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 | 811-3700 |
The Dreyfus/Laurel Tax-Free Municipal Funds | |
(Exact name of Registrant as specified in charter) |
c/o The Dreyfus Corporation | |
200 Park Avenue | |
New York, New York 10166 | |
(Address of principal executive offices) | (Zip code) |
Michael A. Rosenberg, Esq. |
200 Park Avenue |
New York, New York 10166 |
(Name and address of agent for service) |
Registrant's telephone number, including area code: | (212) 922-6000 | |
Date of fiscal year end: | 6/30 | |
Date of reporting period: | 12/31/09 |
1
FORM N-CSR
Item 1. Reports to Stockholders.
[INSERT REPORT HERE]
2
Dreyfus BASIC
California Municipal
Money Market Fund
SEMIANNUAL REPORT December 31, 2009
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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
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Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses |
With Those of Other Funds | |
7 | Statement of Investments |
14 | Statement of Assets and Liabilities |
15 | Statement of Operations |
16 | Statement of Changes in Net Assets |
17 | Financial Highlights |
18 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
Dreyfus BASIC
California Municipal
Money Market Fund
The Fund
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A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC California Municipal Money Market Fund, covering the six month period from July 1, 2009, through December 31, 2009.
Most financial assets ended 2009 with healthy returns, but short-term interest rates remained at historical lows as monetary authorities fought to bring the nation and world out of a severe recession and banking crisis.
After four consecutive quarters of contraction, the U.S. economy returned to growth during the third quarter of 2009, buoyed by greater manufacturing activity to replenish depleted inventories and satisfy export demand. The slumping housing market also showed signs of renewed life when home sales and prices rebounded modestly. However, economic headwinds remain, including a high unemployment rate and the prospect of anemic consumer spending.
While money market yields are unlikely to return to their pre-recession levels anytime soon, we continue to stress the importance of both municipal and taxable money market mutual funds as a haven of price stability and liquidity for risk-averse investors. Is your cash allocation properly positioned for the next phase of this economic cycle? Talk to your financial advisor, who can help you make that determination and prepare for the challenges and opportunities that lie ahead.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.
Thank you for your continued confidence and support.
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Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
January 15, 2010
2
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DISCUSSION OF FUND PERFORMANCE
For the period of July 1, 2009, through December 31, 2009, as provided by Joseph Irace, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended December 31, 2009, Dreyfus BASIC California Municipal Money Market Fund produced an annualized yield of 0.02%. Taking into account the effects of compounding, the fund produced an annualized effective yield of 0.02%.1
Yields of tax-exempt money market instruments remained at historically low levels during the reporting period as the Federal Reserve Board (the “Fed”) maintained an aggressively accommodative monetary policy to combat a recession and financial crisis. Supply-and-demand dynamics in the tax-exempt money markets also contributed to low yields.
The Fund’s Investment Approach
The fund seeks to provide a high level of current income exempt from federal and California state income taxes to the extent consistent with the preservation of capital and the maintenance of liquidity. To pursue this objective, we attempt to add value by selecting the individual tax-exempt money market instruments from high-quality California exempt issuers that we believe are most likely to provide tax-exempt income.We also actively manage the fund’s weighted average maturity in anticipation of interest-rate and supply-and-demand changes in California’s short-term municipal marketplace.
The management of the fund’s weighted average maturity uses a more tactical approach. If we expect the supply of securities to increase temporarily, we may reduce the fund’s weighted average maturity to make cash available for the purchase of higher yielding securities, if they become available.This is due to the fact that yields tend to rise if issuers are competing for investor interest. If we expect demand to surge at a time when we anticipate little issuance and therefore lower yields, we may increase the fund’s average weighted maturity to maintain current yields for as long as we deem practical.At other times, we try to maintain a neutral average weighted maturity.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
Economy, Supply-and-Demand Dynamics Kept Yields Low
The reporting period began in the wake of the most severe recession since the 1930s, as weak housing markets, rising unemployment and declining consumer confidence took their toll.In addition,credit markets remained fragile as they recovered from a global credit crisis that had punished major financial institutions, including dealers and insurers of municipal securities. In response, the Fed had reduced the overnight federal funds rate to an unprecedented low range of 0% to 0.25%.The U.S. Department of the Treasury also had initiated several remedial measures, including the Temporary Guarantee Program for Money Market Funds, which remained in effect through September 18, 2009.
Although the U.S. economy showed signs of improvement over the second half of 2009—including a return to GDP growth during the third quarter of the year—a number of headwinds remained. The unemployment rate has stayed stubbornly high, and housing markets have continued to struggle with sluggish sales and elevated foreclosure rates. In light of a sub-par economic recovery, the Fed left short-term interest rates unchanged throughout the reporting period.
The tax-exempt money markets also were influenced by supply-and-demand factors, which exerted additional downward pressure on already low tax-exempt money market yields.Tighter lending restrictions led to a decrease in the available supply of variable-rate demand notes and tender option bonds, effectively increasing funding costs for municipalities in the short-term market. Consequently, more issuers instead have issued longer-term bonds, including taxable securities through the government-supported Build America Bonds program. Meanwhile, demand for tax-exempt money market instruments remained robust from individuals concerned about tax increases. Due to competitive yields compared with taxable money market instruments, the tax-exempt market also saw demand from institutional investors.
Finally, many states and municipalities currently face weak housing markets, rising unemployment, reduced tax collections and intensifying demands on social services programs. California has continued to expe-
4
rience severe fiscal pressures due to a higher-than-average unemployment rate and slumping housing markets.
In-House Research Supported Credit Quality
We continued to focus on direct, high-quality municipal obligations. Our credit analysts conduct in-depth, independent research into the fiscal health of the issuers we consider, a process that led us to instruments—including commercial paper and municipal notes with maturities less than six months—backed by high-quality banks, pledged tax appropriations or revenues from colleges, hospitals and public facilities providing essential services. We generally shied away from instruments issued by entities that depend heavily on state aid.
We maintained the fund’s weighted average maturity in a roughly neutral position. Since yield differences have remained relatively narrow along the market’s maturity range, this conservative strategy did not adversely affect the fund’s performance.
Safety and Liquidity Are Paramount
Due to California’s ongoing economic and fiscal challenges, we believe the prudent course continues to be a conservative credit selection strategy with an emphasis on preservation of capital and liquidity. The Fed has repeatedly indicated that it is likely to keep short-term interest rates near historical lows for an extended period, suggesting that money market yields are unlikely to rise significantly anytime soon.
January 15, 2010
An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past
performance is no guarantee of future results.Yields fluctuate. Income may be subject to state and
local taxes for non-California residents, and some income may be subject to the federal alternative
minimum tax (AMT) for certain investors.Yields provided reflect the absorption of certain fund
expenses by The Dreyfus Corporation pursuant to an undertaking in effect that may be extended,
terminated or modified at any time. Had these expenses not been absorbed, the fund’s annualized
yield and annualized effective yield would have been -0.03% and -0.03%, respectively.
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus BASIC California Municipal Money Market Fund from July 1, 2009 to December 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2009
Expenses paid per $1,000† | $2.17 |
Ending value (after expenses) | $1,000.10 |
COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended December 31, 2009
Expenses paid per $1,000† | $2.19 |
Ending value (after expenses) | $1,023.04 |
† Expenses are equal to the fund’s annualized expense ratio of .43%, multiplied by the average account value over the
period, multiplied by 184/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS | |||||
December 31, 2009 (Unaudited) | |||||
Short-Term | Coupon | Maturity | Principal | ||
Investments—99.4% | Rate (%) | Date | Amount ($) | Value ($) | |
California—91.4% | |||||
Alameda County Industrial | |||||
Development Authority, Revenue | |||||
(P.J.’s Lumber, Inc. Project) | |||||
(LOC; Comerica Bank) | 0.40 | 1/7/10 | 1,905,000 | a | 1,905,000 |
California, | |||||
Economic Recovery Bonds | |||||
(Insured; Assured Guaranty | |||||
Municipal Corp. and Liquidity | |||||
Facility; Dexia Credit Locale) | 0.25 | 1/7/10 | 3,900,000 | a | 3,900,000 |
California, | |||||
Economic Recovery Bonds | |||||
(Insured; Assured Guaranty | |||||
Municipal Corp. and Liquidity | |||||
Facility; Dexia Credit Locale) | 0.29 | 1/7/10 | 7,000,000 | a | 7,000,000 |
California, | |||||
GO Notes (LOC; Bank of America) | 0.21 | 1/7/10 | 1,000,000 | a | 1,000,000 |
California Department of Water | |||||
Resources, Power Supply | |||||
Revenue (Insured; Assured | |||||
Guaranty Municipal Corp. and | |||||
Liquidity Facility; Dexia | |||||
Credit Locale)�� | 0.21 | 1/7/10 | 4,000,000 | a | 4,000,000 |
California Educational Facilities | |||||
Authority, Revenue (University | |||||
of San Francisco) (LOC; Allied | |||||
Irish Banks) | 0.28 | 1/7/10 | 7,160,000 | a | 7,160,000 |
California Educational Facilities | |||||
Authority, Revenue, CP | |||||
(Stanford University) | 0.25 | 1/13/10 | 7,100,000 | 7,100,000 | |
California Educational Facilities | |||||
Authority, Revenue, CP | |||||
(Stanford University) | 0.40 | 2/25/10 | 2,100,000 | 2,100,000 | |
California Educational Facilities | |||||
Authority, Revenue, CP | |||||
(Stanford University) | 0.30 | 3/11/10 | 3,860,000 | 3,860,000 | |
California Infrastructure and | |||||
Economic Development Bank, IDR | |||||
(Bonny Doon Winery, Inc. | |||||
