DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Insured
Municipal Bond Fund for its fiscal year ended July 31, 1997, as shown in the
following table:
<TABLE>
<CAPTION>
TOTAL RETURN* DISTRIBUTION RATE**
------------ ---------------
<S> <C> <C>
Class A................................ 8.91% 4.20%
Class B................................ 8.28% 3.90%
Class C................................ 8.07% 3.65%
</TABLE>
THE ECONOMY
Optimism about inflation and moderating economic growth brought long-term
interest rates to their lowest levels in nearly eighteen months by the end of
the reporting period. The Gross Domestic Product (GDP), after a remarkably
strong annual growth rate of 4.9% in the first quarter, moderated in the most
recent quarter to just 2.2%. A more reluctant consumer was the prime contributor
to the slowdown, as evidenced by retail sales, which declined from March through
May despite strong job growth and rising incomes. This slowdown helped dispel
fears that the economy was growing too quickly and that the Federal Reserve
might again raise interest rates as a precaution against a resurgence in
inflation. The Federal Open Market Committee ("FOMC"), the policy-making arm
of the Federal Reserve, has raised interest rates just once in more than two
years. That hike came in March 1997 when the Federal Funds rate was increased
by one quarter of a percentage point to 5.50%. (The Federal Funds rate is the
rate of interest that banks charge one another for overnight loans.)
Inflation has been virtually dormant over the reporting period. The
Consumer Price Index (CPI) rose at an annual rate of just 1.4% over the first
six months of the year, the lowest rate for the first half of a year since
1986. For the 12-month period ending in June, the CPI gained a modest 2.3%.
The GDP price deflator, a Commerce Department inflation gauge, posted its
smallest quarterly advance since 1961 when it rose at an annual rate of only
0.7% for the second quarter. Producer prices were even tamer. In June the
Producer Price Index fell for the sixth consecutive month, bringing the Index
to the same level as twelve months earlier.
The tight labor market over the reporting period added to concerns
about a potential rekindling of inflation. The unemployment rate fell to 4.8%
in May, matching a 24-year low; after rising to 5.0% in June, it fell back to
4.8% in July. Despite the robust growth of new jobs, there was little
inflationary pressure from rising wages. Over the past year, salaries and
wages rose 3.2%, a rate that remained noninflationary because of solid
productivity growth, lower energy costs, and a strong dollar that helped keep
the prices of imports down. Corporations continued to seek more efficient
ways of operating. Business investment in new machinery and technology surged
over the reporting period, compensating by efficiency for the thriftiness of
consumers. There appears to be growing evidence that these heavy investments
in high technology have enabled businesses to gain production efficiencies
not readily measured by conventional economic statistics. That may account
for the high level of noninflationary growth achieved by the economy.
Consumer confidence rose throughout the reporting period as incomes
grew and the rapid rate of job creation gave workers a greater sense of
employment stability. The budget accord between Congress and the
administration, and the tax cut proposal announced at the end of July, should
help ease investor concern about the Federal deficit. Tax receipts have
surged, boosted by rising corporate profits and individual incomes. Early
reports indicate that the nation's budget deficit for fiscal year 1997 could
be at its lowest level, as a percentage of the total economy, since 1970.
Despite all the good economic news, we are mindful that the economy is in its
seventh year of low-inflation expansion, and that this is unprecedented. We
remain alert to signs of excess that may pose a threat to our present
economic and financial stability.
MARKET ENVIRONMENT
While the markets closed the most recent reporting period on an
optimistic note, they were not without sporadic bouts of volatility
throughout the year. In late summer and early fall 1996, as attention focused
on the tightening of the labor markets and the economy continued to expand at
a quickening pace, investors became convinced of an imminent tightening of
monetary policy by the FOMC. As such, interest rates were driven to their
highest levels in more than a year. As subsequent data showed an abatement in
the pace of the economy's rate of growth and the absence of any clear signs
of inflationary pressures, market perceptions quickly reversed, sending
prices up and interest rates back down to more comfortable levels. These
rapid shifts in investors' perceptions of the economy and the appropriate
levels of long-term interest rates occurred frequently throughout the year,
establishing a broad trading range in prices. With the turn of the calendar
into 1997, however, these higher levels proved unsustainable as evidence of
the resilience of the economy's current expansion continued to mount. The
resulting rise in long-term interest rates foretold the move by the FOMC to
assume a more restrictive posture at its March meeting. In the ensuing
months, however, there emerged a renewed sense of optimism about the markets
with the evolution of a school of thought proposing a "new paradigm" wherein
the economy could continue to experience an extended period of steady growth
without the attendant surge in inflation we have become accustomed to. This
view was so compelling a force in the market that interest rates were
propelled to their lowest levels of the entire year.
