UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: | 811-03264 | |
Exact name of registrant as specified in charter: | Dryden Government Securities Trust | |
Address of principal executive offices: | Gateway Center 3, | |
100 Mulberry Street, | ||
Newark, New Jersey 07102 | ||
Name and address of agent for service: | William V. Healey | |
Gateway Center 3, | ||
100 Mulberry Street, | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 973-802-2991 | |
Date of fiscal year end: | 11/30/2004 | |
Date of reporting period: | 5/31/2004 |
Item 1 – | Reports to Stockholders – [ INSERT REPORT ] |
Dryden Government Securities Trust/
Money Market Series &
U.S. Treasury Money Market Series
MAY 31, 2004 | SEMIANNUAL REPORT |
FUND TYPE
Money market
OBJECTIVES
Money Market Series: High current income, preservation of capital, and maintenance of liquidity.
U.S. Treasury Money Market Series: High current income consistent with the preservation of principal and liquidity.
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
The views expressed in this report and information about the Trust’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
JennisonDryden is a registered trademark of The Prudential Insurance Company of America.
Dear Shareholder,
July 16, 2004
The U.S. stock market slowed in 2004 following its particularly strong performance in 2003. Some investors still seem to be watching developments from the sidelines, preferring to remain cautious. This is understandable, considering the unsettled global political climate and the potential for rising short-term interest rates in the United States. Having a broadly diversified asset allocation strategy can help protect you against inflation and increase your chances of participating in economic growth. As part of such a strategy, holding a cash reserve in a money market fund can help you meet short-term obligations or deal with emergencies without having to liquidate longer-term assets at what may be an inappropriate time.
As always, we believe you are best served by a diversified asset allocation strategy developed in consultation with a financial professional who knows you and who understands your reasons for investing, the time you have to reach your goals, and the amount of risk you are comfortable assuming. JennisonDryden mutual funds offer a wide range of investment choices, and your financial professional can help you choose the appropriate funds to implement your strategy.
Whether you are investing for your retirement, your children’s education, or some other purpose, JennisonDryden mutual funds offer the experience, resources, and professional discipline of three leading asset managers that can make a difference for you. JennisonDryden equity funds are advised by Jennison Associates LLC and/or Quantitative Management Associates LLC (QMA). Prudential Investment Management, Inc. (PIM) advises the JennisonDryden fixed income and money market funds. Jennison Associates, QMA, and PIM are Registered Investment Advisors and Prudential Financial companies.
Sincerely,
Judy A. Rice, President
Dryden Government Securities Trust/Money Market Series
Dryden Government Securities Trust/U.S. Treasury Money Market Series
Your Trust’s Performance
Series objectives—Money Market Series
The investment objectives of the Money Market Series (the Series) are high current income, preservation of capital, and maintenance of liquidity. There can be no assurance that the Money Market Series will achieve its investment objectives.
Yields will fluctuate from time to time, and past performance does not guarantee future results. Current performance may be lower or higher than the performance data quoted. An investment in the Series is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Series seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in it.
Fund Facts as of 5/31/04 | |||||||||||
7-Day Current Yield | Net Asset Value (NAV) | Weighted Avg. Maturity (WAM) | Net Assets (Millions) | ||||||||
Class A | 0.16 | % | $ | 1.00 | 52 Days | $ | 402.8 | ||||
Class Z | 0.29 | % | $ | 1.00 | 52 Days | $ | 18.5 | ||||
iMoneyNet, Inc. Government & Agency Retail Avg.* | 0.36 | % | N/A | 50 Days | N/A |
*iMoneyNet, Inc. reports a seven-day current yield, NAV, and WAM on Tuesdays. This is the data of all funds in the iMoneyNet, Inc. Government & Agency Retail Average as of May 25, 2004, the closest date to the end of our reporting period.
Series objective—U.S. Treasury Money Market Series
The investment objective of the U.S. Treasury Money Market Series (the Series) is high current income consistent with the preservation of principal and liquidity. There can be no assurance that the U.S. Treasury Money Market Series will achieve its investment objective.
Yields will fluctuate from time to time, and past performance does not guarantee future results. Current performance may be lower or higher than the performance data quoted. An investment in the Series is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Series seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in it.
Fund Facts as of 5/31/04 | |||||||||||
7-Day Current Yield | Net Asset Value (NAV) | Weighted Avg. Maturity (WAM) | Net Assets (Millions) | ||||||||
Class A | 0.29 | % | $ | 1.00 | 50 Days | $ | 295.5 | ||||
Class Z | 0.42 | % | $ | 1.00 | 50 Days | $ | 6.7 | ||||
iMoneyNet, Inc. Treasury Retail Avg.* | 0.35 | % | N/A | 63 Days | N/A |
*iMoneyNet, Inc. reports a seven-day current yield, NAV, and WAM on Tuesdays. This is the data of all funds in the iMoneyNet, Inc. Treasury Retail Average as of May 25, 2004, the closest date to the end of our reporting period.