Project) (LOC; Comerica Bank) | 0.52 | 1/7/10 | 2,910,000 | a | 2,910,000 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
California (continued) | |||||
California Infrastructure and | |||||
Economic Development Bank, IDR | |||||
(Starter and Alternator | |||||
Exchange, Inc. Project) (LOC; | |||||
California State Teachers | |||||
Retirement System) | 0.54 | 1/7/10 | 1,100,000 | a | 1,100,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(Blue Line Transfer Inc. Project) | |||||
(LOC; Union Bank of California) | 0.40 | 1/7/10 | 700,000 | a | 700,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(GreenWaste Recovery, Inc. | |||||
Project) (LOC; Comerica Bank) | 0.45 | 1/7/10 | 2,400,000 | a | 2,400,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(Metropolitan Recycling Inc.) | |||||
(LOC; Comerica Bank) | 0.45 | 1/7/10 | 2,695,000 | a | 2,695,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(Northern Recycling and Waste | |||||
Services, LLC Project) (LOC; | |||||
Union Bank of California) | 0.40 | 1/7/10 | 3,030,000 | a | 3,030,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(Pena’s Disposal, Inc. | |||||
Project) (LOC; Comerica Bank) | 0.45 | 1/7/10 | 2,325,000 | a | 2,325,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(South Tahoe Refuse | |||||
Company Project) (LOC; | |||||
Union Bank of California) | 0.40 | 1/7/10 | 5,540,000 | a | 5,540,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(Sunset Waste Paper, Inc. | |||||
Project) (LOC; Comerica Bank) | 0.45 | 1/7/10 | 3,400,000 | a | 3,400,000 |
California Pollution Control | |||||
Financing Authority, SWDR | |||||
(Valley Vista Services, Inc. | |||||
Project) (LOC; Comerica Bank) | 0.45 | 1/7/10 | 2,000,000 | a | 2,000,000 |
8
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
California (continued) | |||||
California Statewide Communities | |||||
Development Authority, Revenue | |||||
(Azusa Pacific University | |||||
Project) (LOC; Allied Irish | |||||
Banks) | 0.34 | 1/7/10 | 3,500,000 | a | 3,500,000 |
California Statewide Communities | |||||
Development Authority, | |||||
Revenue, CP (Kaiser Permanente) | 0.32 | 5/6/10 | 9,000,000 | 9,000,000 | |
Deutsche Bank Spears/Lifers Trust | |||||
(Anaheim Redevelopment Agency, | |||||
Tax Allocation Revenue, | |||||
Refunding (Anaheim Merged | |||||
Redevelopment Project Area)) | |||||
(Liquidity Facility; Deutsche Bank | |||||
AG and LOC; Deutsche Bank AG) | 0.25 | 1/7/10 | 5,200,000 | a,b | 5,200,000 |
Eastern Municipal Water District, | |||||
Water and Sewer Revenue, COP | |||||
(Installment Sale Agreement | |||||
with Eastern Municipal Water | |||||
District Facilities | |||||
Corporation) (Liquidity | |||||
Facility; Citibank NA) | 0.23 | 1/7/10 | 3,000,000 | a,b | 3,000,000 |
Fresno, | |||||
Sewer System Revenue (Insured; | |||||
Assured Guaranty Municipal | |||||
Corp. and Liquidity Facility; | |||||
Citibank NA) | 0.30 | 1/7/10 | 4,000,000 | a,b | 4,000,000 |
Golden State Tobacco | |||||
Securitization Corporation, | |||||
Enhanced Tobacco Settlement | |||||
Asset-Backed Bonds (Insured; | |||||
Berkshire Hathaway Assurance | |||||
Corporation and Liquidity | |||||
Facility; Citibank NA) | 0.23 | 1/7/10 | 5,505,000 | a,b | 5,505,000 |
Golden State Tobacco | |||||
Securitization Corporation, | |||||
Enhanced Tobacco Settlement | |||||
Asset-Backed Bonds (Prerefunded) | 5.38 | 6/1/10 | 1,000,000 | c | 1,020,356 |
Kern County, | |||||
GO Notes, TRAN | 2.50 | 6/30/10 | 6,200,000 | 6,251,738 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
California (continued) | |||||
Long Beach, | |||||
GO Notes, TRAN | 2.50 | 9/30/10 | 1,000,000 | 1,014,812 | |
Los Angeles County Capital Asset | |||||
Leasing Corporation, LR, CP | |||||
(LOC: Bayerische Landesbank, | |||||
JPMorgan Chase Bank and | |||||
Westdeutsche Landesbank) | 0.45 | 2/8/10 | 10,000,000 | 10,000,000 | |
Los Angeles Department of Water | |||||
and Power, Power System Revenue | 5.00 | 7/1/10 | 800,000 | 817,436 | |
Puttable Floating Option Tax | |||||
Exempt Receipts (California | |||||
Statewide Communities | |||||
Development Authority, MFHR | |||||
(La Mision Village Apartments | |||||
Project)) (Liquidity Facility; | |||||
FHLMC and LOC; FHLMC) | 0.50 | 1/7/10 | 2,250,000 | a,b | 2,250,000 |
Richmond, | |||||
Wastewater Revenue, Refunding | |||||
(LOC; Union Bank of California) | 0.24 | 1/7/10 | 755,000 | a | 755,000 |
Southern California Public Power | |||||
Authority, Transmission | |||||
Project Revenue, Refunding | |||||
(Southern Transmission | |||||
Project) (Insured; Assured | |||||
Guaranty Municipal Corp. | |||||
and Liquidity Facility; | |||||
Westdeutsche Landesbank) | 0.34 | 1/7/10 | 1,815,000 | a | 1,815,000 |
University of California, | |||||
Revenue, CP | 0.32 | 2/12/10 | 3,000,000 | 3,000,000 | |
University of California Regents, | |||||
General Revenue | 5.00 | 5/15/10 | 150,000 | 152,364 | |
Victorville Joint Powers Financing | |||||
Authority, LR (Cogeneration | |||||
Facility Project) (LOC; Fortis Bank) | 0.52 | 1/7/10 | 9,770,000 | a | 9,770,000 |
10
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
U.S. Related—8.0% | |||||
Puerto Rico Sales Tax Financing | |||||
Corporation, Sales Tax Revenue | |||||
(Liquidity Facility; Citibank NA) | 0.25 | 1/7/10 | 7,000,000 | a,b | 7,000,000 |
Puttable Floating Option Tax | |||||
Exempt Receipts (Puerto Rico | |||||
Highways and Transportation | |||||
Authority, Highway Revenue) | |||||
(Liquidity Facility; Dexia | |||||
Credit Locale and LOC; Dexia | |||||
Credit Locale) | 0.50 | 1/7/10 | 4,460,000 | a,b | 4,460,000 |
Total Investments (cost $142,636,706) | 99.4% | 142,636,706 | |||
Cash and Receivables (Net) | .6% | 877,282 | |||
Net Assets | 100.0% | 143,513,988 |
a Variable rate demand note—rate shown is the interest rate in effect at December 31, 2009. Maturity date represents
the next demand date, or the ultimate maturity date if earlier.
b Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in
transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2009, these
securities amounted to $31,415,000 or 21.9% of net assets.
c This security is prerefunded; the date shown represents the prerefunded date. 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.
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Summary of Abbreviations | |||
ABAG | Association of Bay Area Governments | ACA | American Capital Access |
AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
AMBAC | American Municipal Bond | ARRN | Adjustable Rate Receipt Notes |
Assurance Corporation | |||
BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
CP | Commercial Paper | EDR | Economic Development Revenue |
EIR | Environmental Improvement Revenue | FGIC | Financial Guaranty Insurance |
Company | |||
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage | FNMA | Federal National |
Corporation | Mortgage Association | ||
GAN | Grant Anticipation Notes | GIC | Guaranteed Investment Contract |
GNMA | Government National | GO | General Obligation |
Mortgage Association | |||
HR | Hospital Revenue | IDB | Industrial Development Board |
IDC | Industrial Development Corporation | IDR | Industrial Development Revenue |
LOC | Letter of Credit | LOR | Limited Obligation Revenue |
LR | Lease Revenue | MFHR | Multi-Family Housing Revenue |
MFMR | Multi-Family Mortgage Revenue | PCR | Pollution Control Revenue |
PILOT | Payment in Lieu of Taxes | RAC | Revenue Anticipation Certificates |
RAN | Revenue Anticipation Notes | RAW | Revenue Anticipation Warrants |
RRR | Resources Recovery Revenue | SAAN | State Aid Anticipation Notes |
SBPA | Standby Bond Purchase Agreement | SFHR | Single Family Housing Revenue |
SFMR | Single Family Mortgage Revenue | SONYMA State of New York Mortgage Agency | |
SWDR | Solid Waste Disposal Revenue | TAN | Tax Anticipation Notes |
TAW | Tax Anticipation Warrants | TRAN | Tax and Revenue Anticipation Notes |
XLCA | XL Capital Assurance |
12
Summary of Combined Ratings (Unaudited) | |||||
Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† |
F1+,F1 | VMIG1,MIG1,P1 | SP1+,SP1,A1+,A1 | 98.6 | ||
AAA,AA,Ad | Aaa,Aa,Ad | AAA,AA,Ad | 1.4 | ||
100.0 |
† Based on total investments.
d Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers.
See notes to financial statements.
The Fund 13
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2009 (Unaudited)
Cost | Value | |
Assets ($): | ||
Investments in securities—See Statement of Investments | 142,636,706 | 142,636,706 |
Cash | 732,181 | |
Interest receivable | 193,314 | |
143,562,201 | ||
Liabilities ($): | ||
Due to The Dreyfus Corporation and affiliates—Note 2 | 48,209 | |
Dividend payable | 4 | |
48,213 | ||
Net Assets ($) | 143,513,988 | |
Composition of Net Assets ($): | ||
Paid-in capital | 143,513,185 | |
Accumulated net realized gain (loss) on investments | 803 | |
Net Assets ($) | 143,513,988 | |
Shares Outstanding | ||
(unlimited number of shares of Beneficial Interest authorized) | 143,513,185 | |
Net Asset Value, offering and redemption price per share ($) | 1.00 | |
See notes to financial statements. |
14
STATEMENT OF OPERATIONS | |
Six Months Ended December 31, 2009 (Unaudited) | |
Investment Income ($): | |
Interest Income | 397,470 |
Expenses: | |
Management fee—Note 2 | 396,577 |
Treasury insurance expense—Note 1(f) | 23,795 |
Trustees’ fees—Note 2 | 4,659 |
Total Expenses | 425,031 |
Less—reduction in expenses due to undertaking—Note 2 | (39,442) |
Less—Trustees’ fees reimbursed by the Manager—Note 2 | (4,659) |
Net Expenses | 380,930 |
Investment Income—Net, representing net increase | |
in net assets resulting from operations | 16,540 |
See notes to financial statements. |
The Fund 15
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
December 31, 2009 | Year Ended | |
(Unaudited) | June 30, 2009 | |
Operations ($): | ||
Investment income—net | 16,540 | 2,601,895 |
Net realized gain (loss) on investments | — | 803 |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 16,540 | 2,602,698 |
Dividends to Shareholders from ($): | ||
Investment income—net | (16,540) | (2,608,657) |
Beneficial Interest Transactions ($1.00 per share): | ||
Net proceeds from shares sold | 218,230,419 | 511,133,170 |
Dividends reinvested | 4,783 | 551,087 |
Cost of shares redeemed | (269,506,542) | (576,575,702) |
Increase (Decrease) in Net Assets from | ||
Beneficial Interest Transactions | (51,271,340) | (64,891,445) |
Total Increase (Decrease) in Net Assets | (51,271,340) | (64,897,404) |
Net Assets ($): | ||
Beginning of Period | 194,785,328 | 259,682,732 |
End of Period | 143,513,988 | 194,785,328 |
See notes to financial statements. |
16
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
December 31, 2009 | Year Ended June 30, | |||||
(Unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 | |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Investment Operations: | ||||||
Investment income—net | .000a | .010 | .027 | .032 | .025 | .014 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | (.000)a | (.010) | (.027) | (.032) | (.025) | (.014) |
Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Total Return (%) | .02b | 1.04 | 2.72 | 3.21 | 2.50 | 1.34 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .48b | .49 | .46 | .45 | .45 | .46 |
Ratio of net expenses | ||||||
to average net assets | .43b | .49c | .45 | .45 | .45 | .45 |
Ratio of net investment income | ||||||
to average net assets | .02b | 1.08 | 2.57 | 3.16 | 2.49 | 1.37 |
Net Assets, end of period | ||||||
($ x 1,000) | 143,514 | 194,785 | 259,683 | 107,993 | 72,067 | 72,141 |
a Amount represents less than $.001 per share.
b Annualized.
c Expense waivers and/or reimbursements amounted to less than .01%.