THE PORTFOLIO
In managing your Fund's assets during a period of such volatility, a
decidedly conservative posture was maintained. During those periods when
perceptions became more tentative, emphasis was placed on those securities
bearing more muted characteristics of principal volatility and higher levels
of tax-free income. At these times higher levels of cash reserves were
established in order to further buffer the portfolio from the consequences of
a rising interest rate environment. As perceptions became more constructive
and prices advanced, trading activity sought to extend portfolio duration in
order to capitalize on potential price appreciation inherent in such an
environment. By striving to achieve a balanced posture addressing both the
generation of tax-free income and a measure of total return reflective of the
market in general, your Fund's performance during this reporting period was
affected positively. Throughout this process, investment performance was
further impacted by enhancing the liquidity and appreciation characteristics
of the portfolio, by extending the optional redemption characteristics, and
improving the underlying creditworthiness of its holdings.
We appreciate your investment in the Dreyfus Premier Insured Municipal
Bond Fund, and we want to assure you that we are, at all times, working in
the Fund's best interest.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
August 18, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, and does not take into consideration the maximum initial sales charge
in the case of Class A shares or the contingent deferred sales charge imposed
on redemptions in the case of Class B and Class C shares.
** Distribution rate per share is based upon dividends per share paid from
net investment income during the period, divided by the maximum offering
price at the end of the period in the case of Class A shares or the net asset
value per share in the case of Class B and Class C shares, adjusted for
capital gain distributions. Some investors may be subject to the Federal
Alternative Minimum Tax.
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND JULY 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
INSURED MUNICIPAL BOND FUND
CLASS A SHARES AND CLASS B SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX
$12,943
Lehman Brothers
Municipal Bond Index*
Dollars
$12,387
Dreyfus Premier Insured
Municipal Bond Fund
(Class B Shares)
$12,316
Dreyfus Premier Insured
Municipal Bond Fund
(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 7/31/97 Sales Charge Sales Charge (4.5%) Period Ended 7/31/97 Redemption Redemption*
- -------------------- -------- --------- ------------ ------ ----------
<S> <C> <C> <C> <C> <C>
1 Year 8.91% 3.97% 1 Year 8.28% 4.28%
From Inception (5/3/94) 8.14 6.62 From Inception (5/3/94) 7.60 6.81
</TABLE>
Class C Shares
- -------------------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
Period Ended 7/31/97 Redemption Redemption**
- ------------ -------- ---------
1 Year 8.07% 7.08%
From Inception (12/4/95) 4.40 4.40
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 Dreyfus Premier Insured Municipal Bond Fund 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 both Class A and Class B shares shown above
due to differences in charges and expenses.
The Fund invests primarily in municipal securities which are insured as to
the timely payment of principal and interest by recognized insurers of
municipal securities. The Fund's 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 Fund, 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 Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report. Neither the Fund shares nor the
market value of its portfolio securities are insured.
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six 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>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JULY 31, 1997
Principal
Long-Term Municipal Investments-96.6% Amount Value
------- -------
<S> <C> <C>
California-7.7%
California Housing Finance Agency, Revenue 5.70%, 8/1/2016 (Insured; MBIA).. $ 200,000 $ 203,094
California Pollution Control Financing Authority, PCR (Southern California
Edison Co.)