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Financial Statements
MAY 31, 2004 | SEMIANNUAL REPORT |
Dryden Government Securities Trust
Money Market Series & U.S. Treasury Money Market Series
Portfolio of Investments
as of May 31, 2004 (Unaudited)
Money Market Series
Principal Amount (000) | Description | Value (Note 1) | |||
Federal Farm Credit Bank 0.6% | |||||
$ 2,500 | 1.70%, 6/30/04 | $ | 2,501,272 | ||
Federal Home Loan Bank 28.5% | |||||
33,000 | 1.00%, 7/14/04, F.R.N. | 32,998,275 | |||
30,000 | 0.996%, 11/24/04, F.R.N. | 29,996,518 | |||
20,000 | 1.05%, 4/7/05, F.R.N. | 19,998,298 | |||
295 | 6.565%, 6/18/04 | 295,748 | |||
20,000 | Zero Coupon, 8/4/04 | 19,960,889 | |||
7,000 | 2.25%, 8/13/04 | 7,015,521 | |||
10,000 | 1.40%, 4/1/05 | 10,000,000 | |||
120,265,249 | |||||
Federal Home Loan Mortgage Corporation 3.0% | |||||
3,500 | 6.25%, 7/15/04 | 3,521,777 | |||
9,000 | 3.25%, 11/15/04 | 9,087,123 | |||
12,608,900 | |||||
Federal National Mortgage Association 36.4% | |||||
6,340 | 1.003%, 9/10/04, F.R.N. | 6,339,515 | |||
17,500 | 1.00%, 10/28/04, F.R.N. | 17,497,107 | |||
25,000 | 1.04%, 2/18/05, F.R.N. | 24,997,301 | |||
35,000 | 1.20%, 2/18/05, F.R.N. | 35,000,000 | |||
22,000 | Zero Coupon, 6/1/04 | 22,000,000 | |||
28,000 | Zero Coupon, 7/1/04 | 27,975,966 | |||
10,000 | 6.50%, 8/15/04 | 10,107,603 | |||
9,500 | 1.40%, 3/29/05 | 9,500,000 | |||
153,417,492 | |||||
Repurchase Agreements(a) 38.4% | |||||
40,992 | Bank of America, | 40,992,000 | |||
13,901 | Credit Suisse First Boston Corp., | 13,901,000 |
See Notes to Financial Statements.
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Principal Amount (000) | Description | Value (Note 1) | ||||
$ 2,700 | Credit Suisse First Boston Corp., | $ | 2,700,000 | |||
14,012 | Credit Suisse First Boston Corp., | 14,012,000 | ||||
20,000 | Deutsche Bank Securities, Inc., | 20,000,000 | ||||
28,080 | Joint Repurchase Agreement (Note 4), | 28,080,000 | ||||
42,000 | UBS, 1.03%, dated 5/28/04, due 6/4/04 in the amount of | 42,000,000 | ||||
161,685,000 | ||||||
Total Investments 106.9% | 450,477,913 | |||||
Liabilities in excess of other assets (6.9%) | (29,160,577 | ) | ||||
Net Assets 100% | $ | 421,317,336 | ||||
F.R.N.—Floating Rate Note. The interest rate reflected is the rate in effect at May 31, 2004.
(a) | Repurchase Agreements are collateralized by U.S. Treasury or Federal agency obligations. |
(b) | The cost of securities for federal income tax purposes is substantially the same as for financial reporting purposes. |
See Notes to Financial Statements.