See notes to financial statements.
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus BASIC California Municipal Money Market Fund (the “fund”) is a separate non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the “Trust”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company, currently offering three series including the fund. The fund’s investment objective is to provide a high level of current income exempt from federal and California income taxes to the extent consistent with the preservation of capital and the maintenance of liquidity. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary ofThe Bank of NewYork Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Man ager, is the distributor of the fund’s shares, which are sold without a sales charge.
It is the fund’s policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) has become the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The ASC has superseded all existing non-SEC accounting and reporting standards. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
18
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the Board of Trustees to represent the fair value of the fund’s investments.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
cost, in accordance with rules under the Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The following is a summary of the inputs used as of December 31, 2009 in valuing the fund’s investments:
Short-Term | |
Valuation Inputs | Investments ($)† |
Level 1—Unadjusted Quoted Prices | — |
Level 2—Other Significant Observable Inputs | 142,636,706 |
Level 3—Significant Unobservable Inputs | — |
Total | 142,636,706 |
† See Statement of Investments for additional detailed categorizations.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Cost of investments represents amortized cost.
(c) Concentration of risk: The fund follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the fund.
All cash balances were maintained with the Custodian,The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus.
(d) 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 gains, if any, 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 of 1986, as amended, (the “Code”).To the
20
extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains.
(e) 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 Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended December 31, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended June 30, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended June 30, 2009 was as follows: tax exempt income $2,601,895 and long-term capital gains $6,762.The tax character of current year distributions will be determined at the end of the current fiscal year.
At December 31, 2009, 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).
(f) Treasury’s Temporary Guarantee Program: The fund entered into a Guarantee Agreement with the United States Department of the Treasury (the “Treasury”) to participate in the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”).
Under the Program, the Treasury guaranteed the share price of shares of the fund held by shareholders as of September 19, 2008 at $1.00 per share if the fund’s net asset value per share fell below $0.995 (a
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
“Guarantee Event”) and the fund liquidated. Recovery under the Program was subject to certain conditions and limitations.
Fund shares acquired by investors after September 19, 2008 that increased the number of fund shares the investor held at the close of business on September 19, 2008 were not eligible for protection under the Program. In addition, fund shares acquired by investors who did not hold fund shares at the close of business on September 19, 2008 were not eligible for protection under the Program.
The Program, which was originally set to expire on December 18, 2008, was initially extended by the Treasury until April 30, 2009 and had been further extended by the Treasury until September 18, 2009, at which time the Secretary of the Treasury terminated the Program.As such, the fund is no longer eligible for protection under the Program. Participation in the initial term and the two extended periods of the Program required payments to the Treasury in the amounts of .01%, .015% and .015%, respectively, of the fund’s shares outstanding as of September 19, 2008 (valued at $1.00 per share).This expense was borne by the fund without regard to any expense limitation in effect.
NOTE 2—Investment Management Fee and Other Transactions with Affiliates:
Pursuant to an investment management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund.The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .45% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal
22
to the fund’s allocable portion of fees and expenses of the non-interested Trustees (including counsel fees). Prior to January 1, 2010, each Board member received $45,000 per year, plus $6,000 for each joint Board meeting of the Trust, The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Funds Trust, Dreyfus Investment Funds and Dreyfus Fund, Inc. (collectively, the “Board Group Open-End Funds”) attended, $2,000 for separate in-person committee meetings attended which were not held in conjunction with a regularly scheduled Board meeting and $1,500 for Board meetings and separate committee meetings attended that were conducted by telephone. Effective January 1, 2010, the Board Group Open-End Funds will pay each Board member who is not an “interested person” of the Trust (as defined in the 1940 Act) $60,000 per annum, plus $7,000 per joint Board Group Open-End Funds Board meeting attended, $2,500 for separa te in-person committee meetings attended which are not held in conjunction with a regularly scheduled Board meeting and $2,000 for Board meetings and separate committee meetings attended that are conducted by telephone.The Board Group Open-End Funds also reimburse each Board member who is no an “interested person” of the Trust (as defined in the 1940 Act) for travel and out-of-pocket expenses. With respect to Board meetings, the Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). With respect to compensation committee meetings prior to January 1, 2010, the Chair of the compensation committee received $900 per compensation committee meeting, and, effective January 1, 2010, the Chair of each of the Board’s committees, unless the Chair also serves as Chair of the Board, will receive $1,350 per applicable committee meeting. In the event that there is an in-person joint committee meeting or a joint telephone meeting of the Board Group Open-End Funds and Dreyfus HighYield Strategies Fund, the $2,000 or $1,500 fee (prior to January 1, 2010) or the $2,500 or $2,000 fee (effective January 1, 2010), as applicable, is allocated between the Board Group Open-End Funds and Dreyfus High Yield Strategies Fund.The Trust’s portion of these fees and expenses are
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
charged and allocated to each series based on net assets. Amounts required to be paid by the Trust directly to the non-interested Trustees, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Trustees.
The Manager has undertaken to reimburse expenses in the event that current yields drop below a certain level.This undertaking is voluntary and not contractual and may be terminated at any time.The reduction in expenses, pursuant to the undertaking, amounted to $39,442 during the period ended December 31, 2009.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $48,209.
NOTE 3—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
24
For More Information
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Telephone 1-800-645-6561
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 E-mail Send your request to info@dreyfus.com Internet Information can be viewed online or downloaded at: http://www.dreyfus.com
The fund will disclose daily, on www.dreyfus.com, the fund’s complete schedule of holdings as of the end of the previous business day. The schedule of holdings will remain on the website until the fund files its Form N-Q or Form N-CSR for the period that includes the date of the posted holdings.
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information regarding how the fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-645-6561.
© 2010 MBSC Securities Corporation |
Dreyfus BASIC
Massachusetts Municipal
Money Market Fund
SEMIANNUAL REPORT December 31, 2009
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Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.
The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
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Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses |
With Those of Other Funds | |
7 | Statement of Investments |
13 | Statement of Assets and Liabilities |
14 | Statement of Operations |
15 | Statement of Changes in Net Assets |
16 | Financial Highlights |
17 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
Dreyfus BASIC
Massachusetts Municipal
Money Market Fund
The Fund
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A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC Massachusetts Municipal Money Market Fund, covering the six-month period from July 1, 2009, through December 31, 2009.
Most financial assets ended 2009 with healthy returns, but short-term interest rates remained at historical lows as monetary authorities fought to bring the nation and world out of a severe recession and banking crisis.
After four consecutive quarters of contraction, the U.S. economy returned to growth during the third quarter of 2009, buoyed by greater manufacturing activity to replenish depleted inventories and satisfy export demand. The slumping housing market also showed signs of renewed life when home sales and prices rebounded modestly. However, economic headwinds remain, including a high unemployment rate and the prospect of anemic consumer spending.
While money market yields are unlikely to return to their pre-recession levels anytime soon, we continue to stress the importance of both municipal and taxable money market mutual funds as a haven of price stability and liquidity for risk-averse investors. Is your cash allocation properly positioned for the next phase of this economic cycle? Talk to your financial advisor, who can help you make that determination and prepare for the challenges and opportunities that lie ahead.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.
Thank you for your continued confidence and support.
![](https://capedge.com/proxy/N-CSRS/0000717341-10-000002/bmammmncsrx4x2.jpg)
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
January 15, 2010
2
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DISCUSSION OF FUND PERFORMANCE
For the period of July 1, 2009, through December 31, 2009, as provided by J. Christopher Nicholl and John F. Flahive, Portfolio Managers
Fund and Market Performance Overview
For the six-month period ended December 31, 2009, Dreyfus BASIC Massachusetts Municipal Money Market Fund produced an annualized yield of 0.00%. Taking into account the effects of compounding, the fund produced an annualized effective yield of 0.00%.1
Yields of tax-exempt money market instruments remained at historically low levels during the reporting period as the Federal Reserve Board (the “Fed”) maintained an aggressively accommodative monetary policy to combat a recession and financial crisis. Supply-and-demand dynamics in the tax-exempt money markets also contributed to historically low yields.
The Fund’s Investment Approach
The fund seeks to provide a high level of current income exempt from federal and Massachusetts state income taxes to the extent consistent with the preservation of capital and the maintenance of liquidity. To pursue its goal, the fund normally invests substantially all of its assets in short-term, high quality municipal obligations that provide income exempt from federal and Massachusetts state income taxes. When the fund manager believes that acceptable Massachusetts municipal obligations are unavailable for investment, the fund may invest temporarily in securities that provide income subject to Massachusetts state personal income taxes, but not federal income tax. In addition, the fund may invest temporarily in high-quality, taxable money market instruments when acceptable municipal obligations are not available for investment.
The fund may also invest in high-quality short-term structured notes, which are derivative instruments whose value is tied to underlying municipal obligations.
Economy, Supply-and-Demand Dynamics Kept Yields Low
The reporting period began in the wake of the most severe recession since the 1930s, as weak housing markets, rising unemployment and
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
declining consumer confidence took their toll.In addition,credit markets remained fragile as they recovered from a global credit crisis that had punished major financial institutions, including dealers and insurers of municipal securities. In response, the Fed had reduced the overnight federal funds rate to an unprecedented low range of 0.00% to 0.25%. The U.S. Department of the Treasury also had initiated several remedial measures, including the Temporary Guarantee Program for Money Market Funds, which remained in effect through September 18, 2009.
Although the U.S. economy showed signs of improvement over the second half of 2009—including a return to GDP growth during the third quarter of the year—a number of headwinds remained. The unemployment rate has stayed stubbornly high, and housing markets have continued to struggle with sluggish sales and elevated foreclosure rates. In light of a sub-par economic recovery, the Fed left short-term interest rates unchanged throughout the reporting period.
The tax-exempt money markets also were influenced by supply-and-demand factors, which exerted additional downward pressure on already low yields. Tighter lending restrictions and financial industry consolidation led to a decrease in the available supply of variable-rate demand notes and tender option bonds, effectively increasing funding costs for municipalities in the short-term market. Consequently, more issuers instead have issued longer-term bonds, including taxable securities through the government-supported Build America Bonds program.Meanwhile,demand for tax-exempt money market instruments remained robust from individuals concerned about tax increases. Due to competitive yields compared with taxable money market instruments on a national level, the tax-exempt market also saw demand from institutional investors.
Like many states, Massachusetts faced weak housing markets, rising unemployment, reduced tax collections and intensifying demands on social services programs. However, Massachusetts has weathered the downturn better than many other states, as it entered the recession with ample reserves and has demonstrated a willingness to find new revenues and reduce spending to balance its budget.
4
Maintaining a Conservative Investment Posture
In this environment, we continued to focus on high-quality municipal obligations with relatively short maturities. As a result, the fund’s weighted average maturity fell over the reporting period, ending 2009 at less than 30 days. Because many of the fund’s peers followed a similarly conservative strategy, the fund’s weighted average maturity remained in a range that was roughly in line with slightly longer than industry averages.