6.40%, 12/1/2024 (Insured; AMBAC)......................................... 400,000 432,244
Contra Costa, COP (Merrithew Memorial Hospital Project)
5.375%, 11/1/2017 (Insured; MBIA)......................................... 750,000 756,975
Florida-3.8%
Dade County, Water and Sewer Systems Revenue 5.25%, 10/1/2021 (Insured; FGIC) 500,000 496,575
Miami Health Facilities Authority, Health Facility Revenue, Refunding
(Mercy Hospital Project) 5.125%, 8/15/2020 (Insured; AMBAC)............... 200,000 194,852
Georgia-4.2%
Atlanta and Fulton County Recreation Authority, Revenue, Refunding
(Downtown Arena Public Improvement Project) 5.375%, 12/1/2026 (Insured; MBIA) 750,000 753,533
Illinois-12.2%
Chicago Midway Airport, Revenue 6.25%, 1/1/2024 (Insured; MBIA)............. 200,000 212,478
Chicago Wastewater Transmission Revenue:
6.375%, 1/1/2024 (Insured; MBIA).......................................... 200,000 220,680
Refunding, 5.125%, 1/1/2025 (Insured; FGIC)............................... 1,000,000 976,220
Illinois Health Facilities Authority, Revenue:
(Northwestern Medical Faculty Foundation-Health Care)
6.625%, 11/15/2025 (Insured; MBIA)...................................... 500,000 561,610
Refunding (Lutheran General Health System) 6.25%, 4/1/2018 (Insured; FSA). 200,000 221,528
Indiana-10.6%
Indiana Health Facility Financing Authority, HR:
(Lutheran Hospital of Indiana, Inc.) 7%, 2/15/2019 (Insured; AMBAC,
Prerefunded
2/15/1999) (a)......................................................... 600,000 638,526
Refunding (Community Hospital of Anderson Project) 6%, 1/1/2014 (Insured; MBIA) 1,000,000 1,051,170
Lafayette Redevelopment Authority, Redevelopment Lease Rent
5.95%, 1/1/2020 (Insured; MBIA)........................................... 200,000 209,712
Iowa-1.9%
Clinton, PCR, Refunding (Interstate Power Co. Project)
6.35%, 12/1/2012 (Insured; AMBAC)......................................... 300,000 333,177
Massachusetts-11.8%
Massachusetts Housing Finance Agency:
Housing Revenue, Refunding 6.75%, 7/1/2028 (Insured; AMBAC)............... 1,000,000 1,071,820
SFHR 6.60%, 12/1/2026 (Insured; AMBAC).................................... 995,000 1,056,063
Nevada-1.2%
Clark County Passenger Facility Charge, Revenue, Custodial Receipts
(Las Vegas McCarran International Airport) 6.25%, 7/1/2022 (Insured; AMBAC) 200,000 211,584
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
New Jersey-7.3%
New Jersey Economic Development Authority:
PCR (Public Service Electric & Gas Co.) 6.40%, 5/1/2032 (Insured; MBIA)... $ 200,000 $ 218,360
New Jersey Economic Development Authority (continued):
Water Facilities Revenue (NJ American Water Co., Inc. Project)
6.875%, 11/1/2034 (Insured; FGIC)......................................... 500,000 564,675
New Jersey Housing and Mortgage Finance Agency, Home Buyer Revenue
6.375%, 10/1/2026 (Insured; MBIA)......................................... 500,000 524,375
New Mexico-5.6%
Farmington, PCR, Refunding (Southern California Edison Co.)
5.875%, 6/1/2023 (Insured; MBIA).......................................... 750,000 785,610
Santa Fe 6.30%, 6/1/2024 (Insured; AMBAC, Prerefunded 6/1/2004) (a)......... 200,000 222,390
New York-9.5%
Metropolitan Transportation Authority, Dedicated Tax Fund
5.25%, 4/1/2026 (Insured; MBIA)........................................... 1,000,000 992,600
New York State Dormitory Authority, Revenue (Mount Sinai Medical School)
5.15%, 7/1/2024 (Insured; MBIA)........................................... 500,000 501,430
New York State Energy, Research and Development Authority, PCR, Refunding
(Rochester Gas & Electric Project) 6.50%, 5/15/2032 (Insured; MBIA)....... 200,000 217,114
North Dakota-1.2%
Grand Forks Health Care Facilities Revenue (United Hospital Obligated Group)
6.25%, 12/1/2019 (Insured; MBIA).......................................... 200,000 216,546
Oklahoma-2.5%
Oklahoma Industries Authority, HR (Baptist Medical Center)
7%, 8/15/2014 (Insured; AMBAC, Prerefunded 8/15/2000) (a)................. 400,000 440,312
Ohio-2.7%
University of Cincinnati, COP (University of Cincinnati Center Project)
5.125%, 6/1/2024 (Insured; MBIA).......................................... 500,000 492,435
South Carolina-1.2%
South Carolina Public Service Authority, Revenue, Refunding
6.375%, 7/1/2021 (Insured; AMBAC)......................................... 200,000 219,954
Texas-7.1%
Austin, Airport Systems Revenue 6.125%, 11/15/2025 (Insured; MBIA).......... 500,000 532,345
Gulf Coast Waste Disposal Authority, Revenue, Refunding (Houston Light &
Power Co. Project)
6.375%, 4/1/2012 (Insured; MBIA).......................................... 200,000 220,670
South Texas Community College District 5.75%, 8/15/2015 (Insured; AMBAC).... 500,000 525,505
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JULY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
Washington-6.1%
Washington, MFMR 7.40%, 1/1/2030 (Insured; FSA)............................. $ 1,000,000 $ 1,104,360
-------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $16,239,920)........................................................ $17,380,522
======
Short-Term Municipal Investments-3.4%
New York-1.7%
New York City Municipal Water Finance Authority, Water and Sewer System
Revenue, VRDN