Dryden Government Securities Trust | 5 |
Portfolio of Investments
as of May 31, 2004 (Unaudited)
U.S. Treasury Money Market Series
Principal Amount(000) | Description | Value (Note 1) | |||
United States Treasury Bills 71.9% | |||||
$12,163 | 0.91%, 6/3/04 | $ | 12,162,422 | ||
50,000 | 0.92%, 6/14/04 | 49,983,479 | |||
25,000 | 0.91%, 6/17/04 | 24,990,000 | |||
57,545 | 0.92%, 6/24/04 | 57,511,281 | |||
44,940 | 0.89%, 7/1/04 | 44,904,901 | |||
17,813 | 1.05%, 8/26/04 | 17,770,915 | |||
10,000 | 1.10%, 9/9/04 | 9,972,917 | |||
217,295,915 | |||||
United States Treasury Notes 25.6% | |||||
34,092 | 2.875%, 6/30/04 | 34,141,347 | |||
14,465 | 2.125%, 8/31/04 | 14,494,438 | |||
3,350 | 1.875%, 9/30/04 | 3,359,485 | |||
14,910 | 5.875%, 11/15/04 | 15,231,849 | |||
10,000 | 1.625%, 3/31/05 | 10,039,958 | |||
77,267,077 | |||||
Total Investments 97.5% | 294,562,992 | ||||
Other assets in excess of liabilities 2.5% | 7,594,479 | ||||
Net Assets 100% | $ | 302,157,471 | |||
(a) | The cost of securities for federal income tax purposes is substantially the same as for financial reporting purposes. |
See Notes to Financial Statements.
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Statement of Assets and Liabilities
as of May 31, 2004 (Unaudited)
Assets | | Money Market Series | | U.S. Treasury Money Market Series | ||
Investments, at amortized cost | $ | 288,792,913 | $ | 294,562,992 | ||
Repurchase Agreements | 161,685,000 | — | ||||
Receivable for investments sold | — | 51,740,861 | ||||
Interest receivable | 667,240 | 1,002,855 | ||||
Receivable for Series shares sold | 558,779 | 7,494,208 | ||||
Prepaid expenses and other assets | 9,136 | 6,822 | ||||
Total assets | 451,713,068 | 354,807,738 | ||||
Liabilities | ||||||
Payable for investments purchased | 27,975,967 | 49,983,479 | ||||
Payable for Series shares reacquired | 1,659,562 | 2,280,603 | ||||
Accrued expenses and other liabilities | 366,876 | 219,889 | ||||
Payable to custodian | 179,424 | 2,347 | ||||
Management fee payable | 144,954 | 100,939 | ||||
Distribution fee payable | 43,328 | 30,820 | ||||
Dividends payable | 15,422 | 20,225 | ||||
Deferred trustees’ fees | 10,199 | 11,965 | ||||
Total liabilities | 30,395,732 | 52,650,267 | ||||
Net Assets | $ | 421,317,336 | $ | 302,157,471 | ||
Net assets were comprised of: | ||||||
Shares of beneficial interest, at par ($.01 per share) | $ | 4,213,173 | $ | 3,021,575 | ||
Paid-in capital in excess of par | 417,104,163 | 299,135,896 | ||||
Net assets, May 31, 2004 | $ | 421,317,336 | $ | 302,157,471 | ||
Class A | ||||||
Net asset value, offering price and redemption price per share ($402,781,313 ÷ 402,781,313 shares of beneficial interest issued and outstanding) | $ | 1.00 | ||||
Net asset value, offering price and redemption price per share ($295,454,079 ÷ 295,454,079 shares of beneficial interest issued and outstanding) | $ | 1.00 | ||||
Class Z | ||||||
Net asset value, offering price and redemption price per share ($18,536,023 ÷ 18,536,023 shares of beneficial interest issued and outstanding) | $ | 1.00 | ||||
Net asset value, offering price and redemption price per share ($6,703,392 ÷ 6,703,392 shares of beneficial interest issued and outstanding) | $ | 1.00 | ||||
See Notes to Financial Statements.
Dryden Government Securities Trust | 7 |
Statement of Operations
Six Months Ended May 31, 2004 (Unaudited)
Net Investment Income | | Money Market Series | | U.S. Treasury Money Market Series | ||
Interest | $ | 2,595,830 | $ | 1,692,041 | ||
Expenses | ||||||
Management fee | 954,735 | 693,936 | ||||
Distribution fee—Class A | 285,907 | 212,501 | ||||
Transfer agent’s fees and expenses | 621,000 | 82,000 | ||||
Reports to shareholders | 77,000 | 40,000 | ||||
Custodian’s fees and expenses | 54,000 | 46,000 | ||||
Legal fees and expenses | 49,000 | 41,000 | ||||
Registration fees | 43,000 | 34,000 | ||||
Audit fee | 18,000 | 9,000 | ||||
Trustees’ fee | 10,000 | 14,000 | ||||
Insurance expenses | 5,000 | 4,000 | ||||
Miscellaneous | 9,324 | 3,087 | ||||
Total expenses | 2,126,966 | 1,179,524 | ||||
Net investment income | 468,864 | 512,517 | ||||
Realized Gain on Investments | ||||||
Net realized gain on investment transactions | 13,339 | 23,768 | ||||
Net Increase In Net Assets Resulting From Operations | $ | 482,203 | $ | 536,285 | ||
See Notes to Financial Statements.