In addition, due to reduced issuance volumes and our focus on a relatively small list of approved issuers, maintaining broad diversification among Massachusetts instruments proved to be a challenge in 2009. Consequently, at times during the reporting period, we invested in federally tax-exempt instruments from out-of-state issuers. In addition, the percentage of the fund’s assets allocated to longer-term municipal notes fell over the reporting period, while the percentage invested in short-term variable-rate demand notes increased.
Safety and Liquidity Are Paramount
Due to ongoing economic and fiscal challenges affecting all states, we believe the prudent course continues to be a conservative credit selection strategy with an emphasis on preservation of capital and liquidity.The Fed has repeatedly indicated that it is likely to keep short-term interest rates near historical lows for an extended period, suggesting that tax-exempt money market yields are unlikely to rise significantly anytime soon.
January 15, 2010
An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past
performance is no guarantee of future results.Yields fluctuate. Income may be subject to state and
local taxes for non-Massachusetts residents, and some income may be subject to the federal
alternative minimum tax (AMT) for certain investors.Yields provided reflect the absorption of
certain fund expenses by The Dreyfus Corporation pursuant to an undertaking in effect that
may be extended, terminated, or modified at any time. Had these expenses not been absorbed, the
annualized yield and annualized effective yield would have been -0.13% and -0.13%, respectively.
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus BASIC Massachusetts Municipal Money Market Fund from July 1, 2009 to December 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2009
Expenses paid per $1,000† | $1.76 |
Ending value (after expenses) | $1,000.00 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended December 31, 2009
Expenses paid per $1,000† | $1.79 |
Ending value (after expenses) | $1,023.44 |
† Expenses are equal to the fund’s annualized expense ratio of .35%, multiplied by the average account value over the
period, multiplied by 184/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS | |||||
December 31, 2009 (Unaudited) | |||||
Short-Term | Coupon | Maturity | Principal | ||
Investments—99.9% | Rate (%) | Date | Amount ($) | Value ($) | |
Andover, | |||||
GO Notes, BAN | 1.00 | 3/25/10 | 4,166,500 | 4,169,788 | |
Boston, | |||||
GO Notes | 2.25 | 2/1/10 | 530,000 | 530,664 | |
Massachusetts, | |||||
Consolidated Loan (Liquidity | |||||
Facility; Dexia Credit Locale) | 0.32 | 1/1/10 | 2,700,000 | a | 2,700,000 |
Massachusetts Development Finance | |||||
Agency, Higher Education | |||||
Revenue, Refunding (Smith | |||||
College Issue) | 0.25 | 1/7/10 | 4,900,000 | a,b | 4,900,000 |
Massachusetts Development Finance | |||||
Agency, Multi-Mode Revenue | |||||
(Worcester Academy Project) | |||||
(LOC; Allied Irish Banks) | 0.27 | 1/7/10 | 300,000 | a,b | 300,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Beaver | |||||
Country Day School Issue) | |||||
(LOC; Allied Irish Banks) | 0.43 | 1/7/10 | 4,400,000 | a,b | 4,400,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Boston | |||||
University Issue) (LOC; | |||||
Allied Irish Banks) | 0.20 | 1/1/10 | 1,000,000 | a,b | 1,000,000 |
Massachusetts Development | |||||
Finance Agency, Revenue | |||||
(Boston University | |||||
Issue) (LOC; BNP Paribas) | 0.18 | 1/7/10 | 5,000,000 | a,b | 5,000,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Exploration | |||||
School, Inc. Issue) (LOC; TD Bank) | 0.25 | 1/7/10 | 2,590,000 | a,b | 2,590,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Fay School | |||||
Issue) (LOC; TD Bank) | 0.25 | 1/7/10 | 3,800,000 | a,b | 3,800,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Harvard | |||||
University Issue) | 0.25 | 1/7/10 | 4,500,000 | a,b | 4,500,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Justice | |||||
Resource Institute Issue) | |||||
(LOC; Bank of America) | 0.25 | 1/7/10 | 2,000,000 | a | 2,000,000 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
Massachusetts Development Finance | |||||
Agency, Revenue (Saint | |||||
Peter-Marian Issue) (LOC; | |||||
Bank of America) | 0.25 | 1/7/10 | 910,000 | a | 910,000 |
Massachusetts Development Finance | |||||
Agency, Revenue (Worcester | |||||
Academy Issue) (LOC; Allied | |||||
Irish Banks) | 0.36 | 1/7/10 | 1,100,000 | a,b | 1,100,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue | |||||
(Amherst College Issue) | 0.22 | 1/1/10 | 1,000,000 | a,b | 1,000,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue (Baystate | |||||
Medical Center Issue) (LOC; | |||||
JPMorgan Chase Bank) | 0.21 | 1/7/10 | 1,000,000 | a | 1,000,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue (Bentley | |||||
College Issue) (LOC; JPMorgan | |||||
Chase Bank) | 0.17 | 1/7/10 | 5,400,000 | a,b | 5,400,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue (Capital | |||||
Asset Program Issue) (LOC; | |||||
Bank of America) | 0.22 | 1/1/10 | 1,500,000 | a | 1,500,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue (Great | |||||
Brook Valley Health Center | |||||
Issue) (LOC; TD Bank) | 0.24 | 1/7/10 | 2,425,000 | a | 2,425,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue (Partners | |||||
HealthCare System Issue) (LOC; | |||||
Citibank NA) | 0.16 | 1/7/10 | 4,000,000 | a | 4,000,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue (Peabody | |||||
Essex Museum Issue) | |||||
(LOC; Bank of America) | 0.21 | 1/7/10 | 3,235,000 | a | 3,235,000 |
8
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue | |||||
(Tufts University Issue) | |||||
(Liquidity Facility; | |||||
JPMorgan Chase Bank) | 0.23 | 1/1/10 | 1,700,000 | a,b | 1,700,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue | |||||
(Wellesley College Issue) | 0.15 | 1/7/10 | 3,675,000 | a,b | 3,675,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue | |||||
(Williams College Issue) | 0.25 | 1/7/10 | 3,393,000 | a,b | 3,393,000 |
Massachusetts Health and | |||||
Educational Facilities | |||||
Authority, Revenue | |||||
(Williams College Issue) | 0.53 | 4/7/10 | 500,000 | b | 500,000 |
Massachusetts Housing Finance | |||||
Agency, Housing Revenue | |||||
(Insured; Assured Guaranty | |||||
Municipal Corp. and Liquidity | |||||
Facility; Dexia Credit Locale) | 0.38 | 1/7/10 | 6,900,000 | a | 6,900,000 |
Massachusetts Industrial Finance | |||||
Agency, IDR, Refunding | |||||
(Nova Realty Trust) | |||||
(LOC; Bank of America) | 0.27 | 1/7/10 | 3,000,000 | a | 3,000,000 |
Massachusetts Water Resources | |||||
Authority, Multi-Modal | |||||
Subordinated General | |||||
Revenue (LOC; Landesbank | |||||
Hessen-Thuringen Girozentrale) | 0.25 | 1/7/10 | 200,000 | a | 200,000 |
Massachusetts Water Resources | |||||
Authority, Multi-Modal | |||||
Subordinated General Revenue, | |||||
Refunding (LOC; Landesbank | |||||
Baden-Wurttemberg) | 0.22 | 1/1/10 | 1,500,000 | a | 1,500,000 |
Massachusetts Water Resources | |||||
Authority, Multi-Modal | |||||
Subordinated General Revenue, | |||||
Refunding (LOC; Landesbank | |||||
Hessen-Thuringen Girozentrale) | 0.32 | 1/1/10 | 7,100,000 | a | 7,100,000 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | |
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) |
Nahant, | ||||
GO Notes, BAN | 1.50 | 10/13/10 | 1,566,000 | 1,575,097 |
Plymouth, | ||||
GO Notes, BAN | 1.25 | 5/13/10 | 1,050,000 | 1,052,864 |
Rockport, | ||||
GO Notes, BAN | 1.00 | 6/25/10 | 4,450,542 | 4,462,011 |
Wellesley, | ||||
GO Notes (Municipal | ||||
Purpose Loan) | 3.00 | 6/1/10 | 1,611,000 | 1,627,723 |
Total Investments (cost $93,146,147) | 99.9% | 93,146,147 | ||
Cash and Receivables (Net) | .1% | 57,070 | ||
Net Assets | 100.0% | 93,203,217 |
a Variable rate demand note—rate shown is the interest rate in effect at December 31, 2009. Maturity date represents
the next demand date, or the ultimate maturity date if earlier.
b At December 31, 2009, the fund had $43,258,000 or 46.4% of net assets invested in securities whose payment of
principal and interest is dependent upon revenues generated from education.
10
Summary of Abbreviations | |||
ABAG | Association of Bay Area Governments | ACA | American Capital Access |
AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
AMBAC | American Municipal Bond | ARRN | Adjustable Rate Receipt Notes |
Assurance Corporation | |||
BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
CP | Commercial Paper | EDR | Economic Development Revenue |
EIR | Environmental Improvement Revenue | FGIC | Financial Guaranty Insurance |
Company | |||
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage | FNMA | Federal National |
Corporation | Mortgage Association | ||
GAN | Grant Anticipation Notes | GIC | Guaranteed Investment Contract |
GNMA | Government National | GO | General Obligation |
Mortgage Association | |||
HR | Hospital Revenue | IDB | Industrial Development Board |
IDC | Industrial Development Corporation | IDR | Industrial Development Revenue |
LOC | Letter of Credit | LOR | Limited Obligation Revenue |
LR | Lease Revenue | MFHR | Multi-Family Housing Revenue |
MFMR | Multi-Family Mortgage Revenue | PCR | Pollution Control Revenue |
PILOT | Payment in Lieu of Taxes | RAC | Revenue Anticipation Certificates |
RAN | Revenue Anticipation Notes | RAW | Revenue Anticipation Warrants |
RRR | Resources Recovery Revenue | SAAN | State Aid Anticipation Notes |
SBPA | Standby Bond Purchase Agreement | SFHR | Single Family Housing Revenue |
SFMR | Single Family Mortgage Revenue | SONYMA State of New York Mortgage Agency | |
SWDR | Solid Waste Disposal Revenue | TAN | Tax Anticipation Notes |
TAW | Tax Anticipation Warrants | TRAN | Tax and Revenue Anticipation Notes |
XLCA | XL Capital Assurance |
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Summary of Combined Ratings (Unaudited) | |||||
Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† |
F1+,F1 | VMIG1,MIG1,P1 | SP1+,SP1,A1+,A1 | 83.3 | ||
AAA,AA,Ac | Aaa,Aa,Ac | AAA,AA,Ac | 10.8 | ||
Not Ratedd | Not Ratedd | Not Ratedd | 5.9 | ||
100.0 |
† Based on total investments.
c Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers.
d Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to
be of comparable quality to those rated securities in which the fund may invest.
See notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2009 (Unaudited)
Cost | Value | |
Assets ($): | ||
Investments in securities—See Statement of Investments | 93,146,147 | 93,146,147 |
Interest receivable | 90,385 | |
93,236,532 | ||
Liabilities ($): | ||
Due to The Dreyfus Corporation and affiliates—Note 2 | 26,162 | |
Cash overdraft due to Custodian | 7,150 | |
Dividend payable | 3 | |
33,315 | ||
Net Assets ($) | 93,203,217 | |
Composition of Net Assets ($): | ||
Paid-in capital | 93,203,202 | |
Accumulated net realized gain (loss) on investments | 15 | |
Net Assets ($) | 93,203,217 | |
Shares Outstanding | ||
(unlimited number of shares of Beneficial Interest authorized) | 93,214,287 | |
Net Asset Value, offering and redemption price per share ($) | 1.00 | |
See notes to financial statements. |
The Fund 13
STATEMENT OF OPERATIONS | |
Six Months Ended December 31, 2009 (Unaudited) | |
Investment Income ($): | |
Interest Income | 199,763 |
Expenses: | |
Management fee—Note 2 | 257,748 |
Treasury insurance expense—Note 1(f) | 13,847 |
Trustees’ fees—Note 2 | 3,026 |
Total Expenses | 274,621 |
Less—reduction in expenses due to undertaking—Note 2 | (71,835) |
Less—Trustees’ fees reimbursed by the Manager—Note 2 | (3,026) |
Net Expenses | 199,760 |
Investment Income—Net, representing net increase | |
in net assets resulting from operations | 3 |
See notes to financial statements. |
14
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
December 31, 2009 | Year Ended | |
(Unaudited) | June 30, 2009 | |
Operations ($): | ||
Investment income—net | 3 | 1,626,687 |
Net realized gain (loss) on investments | — | 15 |
Net Increase (Decrease) in Net Assets | ||
Resulting from Operations | 3 | 1,626,702 |
Dividends to Shareholders from ($): | ||
Investment income—net | (3) | (1,659,677) |
Beneficial Interest Transactions ($1.00 per share): | ||
Net proceeds from shares sold | 79,815,557 | 306,103,065 |
Dividends reinvested | 1 | 227,602 |
Cost of shares redeemed | (119,418,898) | (352,722,205) |
Increase (Decrease) in Net Assets from | ||
Beneficial Interest Transactions | (39,603,340) | (46,391,538) |
Total Increase (Decrease) in Net Assets | (39,603,340) | (46,424,513) |
Net Assets ($): | ||
Beginning of Period | 132,806,557 | 179,231,070 |
End of Period | 93,203,217 | 132,806,557 |
See notes to financial statements. |
The Fund 15
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
December 31, 2009 | Year Ended June 30, | |||||
(Unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 | |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Investment Operations: | ||||||
Investment income—net | .000a | .009 | .026 | .032 | .024 | .013 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | (.000)a | (.009) | (.026) | (.032) | (.024) | (.013) |
Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Total Return (%) | .00b,c | .95 | 2.59 | 3.21 | 2.48 | 1.34 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .48c | .49 | .46 | .46 | .46 | .45 |
Ratio of net expenses | ||||||
to average net assets | .35c | .47 | .45 | .45 | .45 | .45 |
Ratio of net investment income | ||||||
to average net assets | .00b,c | .96 | 2.51 | 3.17 | 2.46 | 1.33 |
Net Assets, end of period | ||||||
($ x 1,000) | 93,203 132,807 | 179,231 | 162,062 | 130,286 | 131,162 |
a Amount represents less than $.001 per share.
b Amount represents less than .01%.
c Annualized.
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus BASIC Massachusetts Municipal Money Market Fund (the “fund”) is a separate non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the “Trust”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company, currently offering three series including the fund.The fund’s investment objective is to provide a high level of current income exempt from federal and Massachusetts state income taxes to the extent consistent with the preservation of capital and the maintenance of liquidity.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiar y of the Manager, is the distributor of the fund’s shares, which are sold without a sales charge.
It is the fund’s policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) has become the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The ASC has superseded all existing non-SEC accounting and reporting standards. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the Board of Trustees to represent the fair value of the fund’s investments.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the Act. Generally, amortized cost approximates the current fair value of a security, but since the value is
18
not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The following is a summary of the inputs used as of December 31, 2009 in valuing the fund’s investments:
Short-Term | |
Valuation Inputs | Investments ($)† |
Level 1—Unadjusted Quoted Prices | - |
Level 2—Other Significant Observable Inputs | 93,146,147 |
Level 3—Significant Unobservable Inputs | - |
Total | 93,146,147 |
† See Statement of Investments for additional detailed categorizations.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Cost of investments represents amortized cost.
(c) Concentration of risk: The fund follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the commonwealth and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the fund.
All cash balances were maintained with the Custodian,The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus.
(d) 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 gains, if any, 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 of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains.
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(e) 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 Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended December 31, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended June 30, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended June 30, 2009 was as follows: tax exempt income $1,626,687, ordinary income $32,498 and long-term capital gains $492. The tax character of current year distributions will be determined at the end of the current fiscal year.
At December 31, 2009, 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).
(f) Treasury’s Temporary Guarantee Program: The fund entered into a Guarantee Agreement with the United States Department of the Treasury (the “Treasury”) to participate in the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”).
Under the Program, the Treasury guaranteed the share price of shares of the fund held by shareholders as of September 19, 2008 at $1.00 per share if the fund’s net asset value per share fell below $0.995 (a “Guarantee Event”) and the fund liquidated. Recovery under the Program was subject to certain conditions and limitations.
20
Fund shares acquired by investors after September 19, 2008 that increased the number of fund shares the investor held at the close of business on September 19, 2008 were not eligible for protection under the Program. In addition, fund shares acquired by investors who did not hold fund shares at the close of business on September 19, 2008 were not eligible for protection under the Program.
The Program, which was originally set to expire on December 18, 2008, was initially extended by the Treasury until April 30, 2009 and had been further extended by the Treasury until September 18, 2009, at which time the Secretary of the Treasury terminated the Program.As such, the fund is no longer eligible for protection under the Program. Participation in the initial term and the two extended periods of the Program required payments to the Treasury in the amounts of .01%, .015% and .015%, respectively, of the fund’s shares outstanding as of September 19, 2008 (valued at $1.00 per share).This expense was borne by the fund without regard to any expense limitation in effect.
NOTE 2—Investment Management Fee And Other Transactions With Affiliates:
Pursuant to an investment management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund.The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .45% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-intereste d
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Trustees (including counsel fees). Prior to January 1, 2010, each Board member received $45,000 per year, plus $6,000 for each joint Board meeting of the Trust, The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Funds Trust, Dreyfus Investment Funds and Dreyfus Fund, Inc. (collectively, the “Board Group Open-End Funds”) attended, $2,000 for separate in-person committee meetings attended which were not held in conjunction with a regularly scheduled Board meeting and $1,500 for Board meetings and separate committee meetings attended that were conducted by telephone. Effective January 1, 2010, the Board Group Open-End Funds will pay each Board member who is not an “interested person” of theTrust (as defined in the 1940 Act) $60,000 per annum, plus $7,000 per joint Board Group Open-End Funds Board meeting attended, $2,500 for separate in-person committee meetings attended which are not held in conjunction with a regularly scheduled Board meeting and $2,000 for Board meetings and separate committee meetings attended that are conducted by telephone.The Board Group Open-End Funds also reimburse each Board member who is no an “interested person” of the Trust (as defined in the 1940 Act) for travel and out-of-pocket expenses. With respect to Board meetings, the Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). With respect to compensation committee meetings prior to January 1, 2010, the Chair of the compensation committee received $900 per compensation committee meeting, and, effective January 1, 2010, the Chair of each of the Board’s committees, unless the Chair also serves as Chair of the Board, will receive $1,350 per applicable committee meeting. In the event that there is an in-person joint committee meeting or a joint telephone meeting of the Board Group Open-End Funds and Dreyfus HighYield Strategies Fund, the $2,000 or $1,500 fee (p rior to January 1, 2010) or the $2,500 or $2,000 fee (effective January 1, 2010), as applicable, is allo-
22
cated between the Board Group Open-End Funds and Dreyfus High Yield Strategies Fund.TheTrust’s portion of these fees and expenses are charged and allocated to each series based on net assets. Amounts required to be paid by the Trust directly to the non-interested Trustees, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Trustees.
The Manager has undertaken to reimburse expenses in the event that current yields drop below a certain level.This undertaking is voluntary and not contractual and may be terminated at any time.The reduction in expenses, pursuant to the undertaking, amounted to $71,835 during the period ended December 31, 2009.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $26,162.
NOTE 3—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
The Fund 23
NOTES
For More Information
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Telephone 1-800-645-6561
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 E-mail Send your request to info@dreyfus.com Internet Information can be viewed online or downloaded at: http://www.dreyfus.com
The fund will disclose daily, on www.dreyfus.com, the fund’s complete schedule of holdings as of the end of the previous business day. The schedule of holdings will remain on the website until the fund files its Form N-Q or Form N-CSR for the period that includes the date of the posted holdings.
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information regarding how the fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-645-6561.
© 2010 MBSC Securities Corporation |
Dreyfus BASIC
New York Municipal
Money Market Fund
SEMIANNUAL REPORT December 31, 2009
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Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.
The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
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Contents | |
THE FUND | |
2 | A Letter from the Chairman and CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses |
With Those of Other Funds | |
7 | Statement of Investments |
16 | Statement of Assets and Liabilities |
17 | Statement of Operations |
18 | Statement of Changes in Net Assets |
19 | Financial Highlights |
20 | Notes to Financial Statements |
FOR MORE INFORMATION | |
Back Cover |
Dreyfus BASIC
New York Municipal
Money Market Fund
The Fund
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A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC New York Municipal Money Market Fund, covering the six-month period from July 1, 2009, through December 31, 2009.
Most financial assets ended 2009 with healthy returns, but short-term interest rates remained at historical lows as monetary authorities fought to bring the nation and world out of a severe recession and banking crisis.
After four consecutive quarters of contraction, the U.S. economy returned to growth during the third quarter of 2009, buoyed by greater manufacturing activity to replenish depleted inventories and satisfy export demand. The slumping housing market also showed signs of renewed life when home sales and prices rebounded modestly. However, economic headwinds remain, including a high unemployment rate and the prospect of anemic consumer spending.
While money market yields are unlikely to return to their pre-recession levels anytime soon, we continue to stress the importance of both municipal and taxable money market mutual funds as a haven of price stability and liquidity for risk-averse investors. Is your cash allocation properly positioned for the next phase of this economic cycle? Talk to your financial advisor, who can help you make that determination and prepare for the challenges and opportunities that lie ahead.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.
Thank you for your continued confidence and support.
![](https://capedge.com/proxy/N-CSRS/0000717341-10-000002/bnymmmncsrx4x2.jpg)
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
January 15, 2010
2
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DISCUSSION OF FUND PERFORMANCE
For the period of July 1, 2009, through December 31, 2009, as provided by Joseph Irace, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended December 31, 2009, Dreyfus BASIC New York Municipal Money Market Fund produced an annualized yield of 0.13%. Taking into account the effects of compounding, the fund produced an annualized effective yield of 0.13%.1
Yields of tax-exempt money market instruments remained at historically low levels during the reporting period as the Federal Reserve Board (the “Fed”) maintained an aggressively accommodative monetary policy to combat a recession and financial crisis. Supply-and-demand dynamics in the tax-exempt money markets also contributed to low yields.