3.60% (Insured; FGIC) (b)................................................. $ 300,000 $ 300,000
Texas-1.7%
Brazos River Authority, PCR (Texas Utilities Electric Co.) VRDN 3.65% (Insured; AMBAC) 300,000 300,000
-------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $600,000)...................... $ 600,000
======
TOTAL MUNICIPAL INVESTMENTS-100.0% (cost $16,839,920)....................... $17,980,522
======
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SFHR Single Family Housing Revenue
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> <C> <C>
AAA Aaa AAA 96.6%
F-1, F-1+ VMIG1, MIG1, P1 SP1, A1 3.4
----
100.0%
====
</TABLE>
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(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, 1997, 47.4% of the Fund's net assets are insured by MBIA
and 30.8% are insured by AMBAC.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1997
Cost Value
------- -------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $16,839,920 $17,980,522
Cash....................................... 114,359
Interest receivable........................ 220,737
Prepaid expenses........................... 36,286
-------
18,351,904
-------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 4,694
Due to Distributor......................... 8,136
Payable for shares of Beneficial Interest redeemed 5,754
Accrued expenses and other liabilities..... 23,227
-------
41,811
-------
NET ASSETS.................................................................. $18,310,093
=======
REPRESENTED BY: Paid-in capital............................ $17,120,291
Accumulated net realized gain (loss) on investments 49,200
Accumulated gross unrealized appreciation on investments 1,140,602
-------
NET ASSETS.................................................................. $18,310,093
=======
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
----------------------------------
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Net Assets.................................................. $8,090,323 $10,218,695 $1,075
Shares Outstanding.......................................... 597,902 754,985 79.361
NET ASSET VALUE PER SHARE................................... $13.53 $13.53 $13.54
==== ==== ====
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $1,088,519
EXPENSES: Management fee-Note 3(a)................... $ 103,453
Distribution fees-Note 3(b)................ 53,335
Shareholder servicing costs-Note 3(c)...... 47,647
Registration fees.......................... 47,063
Auditing fees.............................. 18,513
Legal fees................................. 10,816
Prospectus and shareholders' reports....... 8,845
Trustees' fees and expenses-Note 3(d)...... 5,993
Custodian fees............................. 2,837
Loan commitment fees-Note 2................ 157
Miscellaneous.............................. 16,030
------
Total Expenses....................... 314,689
Less-reduction in management fee due to
undertaking-Note 3(a).................. (26,374)
------
Net Expenses......................... 288,315
------
INVESTMENT INCOME-NET....................................................... 800,204
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 49,319
Net unrealized appreciation (depreciation) on investments 683,061
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 732,380
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,532,584
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
July 31, 1997 July 31, 1996
-------- -------
<S> <C> <C>
OPERATIONS:
Investment income-net.................................................. $ 800,204 $ 877,544
Net realized gain (loss) on investments................................ 49,319 107,880
Net unrealized appreciation (depreciation) on investments.............. 683,061 21,056
-------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 1,532,584 1,006,480
-------- -------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares....................................................... (369,967) (418,559)
Class B shares....................................................... (430,199) (458,960)
Class C shares....................................................... (38) (25)
Net realized gain on investments:
Class A shares....................................................... (38,568) (20,944)
Class B shares....................................................... (53,235) (25,745)
Class C shares....................................................... (5) (2)
-------- -------
Total Dividends.................................................. (892,012) (924,235)
-------- -------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 607,447 1,931,728
Class B shares....................................................... 1,347,382 1,825,900
Class C shares....................................................... - 1,000
Dividends reinvested:
Class A shares....................................................... 257,949 267,130
Class B shares....................................................... 330,335 311,548
Class C shares....................................................... 43 28
Cost of shares redeemed:
Class A shares....................................................... (1,471,651) (2,111,785)
Class B shares....................................................... (2,672,018) (1,048,828)