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Statement of Changes in Net Assets (Unaudited)
Money Market Series
Six Months Ended May 31, 2004 | Year Ended November 30, 2003 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 468,864 | $ | 2,782,767 | ||||
Net realized gain on investment transactions | 13,339 | 17,514 | ||||||
Net increase in net assets resulting from operations | 482,203 | 2,800,281 | ||||||
Dividends and distributions (Note 1) | ||||||||
Class A | (450,331 | ) | (2,675,669 | ) | ||||
Class Z | (31,872 | ) | (124,612 | ) | ||||
(482,203 | ) | (2,800,281 | ) | |||||
Series share transactions(a) (Note 5) | ||||||||
Net proceeds from shares subscribed | 389,855,392 | 855,912,790 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 471,168 | 2,790,554 | ||||||
Cost of shares reacquired | (496,301,629 | ) | (961,997,498 | ) | ||||
Net decrease in net assets from Series shares transactions | (105,975,069 | ) | (103,294,154 | ) | ||||
Total decrease | (105,975,069 | ) | (103,294,154 | ) | ||||
Net Assets | ||||||||
Beginning of period | 527,292,405 | 630,586,559 | ||||||
End of period | $ | 421,317,336 | $ | 527,292,405 | ||||
(a) | At $1.00 per share for the Money Market Series. |
See Notes to Financial Statements.
Dryden Government Securities Trust | 9 |
Statement of Changes in Net Assets (Unaudited)
U.S. Treasury Money Market Series
Six Months Ended May 31, 2004 | Year Ended November 30, 2003 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 512,517 | $ | 2,891,611 | ||||
Net realized gain on investment transactions | 23,768 | 95,657 | ||||||
Net increase in net assets resulting from operations | 536,285 | 2,987,268 | ||||||
Dividends and distributions (Note 1) | ||||||||
Class A | (521,284 | ) | (2,947,679 | ) | ||||
Class Z | (15,001 | ) | (39,589 | ) | ||||
(536,285 | ) | (2,987,268 | ) | |||||
Series share transactions(a) (Note 5) | ||||||||
Net proceeds from shares subscribed | 992,831,456 | 4,022,332,273 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 495,067 | 2,634,240 | ||||||
Cost of shares reacquired | (1,040,491,902 | ) | (4,062,912,149 | ) | ||||
Net decrease in net assets from Series shares transactions | (47,165,379 | ) | (37,945,636 | ) | ||||
Total decrease | (47,165,379 | ) | (37,945,636 | ) | ||||
Net Assets | ||||||||
Beginning of period | 349,322,850 | 387,268,486 | ||||||
End of period | $ | 302,157,471 | $ | 349,322,850 | ||||
(a) | At $1.00 per share for the U.S. Treasury Money Market Series. |
See Notes to Financial Statements.
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Notes to Financial Statements
(Unaudited)
Dryden Government Securities Trust (the “Fund”), is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund consists of two series: the Money Market Series and the U.S. Treasury Money Market Series (each a “Series”); the monies of each series are invested in separate, independently managed portfolios. The Money Market Series seeks high current income, preservation of capital and maintenance of liquidity by investing primarily in a diversified portfolio of short-term money market instruments issued or guaranteed by the U.S. Government or its agencies or instrumentalities that mature in 13 months or less. The U.S. Treasury Money Market Series seeks high current income consistent with the preservation of principal and liquidity by investing exclusively in U.S. Treasury obligations that mature in 13 months or less.
Note 1. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and each Series in the preparation of its financial statements.
Securities Valuations: Portfolio securities of the Fund are valued at amortized cost, which approximates market value. The amortized cost method of valuation involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. If the amortized cost method is determined not to represent fair value, the fair value shall be determined by or under the direction of the Board of Trustees.
Repurchase Agreements: In connection with transactions in repurchase agreements with U.S. financial institutions, it is the Fund’s policy that its custodian or designated subcustodians, as the case may be under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase agreement exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.
Securities Transactions and Investment Income: Securities transactions are recorded on the trade date. Realized gains and losses on sales of securities are calculated on
Dryden Government Securities Trust | 11 |
Notes to Financial Statements
Cont’d
the identified cost basis. The Fund amortizes premiums and accretes discounts on purchases of portfolio securities as adjustments to interest income. Interest income is recorded on the accrual basis. Expenses are recorded on the accrual basis and are allocated to the respective Series on the basis of relative net assets except for Series specific expenses which are allocated at a Series or class level.