The Fund’s Investment Approach
The fund seeks to provide a high level of current income exempt from federal, New York state and New York city income taxes to the extent consistent with the preservation of capital and the maintenance of liquidity.To pursue this objective, we attempt to add value by selecting the individual tax-exempt money market instruments from high-quality New York tax-exempt issuers that we believe are most likely to provide tax-exempt income.We also actively manage the fund’s weighted average maturity in anticipation of interest-rate and supply-and-demand changes in NewYork’s short-term municipal marketplace.
The management of the fund’s weighted average maturity uses a more tactical approach. If we expect the supply of securities to increase temporarily, we may reduce the fund’s weighted average maturity to make cash available for the purchase of higher yielding securities, if such securities become available.This is due to the fact that yields tend to rise temporarily if issuers are competing for investor interest. If we expect demand to surge at a time when we anticipate little issuance and therefore lower yields, we may increase the fund’s weighted average
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
maturity to maintain current yields for as long as we deem practical.At other times, we try to maintain a neutral weighted average maturity.
Economy, Supply-and-Demand Dynamics Kept Yields Low
The reporting period began in the wake of the most severe recession since the 1930s, as weak housing markets, rising unemployment and declining consumer confidence took their toll.In addition,credit markets remained fragile as they recovered from a global credit crisis that had punished major financial institutions, including dealers and insurers of municipal securities. In response, the Fed had reduced the overnight federal funds rate to an unprecedented low range of 0.00% to 0.25%.The U.S. Department of the Treasury also had initiated several remedial measures, including the Temporary Guarantee Program for Money Market Funds, which remained in effect through September 18, 2009.
Although the U.S. economy showed signs of improvement over the second half of 2009—including a return to GDP growth during the third quarter of the year—a number of headwinds remained. The unemployment rate has stayed stubbornly high, and housing markets have struggled with sluggish sales and elevated foreclosure rates. In light of a sub-par economic recovery, the Fed left short-term interest rates unchanged throughout the reporting period.
The market also was influenced by supply-and-demand factors, which exerted additional downward pressure on already low tax-exempt money market yields. Tighter lending restrictions led to a decrease in the available supply of variable-rate demand notes and tender option bonds, effectively increasing short-term funding costs for municipalities. Consequently, more issuers instead have issued longer-term bonds, including taxable securities through the government-supported Build America Bonds program. Meanwhile, demand for tax-exempt money market instruments remained robust from individuals concerned about tax increases. Due to competitive yields compared with taxable money market instruments, the tax-exempt market also saw demand from institutional investors.
Finally, like many states, NewYork has continued to face weak housing markets, rising unemployment, reduced tax collections and intensifying
4
demands on social services programs.The State of NewYork currently is experiencing severe fiscal pressures as the legislature struggles to balance the budget.
In-House Research Supported Credit Quality
We have continued to focus on direct, high-quality municipal obligations. Our credit analysts conduct in-depth, independent research into the fiscal health of the issuers we consider, a process that led us to instruments—including commercial paper and municipal notes with maturities less than six months—backed by high-quality banks, pledged tax appropriations or revenues from colleges, hospitals and public facilities providing essential services.We mostly shied away from instruments issued by entities that depend heavily on state aid.
We generally maintained the fund’s weighted average maturity in a roughly neutral position. Since yield differences have remained relatively narrow along the market’s maturity range, this conservative strategy did not adversely affect the fund’s performance.
Safety and Liquidity Are Paramount
Due to ongoing economic challenges, we believe the prudent course continues to be a conservative credit selection strategy with an emphasis on preservation of capital and liquidity.The Fed has repeatedly indicated that it is likely to keep short-term interest rates near historical lows for an extended period, suggesting that money market yields are unlikely to rise significantly anytime soon.
January 15, 2010
An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
1 Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past
performance is no guarantee of future results.Yields fluctuate. Income may be subject to state and
local taxes for non-NewYork residents, and some income may be subject to the federal alternative
minimum tax (AMT) for certain investors.Yields provided reflect the absorption of certain fund
expenses by The Dreyfus Corporation pursuant to an undertaking in effect that may be extended,
terminated or modified at any time. Had these expenses not been absorbed, the annualized yield
and annualized effective yield would have been 0.11% and 0.11%, respectively.
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus BASIC NewYork Municipal Money Market Fund from July 1, 2009 to December 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment assuming actual returns for the six months ended December 31, 2009
Expenses paid per $1,000† | $2.32 |
Ending value (after expenses) | $1,000.70 |
COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended December 31, 2009
Expenses paid per $1,000† | $2.35 |
Ending value (after expenses) | $1,022.89 |
† Expenses are equal to the fund’s annualized expense ratio of .46%, multiplied by the average account value over the
period, multiplied by 184/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS | |||||
December 31, 2009 (Unaudited) | |||||
Short-Term | Coupon | Maturity | Principal | ||
Investments—99.7% | Rate (%) | Date | Amount ($) | Value ($) | |
New York—97.5% | |||||
Albany County Airport Authority, | |||||
Airport Revenue, Refunding | |||||
(LOC; Bank of America) | 0.31 | 1/7/10 | 4,100,000 | a | 4,100,000 |
Albany Housing Authority, | |||||
Revenue (Nutgrove Garden | |||||
Apartments Project) (LOC; | |||||
Citizens Bank of Massachusetts) | 1.00 | 1/7/10 | 1,390,000 | a | 1,390,000 |
Albany Industrial Development | |||||
Agency, Civic Facility Revenue | |||||
(Corning Preserve/Hudson | |||||
Riverfront Development | |||||
Project) (LOC; Key Bank) | 0.50 | 1/7/10 | 1,245,000 | a | 1,245,000 |
Amherst Industrial Development | |||||
Agency, Multi-Mode Civic | |||||
Facility Revenue (Daemen | |||||
College Project) (LOC; | |||||
Wachovia Bank) | 0.25 | 1/7/10 | 5,800,000 | a,b | 5,800,000 |
Brookhaven-Comsewogue Union Free | |||||
School District, GO Notes, TAN | 1.25 | 4/30/10 | 1,300,000 | b | 1,303,191 |
Broome County Industrial | |||||
Development Agency, IDR | |||||
(Parlor City Paper Box | |||||
Company, Inc. Facility) (LOC; | |||||
U.S. Bank NA) | 0.42 | 1/7/10 | 2,885,000 | a | 2,885,000 |
Campbell-Savona Central School | |||||
District, GO Notes, BAN | 2.00 | 6/24/10 | 1,690,000 | b | 1,698,442 |
Cold Spring Harbor Central School | |||||
District, GO Notes, TAN | 2.00 | 6/30/10 | 1,710,000 | b | 1,722,621 |
Dutchess County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue, Refunding | |||||
(Lutheran Center at | |||||
Poughkeepsie, Inc. Project) | |||||
(LOC; Key Bank) | 0.50 | 1/7/10 | 1,800,000 | a | 1,800,000 |
East Hampton Union Free School | |||||
District, GO Notes, TAN | 1.00 | 6/30/10 | 1,660,000 | b | 1,665,063 |
East Rochester Housing Authority, | |||||
Housing Revenue (Park Ridge | |||||
Nursing Home, Inc. Project) | |||||
(LOC; JPMorgan Chase Bank) | 0.25 | 1/7/10 | 4,375,000 | a | 4,375,000 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
New York (continued) | |||||
Edgemont Union Free School | |||||
District, GO Notes, TAN | 1.00 | 1/15/10 | 1,400,000 | b | 1,400,291 |
Erie County Fiscal Stability | |||||
Authority, GO Notes, BAN | 1.25 | 7/30/10 | 1,770,000 | 1,776,909 | |
Erie County Industrial Development | |||||
Agency, IDR (Luminescent | |||||
System, Inc. Project) (LOC; | |||||
HSBC Bank USA) | 0.45 | 1/7/10 | 2,945,000 | a | 2,945,000 |
Fishkill, | |||||
GO Notes, BAN | 2.00 | 4/30/10 | 1,140,000 | 1,143,710 | |
Fort Ann, | |||||
GO Notes, BAN | 2.75 | 8/27/10 | 1,237,000 | 1,242,105 | |
Fort Plain Central School | |||||
District, GO Notes, BAN | 2.00 | 6/24/10 | 1,165,000 | b | 1,172,497 |
Heuvelton Central School District, | |||||
GO Notes, BAN | 1.50 | 6/30/10 | 1,000,000 | b | 1,004,187 |
Lancaster Industrial Development | |||||
Agency, IDR (Jiffy-Tite | |||||
Company, Inc. Project) | |||||
(LOC; Key Bank) | 0.85 | 1/7/10 | 985,000 | a | 985,000 |
Long Island Power Authority, | |||||
CP (Long Island Lighting | |||||
Company) (LOC; | |||||
JPMorgan Chase Bank) | 0.35 | 6/10/10 | 2,100,000 | 2,100,000 | |
Long Island Power Authority, | |||||
Electric System General | |||||
Revenue (Insured; Assured | |||||
Guaranty Municipal Corp. and | |||||
Liquidity Facility; Dexia | |||||
Credit Locale) | 0.28 | 1/7/10 | 10,225,000 | a | 10,225,000 |
Metropolitan Transportation | |||||
Authority, Dedicated Tax Fund | |||||
Revenue (Insured; Assured | |||||
Guaranty Municipal Corp. and | |||||
Liquidity Facility; Dexia | |||||
Credit Locale) | 0.34 | 1/7/10 | 17,600,000 | a | 17,600,000 |
Metropolitan Transportation | |||||
Authority, Transportation | |||||
Revenue (LOC; Fortis Bank) | 0.20 | 1/7/10 | 12,400,000 | a | 12,400,000 |
8
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
New York (continued) | |||||
Monroe County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (YMCA of | |||||
Greater Rochester Project) | |||||
(LOC; M&T Bank) | 0.30 | 1/7/10 | 2,400,000 | a | 2,400,000 |
Monroe County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (YMCA of | |||||
Greater Rochester Project) | |||||
(LOC; M&T Bank) | 0.30 | 1/7/10 | 5,040,000 | a | 5,040,000 |
Monroe County Industrial | |||||
Development Agency, IDR | |||||
(Mercury Print Productions, | |||||
Inc. Facility) (LOC; M&T Bank) | 1.60 | 1/7/10 | 105,000 | a | 105,000 |
Nassau County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (North Shore | |||||