-------- -------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (1,600,513) 1,176,721
-------- -------
Total Increase (Decrease) in Net Assets........................ (959,941) 1,258,966
NET ASSETS:
Beginning of Period.................................................... 19,270,034 18,011,068
-------- -------
End of Period.......................................................... $18,310,093 $19,270,034
======== =======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
----------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Class A
-----
Shares sold............................................................ 46,183 147,108
Shares issued for dividends reinvested................................. 19,586 20,186
Shares redeemed........................................................ (111,584) (159,424)
----- -----
Net Increase (Decrease) in Shares Outstanding (45,815) 7,870
===== =====
Class B
-----
Shares sold............................................................ 102,444 138,665
Shares issued for dividends reinvested................................. 25,069 23,538
Shares redeemed........................................................ (203,605) (79,501)
----- -----
Net Increase (Decrease) in Shares Outstanding (76,092) 82,702
===== =====
Class C*
-----
Shares sold............................................................ -- 74
Shares issued for dividends reinvested................................. 3 2
----- -----
Net Increase (Decrease) in Shares Outstanding 3 76
===== =====
*From December 4, 1995 (commencement of initial offering) to July 31,
1996.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class A Shares
--------------------------------------------------
Year Ended July 31,
--------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994(1)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of period................... $13.06 $13.01 $12.94 $12.50
---- ---- ---- ----
Investment Operations:
Investment income-net.................................. .60 .63 .77 .18
Net realized and unrealized gain (loss)
on investments....................................... .53 .08 .07 .44
---- ---- ---- ----
Total from Investment Operations....................... 1.13 .71 .84 .62
---- ---- ---- ----
Distributions:
Dividends from investment income-net................... (.60) (.63) (.77) (.18)
Dividends from net realized gain on investments........ (.06) (.03) - -
---- ---- ---- ----
Total Distributions.................................... (.66) (.66) (.77) (.18)
---- ---- ---- ----
Net asset value, end of period......................... $13.53 $13.06 $13.01 $12.94
==== ==== ==== ====
TOTAL INVESTMENT RETURN (2)................................ 8.91% 5.56% 6.86% 4.99%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................ 1.24% 1.17% .08% -
Ratio of net investment income
to average net assets................................ 4.54% 4.80% 6.02% 5.44%(4)
Decrease reflected in above expense ratios
due to undertakings by the Manager................... .14% .13% 1.25% 2.50%(4)
Portfolio Turnover Rate................................ 44.50% 29.73% 9.17% -
Net Assets, end of period (000's Omitted).............. $8,090 $8,409 $8,272 $2,525
(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>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
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 period indicated. This
information has been derived from the Fund's financial statements.
Class B Shares
--------------------------------------------
Year Ended July 31,
--------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994(1)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of period................... $13.07 $13.01 $12.95 $12.50
---- ---- ---- ----
Investment Operations:
Investment income-net.................................. .53 .57 .71 .16
Net realized and unrealized gain (loss)
on investments....................................... .52 .09 .06 .45
---- ---- ---- ----
Total from Investment Operations....................... 1.05 .66 .77 .61
---- ---- ---- ----
Distributions:
Dividends from investment income-net................... (.53) (.57) (.71) (.16)
Dividends from net realized gain on investments........ (.06) (.03) - -
---- ---- ---- ----
Total Distributions.................................... (.59) (.60) (.71) (.16)
---- ---- ---- ----
Net asset value, end of period......................... $13.53 $13.07 $13.01 $12.95
==== ==== ==== ====
TOTAL INVESTMENT RETURN (2)................................ 8.28% 5.09% 6.24% 4.94%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................ 1.75% 1.68% .59% .50%(4)
Ratio of net investment income
to average net assets................................ 4.03% 4.28% 5.51% 4.90%(4)
Decrease reflected in above expense ratios
due to undertakings by the Manager................... .14% .13% 1.27% 2.50%(4)
Portfolio Turnover Rate................................ 44.50% 29.73% 9.17% -
Net Assets, end of period (000's Omitted).............. $10,219 $10,860 $9,739 $3,343
(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>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
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 period indicated. This
information has been derived from the Fund's financial statements.
