................... 29,217
Auditing fees......................................................... 16,268
Legal fees............................................................ 6,185
Prospectus and shareholders' reports.................................. 3,258
Trustees' fees and expenses-Note 2(d)................................. 2,304
Custodian fees........................................................ 2,178
Miscellaneous......................................................... 16,395
_____
TOTAL EXPENSES.................................................... 307,942
Less-reduction in management fee due to undertakings-Note 2(a)........ 25,258
_____
NET EXPENSES...................................................... 282,684
_____
INVESTMENT INCOME-NET............................................. 877,544
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 3:
Net realized gain on investments........................................ $107,880
Net unrealized appreciation on investments.............................. 21,056
_____
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 128,936
_____
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,006,480
=====
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JULY 31,
_____________________________
1995 1996
_____________________________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 676,423 $ 877,544
Net realized gain on investments........................................ 30,500 107,880
Net unrealized appreciation on investments for the year................. 350,233 21,056
______ ______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 1,057,156 1,006,480
______ ______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (344,399) (418,559)
Class B shares........................................................ (332,024) (458,960)
Class C shares........................................................ - (25)
Net realized gain on investments:
Class A shares........................................................ - (20,944)
Class B shares........................................................ - (25,745)
Class C shares........................................................ - (2)
______ ______
TOTAL DIVIDENDS................................................... (676,423) (924,235)
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 6,783,807 1,931,728
Class B shares........................................................ 6,636,400 1,825,900
Class C shares........................................................ - 1,000
Dividends reinvested:
Class A shares........................................................ 196,495 267,130
Class B shares........................................................ 220,212 311,548
Class C shares........................................................ - 28
Cost of shares redeemed:
Class A shares........................................................ (1,446,725) (2,111,785)
Class B shares........................................................ (628,161) (1,048,828)
______ ______
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 11,762,028 1,176,721
______ ______
TOTAL INCREASE IN NET ASSETS.................................... 12,142,761 1,258,966
NET ASSETS:
Beginning of year....................................................... 5,868,307 18,011,068
______ ______
End of year............................................................. $18,011,068 $19,270,034
====== ======
</TABLE>
<TABLE>
<CAPTION>
SHARES
________________________________________________________________________________
CLASS A CLASS B CLASS C
________________________________ ________________________________ _______
YEAR ENDED
YEAR ENDED JULY 31, YEAR ENDED JULY 31, JULY 31,
________________________________ ________________________________
1995 1996 1995 1996 1996*
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............ 542,334 147,108 522,906 138,665 74
Shares issued for dividends
reinvested........... 15,476 20,186 17,318 23,538 2
Shares redeemed........ (117,090) (159,424) (49,943) (79,501) -
_______ _______ _______ _______ _______
NET INCREASE IN SHARES
OUTSTANDING.... 440,720 7,870 490,281 82,702 76
======= ======= ======= ======= =======
_______________________________
*From December 4, 1995 (commencement of initial offering) to July 31,
1996.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL 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 year indicated. This
information has been derived from the Series' financial statements.
CLASS A SHARES
__________________________________
YEAR ENDED JULY 31,
__________________________________
PER SHARE DATA: 1994(1) 1995 1996
____ ____ ____
<S> <C> <C> <C>
Net asset value, beginning of year.................................... $12.50 $12.94 $13.01
____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net................................................. .18 .77 .63
Net realized and unrealized gain on investments....................... .44 .07 .08
____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS.................................... .62 .84 .71
____ ____ ____
DISTRIBUTIONS:
Dividends from investment income-net.................................. (.18) (.77) (.63)
Dividends from net realized gain on investments....................... - - (.03)
____ ____ ____
TOTAL DISTRIBUTIONS................................................. (.18) (.77) (.66)
____ ____ ____
Net asset value, end of year.......................................... $12.94 $13.01 $13.06
==== ==== ====
TOTAL INVESTMENT RETURN(2)................................................ 4.99%(3) 6.86% 5.56%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................... - .08% 1.17%
Ratio of net investment income to average net assets.................. 5.44%(4) 6.02% 4.80%
Decrease reflected in above expense ratios due to undertakings
by the Manager (limited to the expense limitation provision
of the management agreement)........................................ 2.50%(4) 1.25% .13%
Portfolio Turnover Rate............................................... - 9.17% 29.73%
Net Assets, end of year (000's Omitted)............................... $2,525 $8,272 $8,409
_________________________________
(1) From May 4, 1994 (commencement of operations) to July 31, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Series' financial statements.