Hebrew Academy High School | |||||
Project) (LOC; Banco Santander) | 0.30 | 1/7/10 | 4,480,000 | a,b | 4,480,000 |
Nassau County Industrial | |||||
Development Agency, Housing | |||||
Revenue (Rockville Centre | |||||
Housing Associates, L.P. | |||||
Project) (LOC; M&T Bank) | 0.35 | 1/7/10 | 8,000,000 | a | 8,000,000 |
New York City, | |||||
GO Notes (LOC; Bank of America) | 0.21 | 1/7/10 | 7,950,000 | a | 7,950,000 |
New York City, | |||||
GO Notes (LOC; Westdeutsche | |||||
Landesbank) | 0.60 | 1/7/10 | 6,100,000 | a | 6,100,000 |
New York City Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Abraham | |||||
Joshua Heschel High School | |||||
Project) (LOC; Allied Irish Banks) | 0.33 | 1/7/10 | 5,055,000 | a,b | 5,055,000 |
New York City Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Columbia | |||||
Grammar and Preparatory School | |||||
Project) (LOC; Allied Irish Banks) | 0.40 | 1/7/10 | 4,370,000 | a,b | 4,370,000 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
New York (continued) | |||||
New York City Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Hewitt | |||||
School Project) (LOC; Allied | |||||
Irish Banks) | 0.40 | 1/7/10 | 11,695,000 | a,b | 11,695,000 |
New York City Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue | |||||
(Spence-Chapin, Services to | |||||
Families and Children Project) | |||||
(LOC; Allied Irish Banks) | 0.40 | 1/7/10 | 3,850,000 | a | 3,850,000 |
New York City Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (The | |||||
Allen-Stevenson School | |||||
Project) (LOC; Allied Irish Banks) | 0.40 | 1/7/10 | 2,775,000 | a,b | 2,775,000 |
New York City Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue, Refunding | |||||
(Federation of Protestant | |||||
Welfare Agencies, Inc. Project) | |||||
(LOC; Allied Irish Banks) | 0.40 | 1/7/10 | 2,615,000 | a | 2,615,000 |
New York City Industrial | |||||
Development Agency, IDR (Novelty | |||||
Crystal Corporation Project) | |||||
(LOC; Commerce Bank NA) | 0.45 | 1/7/10 | 3,385,000 | a | 3,385,000 |
New York City Industrial | |||||
Development Agency, IDR | |||||
(Super-Tek Products, Inc. | |||||
Project) (LOC; Citibank NA) | 0.45 | 1/7/10 | 4,615,000 | a | 4,615,000 |
New York City Municipal Water | |||||
Finance Authority, CP | |||||
(Liquidity Facility: | |||||
Bayerische Landesbank and | |||||
Westdeutsche Landesbank) | 0.35 | 1/13/10 | 4,000,000 | 4,000,000 | |
New York City Transitional Finance | |||||
Authority, Future Tax | |||||
Secured Revenue | 5.50 | 2/1/10 | 400,000 | 401,677 | |
New York City Transitional Finance | |||||
Authority, Future Tax Secured | |||||
Revenue (Liquidity Facility; | |||||
Westdeutsche Landesbank) | 0.28 | 1/7/10 | 4,100,000 | a | 4,100,000 |
10
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
New York (continued) | |||||
New York Liberty Development | |||||
Corporation, Multi-Modal | |||||
Liberty Revenue (World Trade | |||||
Center Project) | 0.50 | 1/18/11 | 8,000,000 | 8,000,000 | |
New York Local Government | |||||
Assistance Corporation, Revenue | |||||
(LOC: Bayerische Landesbank and | |||||
Westdeutshe Landesbank) | 0.40 | 1/7/10 | 6,425,000 | a | 6,425,000 |
New York State Dormitory | |||||
Authority, Consolidated Service | |||||
Contract Revenue, Refunding | 1.50 | 7/1/10 | 2,505,000 | b | 2,518,780 |
New York State Dormitory | |||||
Authority, Revenue (Mount | |||||
Saint Mary College) (LOC; | |||||
JPMorgan Chase Bank) | 0.23 | 1/7/10 | 8,700,000 | a,b | 8,700,000 |
New York State Dormitory | |||||
Authority, Revenue (Park Ridge | |||||
Hospital, Inc.) (LOC; JPMorgan | |||||
Chase Bank) | 0.25 | 1/7/10 | 5,725,000 | a | 5,725,000 |
New York State Housing Finance | |||||
Agency, Housing Revenue | |||||
(Baisley Park Gardens) | |||||
(LOC; Citibank NA) | 0.25 | 1/7/10 | 4,700,000 | a | 4,700,000 |
New York State Housing Finance | |||||
Agency, Housing Revenue | |||||
(Gateway to New Cassel Project) | |||||
(LOC; JPMorgan Chase Bank) | 0.24 | 1/7/10 | 3,800,000 | a | 3,800,000 |
New York State Thruway Authority, | |||||
Highway and Bridge Trust | |||||
Fund Revenue | 5.25 | 4/1/10 | 1,000,000 | 1,011,995 | |
New York State Thruway Authority, | |||||
Second General Highway and | |||||
Bridge Trust Fund Revenue | 3.15 | 4/1/10 | 1,500,000 | 1,510,371 | |
New York State Thruway Authority, | |||||
Second General Highway and | |||||
Bridge Trust Fund Revenue | 5.00 | 4/1/10 | 725,000 | 732,809 | |
Newburgh Industrial Development | |||||
Agency, Civic Facility Revenue | |||||
(Community Development | |||||
Properties Dubois Street II, Inc. | |||||
Project) (LOC; Key Bank) | 0.50 | 1/7/10 | 9,990,000 | a | 9,990,000 |
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
New York (continued) | |||||
Ontario County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (CHF-Finger | |||||
Lakes, L.L.C. Civic Facility) | |||||
(LOC; RBS Citizens NA) | 0.53 | 1/7/10 | 1,025,000 | a | 1,025,000 |
Otsego County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Noonan | |||||
Community Service Corporation | |||||
Project) (LOC; FHLB) | 0.36 | 1/7/10 | 1,820,000 | a | 1,820,000 |
Otsego County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Saint James | |||||
Retirement Community Project) | |||||
(LOC; M&T Bank) | 0.30 | 1/7/10 | 1,940,000 | a | 1,940,000 |
Port Authority of New York and New | |||||
Jersey, Equipment Notes | 0.31 | 1/7/10 | 4,000,000 | a | 4,000,000 |
Rockland County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Dominican | |||||
College of Blauvelt Project) | |||||
(LOC; Commerce Bank NA) | 0.24 | 1/7/10 | 6,215,000 | a,b | 6,215,000 |
Rockland County Industrial | |||||
Development Agency, IDR | |||||
(Intercos America, Inc. | |||||
Project) (LOC; HSBC Bank USA) | 0.45 | 1/7/10 | 3,400,000 | a | 3,400,000 |
Rockland County Industrial | |||||
Development Authority, Revenue | |||||
(Northern Manor Multicare | |||||
Center, Inc. Project) (LOC; | |||||
M&T Bank) | 0.35 | 1/7/10 | 2,870,000 | a | 2,870,000 |
Saint Lawrence County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue | |||||
(Canton-Potsdam Hospital | |||||
Project) (LOC; Key Bank) | 0.50 | 1/7/10 | 9,945,000 | a | 9,945,000 |
Smithtown Central School District, | |||||
GO Notes, TAN | 1.00 | 6/25/10 | 3,230,000 | b | 3,238,808 |
Susquehanna Valley Central School | |||||
District, GO Notes, BAN | 1.50 | 7/30/10 | 1,000,000 | b | 1,004,598 |
12
Short-Term | Coupon | Maturity | Principal | ||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
New York (continued) | |||||
Syracuse Industrial Development | |||||
Agency, Civic Facility Revenue | |||||
(Crouse Health Hospital, Inc. | |||||
Project) (LOC; Key Bank) | 0.50 | 1/7/10 | 3,410,000 | a | 3,410,000 |
Three Village Central School | |||||
District, GO Notes, TAN | 1.00 | 6/30/10 | 2,275,000 | b | 2,281,268 |
Tompkins County Industrial | |||||
Development Agency, Civic | |||||
Facility Revenue (Tompkins | |||||
Cortland Community College | |||||
Foundation, Inc. Project) | |||||
(LOC; HSBC Bank USA) | 0.60 | 1/7/10 | 3,735,000 | a,b | 3,735,000 |
Valhalla Union Free School | |||||
District, GO Notes, TAN | 1.00 | 2/2/10 | 1,000,000 | b | 1,000,311 |
Westchester County Health Care | |||||
Corporation, CP (Liquidity | |||||
Facility; JPMorgan Chase Bank | |||||
and LOC; Westchester County) | 0.55 | 2/10/10 | 5,000,000 | 5,000,000 | |
U.S. Related—2.2% | |||||
Puerto Rico Industrial, Tourist, | |||||
Educational, Medical and | |||||
Environmental Control | |||||
Facilities Financing Authority, | |||||
Environmental Control Facilities | |||||
Revenue (Bristol-Myers Squibb | |||||
Company Project) | 0.35 | 1/7/10 | 4,400,000 | a | 4,400,000 |
Puerto Rico Sales Tax Financing | |||||
Corporation, Sales Tax Revenue | |||||
(Liquidity Facility; Citibank NA) | 0.25 | 1/7/10 | 1,550,000 | a,c | 1,550,000 |
Total Investments (cost $272,864,633) | 99.7% | 272,864,633 | |||
Cash and Receivables (Net) | .3% | 855,026 | |||
Net Assets | 100.0% | 273,719,659 |
a Variable rate demand note—rate shown is the interest rate in effect at December 31, 2009. Maturity date represents
the next demand date, or the ultimate maturity date if earlier.
b At December 31, 2009, the fund had $72,835,057 or 26.6% of net assets invested in securities whose payment of
principal and interest is dependent upon revenues generated from education.
c Security exempt from registration under Rule 144A of the Securities Act of 1933.This security may be resold in
transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2009, this security
amounted to $1,550,000 or 0.6% of net assets.
The Fund 13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Summary of Abbreviations | |||
ABAG | Association of Bay Area Governments | ACA | American Capital Access |
AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
AMBAC | American Municipal Bond | ARRN | Adjustable Rate Receipt Notes |
Assurance Corporation | |||
BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
CP | Commercial Paper | EDR | Economic Development Revenue |
EIR | Environmental Improvement Revenue | FGIC | Financial Guaranty Insurance |
Company | |||
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage | FNMA | Federal National |
Corporation | Mortgage Association | ||
GAN | Grant Anticipation Notes | GIC | Guaranteed Investment Contract |
GNMA | Government National | GO | General Obligation |
Mortgage Association | |||
HR | Hospital Revenue | IDB | Industrial Development Board |
IDC | Industrial Development Corporation | IDR | Industrial Development Revenue |
LOC | Letter of Credit | LOR | Limited Obligation Revenue |
LR | Lease Revenue | MFHR | Multi-Family Housing Revenue |
MFMR | Multi-Family Mortgage Revenue | PCR | Pollution Control Revenue |
PILOT | Payment in Lieu of Taxes | RAC | Revenue Anticipation Certificates |
RAN | Revenue Anticipation Notes | RAW | Revenue Anticipation Warrants |
RRR | Resources Recovery Revenue | SAAN | State Aid Anticipation Notes |
SBPA | Standby Bond Purchase Agreement | SFHR | Single Family Housing Revenue |
SFMR | Single Family Mortgage Revenue | SONYMA State of New York Mortgage Agency | |
SWDR | Solid Waste Disposal Revenue | TAN | Tax Anticipation Notes |
TAW | Tax Anticipation Warrants | TRAN | Tax and Revenue Anticipation Notes |
XLCA | XL Capital Assurance |
14
Summary of Combined Ratings (Unaudited) | |||||
Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† |
F1+,F1 | VMIG1,MIG1,P1 | SP1+,SP1,A1+,A1 | 84.8 | ||
AAA,AA,Ad | Aaa,Aa,Ad | AAA,AA,Ad | 3.9 | ||
Not Ratede | Not Ratede | Not Ratede | 11.3 | ||
100.0 |
† Based on total investments.
d Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers.
e Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to
be of comparable quality to those rated securities in which the fund may invest.