Dividends and Distributions: The Series declare daily dividends from net investment income and net realized short-term capital gains. Payment of dividends is made monthly. Income distributions and realized capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Federal Income Taxes: For federal income tax purposes, each Series of the Fund is treated as a separate taxable entity. It is each Series’ policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). PIM furnishes investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly based on the average daily net assets of each Series. With respect to the Money Market Series, the management fee is payable as follows: .40 of 1% of average daily net assets up to $1
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billion, .375 of 1% of the average daily net assets between $1 billion and $1.5 billion and .35 of 1% in excess of $1.5 billion. With respect to the U.S. Treasury Money Market Series, the management fee is payable at an annual rate of .40 of 1% of the average daily net assets of the Series.
Each Series has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A and Class Z shares of the Fund. Each Series compensates PIMS for distributing and servicing the Class A shares, pursuant to a plan of distribution (the “Class A Plan”), regardless of expenses actually incurred by PIMS. The distribution fees for Class A shares are accrued daily and payable monthly. The distributor pays various broker-dealers for account servicing fees and for the expenses incurred by such broker-dealers. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Fund.
Pursuant to the Class A Plan, the Money Market Series and the U.S. Treasury Money Market Series compensate PIMS at an annual rate of .125 of 1% of each Series’ Class A average daily net assets.
PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. During the six months ended May 31, 2004, the Fund incurred fees of approximately $337,400 and $73,200, respectively, for the Money Market Series and U.S. Treasury Money Market Series. As of May 31, 2004, approximately $52,400 and $11,400 of such fees were due to PMFS, respectively, for the Money Market Series and U.S. Treasury Money Market Series. Transfer agent fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates.
Note 4. Joint Repurchase Agreement Account
The Money Market Series, along with other affiliated registered investment companies, transfers uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S. Treasury or federal agency obligations. As of May 31, 2004, the Money Market Series had a 28.9% undivided interest in the joint account. The undivided interest for the Money Market Series represents $28,080,000 in principal
Dryden Government Securities Trust | 13 |
Notes to Financial Statements
Cont’d
amount. As of such date, each repurchase agreement in the joint account and the collateral therefore were as follows:
Greenwich Capital Markets, Inc., 1.05%, dated 05/28/04, in the principal amount of $32,413,000, repurchase price $32,416,782, due 06/01/04. The value of the collateral including accrued interest was $33,061,462.
JP Morgan, 1.05%, dated 05/28/04, in the principal amount of $32,414,000, repurchase price $32,417,782 due 06/01/04. The value of the collateral including accrued interest was $33,063,561.
Credit Suisse First Boston Corp., 1.04%, dated 05/28/04, in the principal amount of $32,413,000, repurchase price $32,416,746, due 06/01/04. The value of the collateral including accrued interest was $33,063,762.
Note 5. Capital
The Fund offers Class A and Class Z shares. Neither Class A nor Class Z shares are subject to any sales or redemption charge. Class Z shares are offered exclusively for sale to a limited group of investors. The Money Market Series may also offer Class S shares. There are no Class S shares currently issued and outstanding. Each Series has authorized an unlimited number of shares of beneficial interest at $.01 par value.
Transactions in shares of beneficial interest at $1 net asset value per share, for the Money Market Series were as follows:
Class A | Six Months Ended May 31, 2004 | Year Ended November 30, 2003 | ||||
Shares sold | 387,728,255 | 844,459,956 | ||||
Shares issued in reinvestment of dividends and distributions | 438,650 | 2,662,762 | ||||
Shares reacquired | (490,191,745 | ) | (949,900,975 | ) | ||
Net increase (decrease) in shares outstanding | (102,024,840 | ) | (102,778,257 | ) | ||
Class Z | ||||||
Shares sold | 2,127,137 | 11,452,834 | ||||
Shares issued in reinvestment of dividends and distributions | 32,518 | 127,792 | ||||
Shares reacquired | (6,109,884 | ) | (12,096,523 | ) | ||
Net increase (decrease) in shares outstanding | (3,950,229 | ) | (515,897 | ) | ||
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Transactions in shares of beneficial interest at $1 net asset value per share, for the U.S. Treasury Money Market Series were as follows:
Class A | Six Months Ended May 31, 2004 | Year Ended November 30, 2003 | ||||
Shares sold | 990,383,644 | 4,017,929,839 | ||||
Shares issued in reinvestment of dividends and distributions | 480,267 | 2,594,099 | ||||
Shares reacquired | (1,038,886,375 | ) | (4,058,788,613 | ) | ||
Net increase (decrease) in shares outstanding | (48,022,464 | ) | (38,264,675 | ) | ||
Class Z | ||||||
Shares sold | 2,447,812 | 4,402,434 | ||||
Shares issued in reinvestment of dividends and distributions | 14,800 | 40,141 | ||||
Shares reacquired | (1,605,527 | ) | (4,123,536 | ) | ||
Net increase (decrease) in shares outstanding | 857,085 | 319,039 | ||||
Note 6. Change in Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP was previously the independent registered public accounting firm for the Fund. The decision to change the independent registered public accounting firm was approved by the Audit Committee and by the Board of Trustees in a meeting held on September 2, 2003, resulting in KPMG LLP’s appointment as independent auditors of the Fund.