CLASS B SHARES CLASS C SHARES
____________________________ _________
YEAR ENDED
YEAR ENDED JULY 31, JULY 31,
____________________________
PER SHARE DATA: 1994(1) 1995 1996 1996(2)
____ ____ ____ ______
<S> <C> <C> <C> <C>
Net asset value, beginning of year...................... $12.50 $12.95 $13.01 $13.53
____ ____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net................................... .16 .71 .57 .34
Net realized and unrealized gain (loss) on investments.. .45 .06 .09 (.43)
____ ____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS...................... .61 .77 .66 (.09)
____ ____ ____ ____
DISTRIBUTIONS:
Dividends from investment income-net.................... (.16) (.71) (.57) (.34)
Dividends from net realized gain on investments......... - - (.03) (.03)
____ ____ ____ ____
TOTAL DISTRIBUTIONS................................... (.16) (.71) (.60) (.37)
____ ____ ____ ____
Net asset value, end of year............................ $12.95 $13.01 $13.07 $13.07
==== ==== ==== ====
TOTAL INVESTMENT RETURN(3).................................. 4.94%(4) 6.24% 5.09% (.94%)(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. .50%(5) .59% 1.68% 2.08%(5)
Ratio of net investment income to average net assets.... 4.90%(5) 5.51% 4.28% 3.84%(5)
Decrease reflected in above expense ratios due to undertakings
by the Manager (limited to the expense limitation provision
of the management agreement).......................... 2.50%(5) 1.27% .13% 1.17%(5)
Portfolio Turnover Rate................................. - 9.17% 29.73% 29.73%
Net Assets, end of year (000's Omitted)................. $3,343 $9,739 $10,860 $1
__________________________
(1) From May 4, 1994 (commencement of operations) to July 31, 1994.
(2) From December 4, 1995 (commencement of initial offering) to July 31, 1996.
(3) Exclusive of sales load.
(4) Not annualized.
(5) Annualized.
See notes to financial statements.
</TABLE>
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
NOTES TO FINANCIAL STATEMENTS
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 National 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's 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.
The Series' financial statements are prepared in accordance with
generally accepted accounting principals which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(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, NATIONAL SERIES
NOTES TO FINANCIAL STATEMENTS (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 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 value
of the Series' average daily 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 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 value of the Series' average daily net
assets in accordance with California "blue sky" regulations. However, the
Manager had undertaken from August 1, 1995 through September 27, 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 28, 1995 through September 30, 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
the value of the Series' average daily net assets. The reduction in
management fee, pursuant to the undertakings, amounted to $25,258 during the
year ended July 31, 1996.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(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. During the period ended July 31, 1996,
$53,526 was charged to the Series for the Class B shares and $5 was charged
to the Series for the Class C shares.
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
NOTES TO FINANCIAL STATEMENTS (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 (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended July 31, 1996,
$21,762, $26,763 and $2 were charged to Class A, B and C shares, respectively,
by the Distributor pursuant to the Shareholder Services Plan.
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 $6,146 during the
period ended July 31, 1996.
(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, during the year ended July 31, 1996 amounted
to $7,273,519 and $5,624,350, respectively.
At July 31, 1996, accumulated net unrealized appreciation on investments
was $457,541, consisting of $671,889 gross unrealized appreciation and
$214,348 gross unrealized depreciation.
At July 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, NATIONAL SERIES
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER INSURED MUNICIPAL BOND FUND, NATIONAL SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Insured Municipal Bond
Fund, National Series (one of the series constituting the Premier Insured
Municipal Bond Fund) as of July 31, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1996 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Insured Municipal Bond Fund, National Series at July 31,
1996, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
September 4, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Series hereby designates all the
dividends paid from investment income-net during the fiscal year ended July
31, 1996 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
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 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
PREMIER INSURED MUNICIPAL
BOND FUND, NATIONAL 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.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 128/376AR967
[Dreyfus lion/2hres logo]
Annual Report
Premier Insured
Municipal Bond Fund
National Series
July 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER
INSURED MUNICIPAL BOND FUND, NATIONAL SERIES CLASS A SHARES AND
CLASS B SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
____________________________________________________________________
| | | | |
| | | PREMIER INSURED | PREMIER INSURED |
| PERIOD |LEHMAN BROTHERS |MUNICIPAL BOND FUND,|MUNICIPAL BOND FUND,|
| | MUNICIPAL | NATIONAL SERIES | NATIONAL SERIES |
| | BOND INDEX * | (CLASS A SHARES) | (CLASS B SHARES) |
|---------|----------------|--------------------|--------------------|
| 5/3/94 | 10,000 | 9,549 | 10,000 |
| 7/31/94 | 10,209 | 10,025 | 10,494 |
| 7/31/95 | 11,012 | 10,713 | 11,149 |
| 7/31/96 | 11,739 | 11,308 | 11,518 |
|_________|________________|____________________|____________________|
*Source: Lehman Brothers