Class C Shares
------------------------------
Year Ended July 31,
------------------------------
PER SHARE DATA: 1997 1996(1)
---- ----
<S> <C> <C>
Net asset value, beginning of period.................................... $13.07 $13.53
---- ----
Investment Operations:
Investment income-net................................................... .50 .34
Net realized and unrealized gain (loss)
on investments........................................................ .53 (.43)
---- ----
Total from Investment Operations........................................ 1.03 (.09)
---- ----
Distributions:
Dividends from investment income-net.................................... (.50) (.34)
Dividends from net realized gain on investments......................... (.06) (.03)
---- ----
Total Distributions..................................................... (.56) (.37)
---- ----
Net asset value, end of period.......................................... $13.54 $13.07
==== ====
TOTAL INVESTMENT RETURN (2)................................................. 8.07% (.94%)(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................. 2.00% 2.08%(3)
Ratio of net investment income
to average net assets................................................. 3.70% 3.84%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager.................................... .11% 1.17%(3)
Portfolio Turnover Rate................................................. 44.50% 29.73%
Net Assets, end of period (000's Omitted)............................... $1 $1
(1) From December 4, 1995 (commencement of initial offering) to July 31, 1996.
(2) Exclusive of sales load.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus 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. 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.
On January 8, 1997, the Fund's Trustees approved a change of the Fund's
name, effective March 31, 1997, from Premier Insured Municipal Bond Fund,
National Series to Dreyfus Premier Insured Municipal Bond Fund.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares. The Fund is authorized to issue an unlimited number of
$.001 par value shares in the following classes of shares: Class A, Class B
and Class C. 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
("CDSC") on Class B share redemptions made within six years of purchase (five
years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed 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's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (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.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code,
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption facility ("Facility") to be utilized for temporary or emergency
purposes, including the financing of redemptions. In connection therewith,
the Fund has agreed to pay commitment fees on its pro rata portion of the
Facility. Interest is charged to the Fund at rates based on prevailing market
rates in effect at the time of borrowings. For the period ended July 31,
1997, the Fund did not borrow under the Facility.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .55 of 1% of the value of the Fund's
average daily net assets and is payable monthly. The Manager has undertaken
from August 1, 1996 through July 31, 1997, to reduce the management fees paid
by, or reimburse such excess expenses of the Fund, to the extent that the
Fund's aggregate annual expenses (excluding 12b-1 distribution plan fees,
taxes, brokerage, interest on borrowings, commitment fees and extraordinary
expenses) exceed an annual rate of 1.25% of the value of the Fund's average
daily net assets. The reduction in management fee, pursuant to the
undertaking, amounted to $26,374 during the period ended July 31, 1997.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Fund pays the Distributor for distributing the Fund's 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, 1997,
$53,327 was charged to the Fund for the Class B shares and $8 was charged to
the Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund 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 Fund 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, 1997,
$20,358, $26,663 and $3 were charged to Class A, Class B and C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
The Fund 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 Fund. Such
compensation amounted to $9,057 during the period ended July 31, 1997.
(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 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended July 31, 1997
amounted to $7,757,535 and $9,520,672, respectively.
At July 31, 1997, 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).
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus Premier Insured Municipal Bond Fund, including the statement of
investments, as of July 31, 1997, 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 and financial highlights. Our procedures included
confirmation of securities owned as of July 31, 1997 by correspondence with
the custodian. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Premier Insured Municipal Bond Fund at July 31, 1997, 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, 1997
DREYFUS PREMIER INSURED MUNICIPAL BOND FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended July 31, 1997:
-all the dividends paid from investment income-net are "exempt-interest
dividends" (not generally subject to regular Federal income tax), and
-the Fund hereby designates $.0016 per share as a long-term capital gain
distribution of the $.0620 per share paid on December 5, 1996.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
DREYFUS PREMIER INSURED MUNICIPAL
BOND FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 128/376AR977
Annual Report
Dreyfus Premier
Insured Municipal
Bond Fund
July 31, 1997
Registration Mark
[Dreyfus lion/2hres logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER INSURED MUNICIPAL BOND FUND CLASS A SHARES AND CLASS
B SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
LEHMAN PREMIER PREMIER
BROTHERS INSURED INSURED
PERIOD MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND FUND BOND FUND
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 11,717
7/31/97 12,943 12,316 12,387
*Source: Lehman Brothers