The reports on the financial statements of the Series audited by PricewaterhouseCoopers LLP through the year ended November 30, 2003 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements between the Series and PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.
Note 7. Reorganization
The U.S. Treasury Series historically has served as a sweep vehicle of an affiliated broker/dealer. During fiscal 2003 the U.S. Treasury Series was notified that it would no longer be utilized in such a manner. Consequently, U.S. Treasury Series assets will likely decline over time.
Dryden Government Securities Trust | 15 |
Notes to Financial Statements
Cont’d
On November 18, 2003, the Board of Trustees of the Fund approved an Agreement and Plan of Reorganization which provided for the transfer of all assets and assumption of all liabilities of Class A and Z shares of the U.S. Treasury Money Market Series for Class A and Z shares of the Money Market Series, respectively.
At the close of business on November 19, 2003, the U.S. Treasury Series has been closed to new accounts pending the merger with the Money Market Series. Shareholders of the U.S. Treasury Series may redeem shares through the effective time of the merger.
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Financial Highlights
MAY 31, 2004 | SEMIANNUAL REPORT |
Dryden Government Securities Trust
Money Market Series & U.S. Treasury Money Market Series
Financial Highlights
(Unaudited)
Money Market Series
Class A | ||||
Six Months Ended May 31, 2004 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning Of Period | $ | 1.000 | ||
Net investment income and net realized gain on investment transactions | 0.001 | |||
Dividends and distributions | (0.001 | ) | ||
Net asset value, end of period | $ | 1.000 | ||
Total Return(a): | 0.10 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 402,781 | ||
Average net assets (000) | $ | 457,451 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | 0.90 | %(b) | ||
Expenses, excluding distribution and service (12b-1) fees | 0.77 | %(b) | ||
Net investment income | 0.20 | %(b) |
(a) | Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return for period less than one full year is not annualized. |
(b) | Annualized. |
See Notes to Financial Statements.
18 | Visit our website at www.jennisondryden.com |
Class A | ||||||||||||||||||
Year Ended November 30, | ||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.005 | 0.012 | 0.039 | 0.053 | 0.042 | ||||||||||||||
(0.005 | ) | (0.012 | ) | (0.039 | ) | (0.053 | ) | (0.042 | ) | |||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.47 | % | 1.19 | % | 4.04 | % | 5.43 | % | 4.31 | % | |||||||||
$ | 504,806 | $ | 607,585 | $ | 608,038 | $ | 558,307 | $ | 576,868 | |||||||||
$ | 571,964 | $ | 612,109 | $ | 589,136 | $ | 559,103 | $ | 594,266 | |||||||||
0.87 | % | 0.77 | % | 0.83 | % | 0.91 | % | 0.90 | % | |||||||||
0.74 | % | 0.64 | % | 0.70 | % | 0.79 | % | 0.77 | % | |||||||||
0.46 | % | 1.14 | % | 3.82 | % | 5.35 | % | 4.23 | % |
See Notes to Financial Statements.
Dryden Government Securities Trust | 19 |
Financial Highlights
(Unaudited) Cont’d
Money Market Series
Class Z | ||||
Six Months Ended May 31, 2004 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning Of Period | $ | 1.000 | ||
Net investment income and net realized gain on investment transactions | 0.002 | |||
Dividends and distributions | (0.002 | ) | ||
Net asset value, end of period | $ | 1.000 | ||
Total Return(a): | 0.16 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 18,536 | ||
Average net assets (000) | $ | 19,916 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | 0.77 | %(b) | ||
Expenses, excluding distribution and service (12b-1) fees | 0.77 | %(b) | ||
Net investment income | 0.32 | %(b) |
(a) | Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return for period less than one full year is not annualized. |
(b) | Annualized |
See Notes to Financial Statements.