See notes to financial statements.
The Fund 15
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2009 (Unaudited)
Cost | Value | |
Assets ($): | ||
Investments in securities—See Statement of Investments | 272,864,633 | 272,864,633 |
Cash | 858,614 | |
Interest receivable | 191,365 | |
273,914,612 | ||
Liabilities ($): | ||
Due to The Dreyfus Corporation and affiliates—Note 2 | 94,851 | |
Dividend payable | 102 | |
Payable for shares of Beneficial Interest redeemed | 100,000 | |
194,953 | ||
Net Assets ($) | 273,719,659 | |
Composition of Net Assets ($): | ||
Paid-in capital | 273,719,659 | |
Net Assets ($) | 273,719,659 | |
Shares Outstanding | ||
(unlimited number of shares of Beneficial Interest authorized) | 273,719,669 | |
Net Asset Value, offering and redemption price per share ($) | 1.00 | |
See notes to financial statements. |
16
STATEMENT OF OPERATIONS | |
Six Months Ended December 31, 2009 (Unaudited) | |
Investment Income ($): | |
Interest Income | 886,997 |
Expenses: | |
Management fee—Note 2 | 676,848 |
Treasury insurance expense—Note 1(f) | 29,437 |
Trustees’ fees—Note 2 | 8,883 |
Total Expenses | 715,168 |
Less—reduction in expenses due to undertaking—Note 2 | (19,782) |
Less—Trustees’ fees reimbursed by the Manager—Note 2 | (8,883) |
Net Expenses | 686,503 |
Investment Income—Net, representing net increase | |
in net assets resulting from operations | 200,494 |
See notes to financial statements. |
The Fund 17
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||
December 31, 2009 | Year Ended | |
(Unaudited) | June 30, 2009 | |
Operations ($): | ||
Investment Income-Net, representing net increase | ||
in net assets resulting from operations | 200,494 | 4,422,312 |
Dividends to Shareholders from ($): | ||
Investment income—net | (200,494) | (4,446,801) |
Beneficial Interest Transactions ($1.00 per share): | ||
Net proceeds from shares sold | 87,955,897 | 300,382,134 |
Dividends reinvested | 151,488 | 3,316,910 |
Cost of shares redeemed | (117,826,299) | (364,356,807) |
Increase (Decrease) in Net Assets from | ||
Beneficial Interest Transactions | (29,718,914) | (60,657,763) |
Total Increase (Decrease) in Net Assets | (29,718,914) | (60,682,252) |
Net Assets ($): | ||
Beginning of Period | 303,438,573 | 364,120,825 |
End of Period | 273,719,659 | 303,438,573 |
See notes to financial statements. |
18
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
December 31, 2009 | Year Ended June 30, | |||||
(Unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 | |
Per Share Data ($): | ||||||
Net asset value, | ||||||
beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Investment Operations: | ||||||
Investment income—net | .001 | .013 | .026 | .032 | .025 | .013 |
Distributions: | ||||||
Dividends from | ||||||
investment income—net | (.001) | (.013) | (.026) | (.032) | (.025) | (.013) |
Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
Total Return (%) | .14a | 1.35 | 2.67 | 3.25 | 2.52 | 1.34 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | ||||||
to average net assets | .48a | .49 | .46 | .45 | .45 | .45 |
Ratio of net expenses | ||||||
to average net assets | .46a | .48 | .45 | .45 | .45 | .45 |
Ratio of net investment income | ||||||
to average net assets | .13a | 1.37 | 2.61 | 3.21 | 2.49 | 1.33 |
Net Assets, end of period | ||||||
($ x 1,000) | 273,720 | 303,439 | 364,121 | 321,893 | 286,993 | 308,322 |
a Annualized. | ||||||
See notes to financial statements. |
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus BASIC New York Municipal Money Market Fund (the “fund”) is a separate non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the “Trust”) which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company, currently offering three series including the fund.The fund’s investment objective is to provide a high level of current income exempt from federal, NewYork state and NewYork city income taxes to the extent consistent with the preservation of capital and the maintenance of liquidity. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. MBSC Securities Corporation (the “Distributor”), a wholly-owned subsi diary of the Manager, is the distributor of the fund’s shares, which are sold without a sales charge.
It is the fund’s policy to maintain a continuous net asset value per share of $1.00 for the fund; the fund has adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) has become the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The ASC has superseded all existing non-SEC accounting and reporting standards. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
20
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the Board of Trustees to represent the fair value of the fund’s investments.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
cost, in accordance with rules under the Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The following is a summary of the inputs used as of December 31, 2009 in valuing the fund’s investments:
Short-Term | |
Valuation Inputs | Investments ($)† |
Level 1—Unadjusted Quoted Prices | — |
Level 2—Other Significant Observable Inputs | 272,864,633 |
Level 3—Significant Unobservable Inputs | — |
Total | 272,864,633 |
† See Statement of Investments for additional detailed categorizations.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Cost of investments represents amortized cost.
(c) Concentration of risk: The fund follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the fund.
All cash balances were maintained with the Custodian,The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus.
(d) 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 gains, if any, 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 of 1986, as amended, (the “Code”).To the
22
extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains.
(e) 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 Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended December 31, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended June 30, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended June 30, 2009 was as follows: tax exempt income $4,422,312 and ordinary income $24,489.The tax character of current year distributions will be determined at the end of the current fiscal year.
At December 31, 2009, 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).
(f) Treasury’s Temporary Guarantee Program: The fund entered into a Guarantee Agreement with the United States Department of the Treasury (the “Treasury”) to participate in the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”).
Under the Program, the Treasury guaranteed the share price of shares of the fund held by shareholders as of September 19, 2008 at $1.00 per share if the fund’s net asset value per share fell below $0.995 (a
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
“Guarantee Event”) and the fund liquidated. Recovery under the Program was subject to certain conditions and limitations.
Fund shares acquired by investors after September 19, 2008 that increased the number of fund shares the investor held at the close of business on September 19, 2008 were not eligible for protection under the Program. In addition, fund shares acquired by investors who did not hold fund shares at the close of business on September 19, 2008 were not eligible for protection under the Program.
The Program, which was originally set to expire on December 18, 2008, was initially extended by the Treasury until April 30, 2009 and had been further extended by the Treasury until September 18, 2009, at which time the Secretary of the Treasury terminated the Program.As such, the fund is no longer eligible for protection under the Program. Participation in the initial term and the two extended periods of the Program required payments to the Treasury in the amounts of .01%, .015% and .015%, respectively, of the fund’s shares outstanding as of September 19, 2008 (valued at $1.00 per share).This expense was borne by the fund without regard to any expense limitation in effect.
NOTE 2—Investment Management Fee and Other Transactions with Affiliates:
Pursuant to an investment management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund.The Manager also directs the investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .45% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage fees, taxes, interest, fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-intereste d
24
Trustees (including counsel fees). Prior to January 1, 2010, each Board member received $45,000 per year, plus $6,000 for each joint Board meeting of the Trust, The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Funds Trust, Dreyfus Investment Funds and Dreyfus Fund, Inc. (collectively, the “Board Group Open-End Funds”) attended, $2,000 for separate in-person committee meetings attended which were not held in conjunction with a regularly scheduled Board meeting and $1,500 for Board meetings and separate committee meetings attended that were conducted by telephone. Effective January 1, 2010, the Board Group Open-End Funds will pay each Board member who is not an “interested person” of theTrust (as defined in the 1940 Act) $60,000 per annum, plus $7,000 per joint Board Group Open-End Funds Board meeting attended, $2,500 for separate in-person committee meetings attended which are not held in conjunction with a regularly scheduled Board meeting and $2,000 for Board meetings and separate committee meetings attended that are conducted by telephone.The Board Group Open-End Funds also reimburse each Board member who is no an “interested person” of the Trust (as defined in the 1940 Act) for travel and out-of-pocket expenses. With respect to Board meetings, the Chairman of the Board receives an additional 25% of such compensation (with the exception of reimbursable amounts). With respect to compensation committee meetings prior to January 1, 2010, the Chair of the compensation committee received $900 per compensation committee meeting, and, effective January 1, 2010, the Chair of each of the Board’s committees, unless the Chair also serves as Chair of the Board, will receive $1,350 per applicable committee meeting. In the event that there is an in-person joint committee meeting or a joint telephone meeting of the Board Group Open-End Funds and Dreyfus HighYield Strategies Fund, the $2,000 or $1,500 fee (p rior to January 1, 2010) or the $2,500 or $2,000 fee (effective January 1, 2010), as applicable, is allocated between the Board Group Open-End Funds and Dreyfus High Yield Strategies Fund.The Trust’s portion of these fees and expenses are charged and allocated to each series based on net assets. Amounts
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
required to be paid by the Trust directly to the non-interested Trustees, that would be applied to offset a portion of the management fee payable to the Manager, are in fact paid directly by the Manager to the non-interested Trustees.
The Manager has undertaken to reimburse expenses in the event that current yields drop below a certain level.This undertaking is voluntary and not contractual and may be terminated at any time.The reduction in expenses, pursuant to the undertaking, amounted to $19,782 during the period ended December 31, 2009.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $94,851.
NOTE 3—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
26
NOTES
For More Information
![](https://capedge.com/proxy/N-CSRS/0000717341-10-000002/bnymmmncsrx32x1.jpg)
Telephone 1-800-645-6561
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 E-mail Send your request to info@dreyfus.com Internet Information can be viewed online or downloaded at: http://www.dreyfus.com
The fund will disclose daily, on www.dreyfus.com, the fund’s complete schedule of holdings as of the end of the previous business day. The schedule of holdings will remain on the website until the fund files its Form N-Q or Form N-CSR for the period that includes the date of the posted holdings.
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund's Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information regarding how the fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-645-6561.
© 2010 MBSC Securities Corporation |
Item 2. | Code of Ethics. |
Not applicable. | |
Item 3. | Audit Committee Financial Expert. |
Not applicable. | |
Item 4. | Principal Accountant Fees and Services. |
Not applicable. | |
Item 5. | Audit Committee of Listed Registrants. |
Not applicable. | |
Item 6. | Investments. |
(a) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management |
Investment Companies. | |
Not applicable. | |
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable. | |
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Companies and |
Affiliated Purchasers. | |
Not applicable. [CLOSED END FUNDS ONLY] | |
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures applicable to Item 10. | |
Item 11. | Controls and Procedures. |
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
3
(b) There were no changes to the Registrant's internal control over financial reporting that occurred
during the second fiscal quarter of the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a)
under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b)
under the Investment Company Act of 1940.
4
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.
The Dreyfus/Laurel Tax-Free Municipal Funds
By: | /s/ Bradley J. Skapyak |
Bradley J. Skapyak, | |
President | |
Date: | February 19, 2010 |
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: | /s/ Bradley J. Skapyak |
Bradley J. Skapyak, | |
President | |
Date: | February 19, 2010 |
By: | /s/ James Windels |
James Windels, | |
Treasurer | |
Date: | February 19, 2010 |
5
EXHIBIT INDEX |
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a- |
2(a) under the Investment Company Act of 1940. (EX-99.CERT) |
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
6