20 | Visit our website at www.jennisondryden.com |
Class Z | ||||||||||||||||||
Year Ended November 30, | ||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.006 | 0.013 | 0.040 | 0.054 | 0.044 | ||||||||||||||
(0.006 | ) | (0.013 | ) | (0.040 | ) | (0.054 | ) | (0.044 | ) | |||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.60 | % | 1.32 | % | 4.16 | % | 5.56 | % | 4.44 | % | |||||||||
$ | 22,486 | $ | 23,002 | $ | 31,188 | $ | 38,534 | $ | 41,546 | |||||||||
$ | 22,010 | $ | 27,790 | $ | 37,641 | $ | 34,243 | $ | 32,984 | |||||||||
0.74 | % | 0.64 | % | 0.70 | % | 0.79 | % | 0.77 | % | |||||||||
0.74 | % | 0.64 | % | 0.70 | % | 0.79 | % | 0.77 | % | |||||||||
0.56 | % | 1.27 | % | 4.03 | % | 5.48 | % | 4.38 | % |
See Notes to Financial Statements.
Dryden Government Securities Trust | 21 |
Financial Highlights
(Unaudited)
U.S. Treasury Money Market Series
Class A | ||||
Six Months Ended May 31, 2004 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Begining Of Period | $ | 1.000 | ||
Net investment income and net realized gain on investment transactions | 0.002 | |||
Dividends and distributions | (0.002 | ) | ||
Net asset value, end of period | $ | 1.000 | ||
Total Return(a): | 0.15 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 295,454 | ||
Average net assets (000) | $ | 340,001 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | 0.68 | %(c) | ||
Expenses, excluding distribution and service (12b-1) fees | 0.56 | %(c) | ||
Net investment income | 0.29 | %(c) |
(a) | Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return for periods less than one full year are not annualized. |
(b) | Reflects overall Series ratio for investment income and non-class specific expenses. |
(c) | Annualized. |
See Notes to Financial Statements.
22 | Visit our website at www.jennisondryden.com |
Class A | ||||||||||||||||||
Year Ended November 30, | ||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.006 | 0.013 | 0.038 | 0.052 | 0.041 | ||||||||||||||
(0.006 | ) | (0.013 | ) | (0.038 | ) | (0.052 | ) | (0.041 | ) | |||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.55 | % | 1.32 | % | 4.01 | % | 5.27 | % | 4.19 | % | |||||||||
$ | 343,477 | $ | 381,741 | $ | 502,362 | $ | 365,154 | $ | 321,641 | |||||||||
$ | 507,223 | $ | 492,503 | $ | 444,533 | $ | 396,454 | $ | 383,772 | |||||||||
0.63 | % | 0.63 | % | 0.62 | %(b) | 0.61 | % | 0.63 | % | |||||||||
0.50 | % | 0.50 | % | 0.49 | %(b) | 0.48 | % | 0.51 | % | |||||||||
0.56 | % | 1.25 | % | 3.92 | %(b) | 5.09 | % | 4.08 | % |
See Notes to Financial Statements.
Dryden Government Securities Trust | 23 |
Financial Highlights
(Unaudited) Cont’d
U.S. Treasury Money Market Series
Class Z | ||||
Six Months Ended May 31, 2004 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Begining Of Period | $ | 1.000 | ||
Net investment income and net realized gain on investment transactions | 0.002 | |||
Dividends and distributions | (0.002 | ) | ||
Net asset value, end of period | $ | 1.000 | ||
Total Return(a): | 0.21 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 6,703 | ||
Average net assets (000) | $ | 6,967 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | 0.56 | %(c) | ||
Expenses, excluding distribution and service (12b-1) fees | 0.56 | %(c) | ||
Net investment income | 0.42 | %(c) |
(a) | Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total return for periods less than one full year are not annualized. |
(b) | Reflects overall Series ratio for investment income and non-class specific expenses. |
(c) | Annualized. |
See Notes to Financial Statements.
24 | Visit our website at www.jennisondryden.com |
Class Z | ||||||||||||||||||
Year Ended November 30, | ||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.007 | 0.014 | 0.040 | 0.053 | 0.043 | ||||||||||||||
(0.007 | ) | (0.014 | ) | (0.040 | ) | (0.053 | ) | (0.043 | ) | |||||||||
$ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||
0.68 | % | 1.45 | % | 4.14 | % | 5.40 | % | 4.37 | % | |||||||||
$ | 5,846 | $ | 5,527 | $ | 6,746 | $ | 5,510 | $ | 2,013 | |||||||||
$ | 5,995 | $ | 5,514 | $ | 5,870 | $ | 2,191 | $ | 1,942 | |||||||||
0.50 | % | 0.50 | % | 0.49 | %(b) | 0.48 | % | 0.51 | % | |||||||||
0.50 | % | 0.50 | % | 0.49 | %(b) | 0.48 | % | 0.51 | % | |||||||||
0.64 | % | 1.37 | % | 4.04 | %(b) | 5.31 | % | 4.19 | % |
See Notes to Financial Statements.
Dryden Government Securities Trust | 25 |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.jennisondryden.com |
PROXY VOTING |
The Board of Directors of the Trust has delegated to the Trust’s investment adviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Trust. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the SEC’s website at http://www.sec.gov. |
TRUSTEES |
Delayne Dedrick Gold • Robert F. Gunia • Robert E. La Blanc • Thomas T. Mooney • Richard A. Redeker • Judy A. Rice • Robin B. Smith • Louis A. Weil III |
OFFICERS |
Judy A. Rice, President • Robert F. Gunia, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • William V. Healey, Chief Legal Officer • Jonathan D. Shain, Assistant Secretary • Deborah A. Docs, Secretary • Maryanne Ryan, Anti-Money Laundering Compliance Officer •Lee D. Augsberger, Chief Compliance Officer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
INVESTMENT ADVISER | Prudential Investment Management, Inc. | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 14th Floor 100 Mulberry Street Newark, NJ 07102 | ||
CUSTODIAN | State Street Bank and Trust Company | One Heritage Drive North Quincy, MA 02171 | ||
TRANSFER AGENT | Prudential Mutual Fund Services LLC | PO Box 8098 Philadelphia, PA 19101 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 757 Third Avenue 10th Floor New York, NY 10017 | ||
FUND COUNSEL | Shearman & Sterling LLP | 599 Lexington Avenue New York, NY 10022 |
Dryden Government Securities Trust/Money Market Series | ||||||||
Share Class | A | Z | ||||||
NASDAQ | PBGXX | PGZXX | ||||||
CUSIP | 262434301 | 262434400 | ||||||
Dryden Government Securities Trust/U.S. Treasury Money Market Series | ||||||||
Share Class | A | Z | ||||||
NASDAQ | PUSXX | PTZXX | ||||||
CUSIP | 262434608 | 262434707 | ||||||
An investor should consider the investment objective, risks, and charges and expenses of a Series carefully before investing. The prospectuses for the Series contains this and other information about the Series. An investor may obtain a prospectus by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The prospectus should be read carefully before investing. |
The views expressed in this report and information about the Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter. The accompanying financial statements as of May 31, 2004 were not audited, and accordingly, no auditor’s opinion is expressed on them. |
Quantitative Management Associates and Prudential Fixed Income are business units of Prudential Investment Management, Inc. (PIM), and Jennison Associates LLC is a subsidiary of PIM. Jennison Associates LLC and PIM are registered investment advisers. PIM is a subsidiary of Prudential Financial, Inc. |
E-DELIVERY To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
Dryden Government Securities Trust/Money Market Series | ||||||||
Share Class | A | Z | ||||||
NASDAQ | PBGXX | PGZXX | ||||||
CUSIP | 262434301 | 262434400 | ||||||
Dryden Government Securities Trust/U.S. Treasury Money Market Series | ||||||||
Share Class | A | Z | ||||||
NASDAQ | PUSXX | PTZXX | ||||||
CUSIP | 262434608 | 262434707 | ||||||
MF100E2 IFS-A094193 Ed. 07/2004
Item 2 – | Code of Ethics — Not required as this is not an annual filing. | |
Item 3 – | Audit Committee Financial Expert – Not applicable with semi-annual filing | |
Item 4 – | Principal Accountant Fees and Services – Not applicable with semi-annual filing. | |
Item 5 – | Audit Committee of Listed Registrants – Not applicable. | |
Item 6 – | Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form. | |
Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable. | |
Item 8 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable. | |
Item 9 – | Submission of Matters to a Vote of Security Holders: None. | |
Item 10 – | Controls and Procedures | |
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. | ||
(b) There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. | ||
Item 11 – | Exhibits | |
(a) Code of Ethics – Not applicable with semi-annual filing. | ||
(b) Certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act – Attached hereto |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Dryden Government Securities Trust | |
By (Signature and Title)* | /s/William V. Healey | |
William V. Healey | ||
Chief Legal Officer | ||
Date July 30, 2004 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/Judy A. Rice | |
Judy A. Rice | ||
President and Principal Executive Officer | ||
Date July 30, 2004 | ||
By (Signature and Title)* | /s/Grace C. Torres | |
Grace C. Torres | ||
Treasurer and Principal Financial Officer | ||
Date July 30, 2004 |
* Print the name and title of each signing officer under his or her signature.