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- 4765 |
| |
| Dreyfus New York AMT-Free Municipal Bond Fund | |
| (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) | |
| | |
| Janette E. Farragher, 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: | 11/30 | |
Date of reporting period: | 11/30/12 | |
| | | | | | | |
FORM N-CSR
Item 1. Reports to Stockholders.
|
| Dreyfus |
| New York AMT-Free |
| Municipal Money |
| Market Fund |
SEMIANNUAL REPORT November 30, 2012
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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.
|
| Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
| | Contents |
| | THE FUND |
| 2 | A Letter from the President |
| 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 |
| 27 | Information About the Renewal of the Fund’s Management Agreement |
| | FOR MORE INFORMATION |
| | Back Cover |
Dreyfus New York
AMT-Free Municipal
Money Market Fund
The Fund
A LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus New York AMT-Free Money Market Fund, covering the six-month period from June 1, 2012, through November 30, 2012. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Despite pronounced weakness during the spring of 2012, most financial markets advanced over the reporting period as investors responded to encouraging macroeconomic developments throughout the world. Employment gains in the United States, credible measures to prevent a more severe banking crisis in Europe, and the likelihood of a “soft landing” for China’s economy buoyed investor sentiment, as did aggressively accommodative monetary policies from central banks in the United States, Europe, Japan and China. However, as has been the case since December 2008, short-term interest rates and money market yields remained near historical lows in the United States.
In light of the easy monetary policies adopted by many countries, we expect the U.S. economic recovery to persist at subpar levels over the first half of 2013, as growth may remain constrained by uncertainties surrounding fiscal policy and tax reforms. However, a favorable resolution of the fiscal debate may prompt corporate decision-makers to increase capital spending, which could have positive implications for the U.S. economy and domestic equity markets later in the year. Nonetheless, the Federal Reserve Board has signaled its intention to keep rates low at least through mid-2015, suggesting that substantially higher money market yields are unlikely anytime soon. As always, we encourage you to stay in touch with your financial advisor as new developments unfold.
Thank you for your continued confidence and support.
Sincerely,
J. Charles Cardona
President
The Dreyfus Corporation
December 17, 2012
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2012, through November 30, 2012, as provided by Bill Vasiliou, Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended November 30, 2012, Dreyfus NewYork AMT-Free 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 stayed near historical lows throughout the reporting period, as short-term interest rates remained anchored by a federal funds rate between 0% and 0.25%.
The Fund’s Investment Approach
The fund seeks as high a level of current income exempt from federal, NewYork state and NewYork city income taxes as is consistent with the preservation of capital and the maintenance of liquidity.To pursue its goal, the fund normally invests substantially all of its net assets in short-term, high-quality municipal obligations that provide income exempt from federal, New York state and New York city income taxes.The fund also seeks to provide income exempt from the federal Alternative Minimum Tax. The fund’s investments include municipal notes, short-term municipal bonds, tax-exempt commercial paper and municipal leases. The fund may also invest in high-quality, short-term structured notes, which are derivative instruments whose value is tied to underlying municipal obligations.
In pursuing this objective, we employ two primary strategies. First, we normally attempt to add value by constructing a diverse portfolio of high-quality municipal obligations that provide income exempt from federal, NewYork state and NewYork city personal income taxes. Second, we actively manage the fund’s average maturity based on our anticipation of supply-and-demand changes in NewYork’s short-term municipal marketplace.
DISCUSSION OF FUND PERFORMANCE (continued)
For example, if we expect an increase in short-term supply, we may decrease the average maturity of the fund, which could enable us to take advantage of opportunities when short-term supply increases. Generally, yields tend to rise when there is an increase in new-issue supply competing for investor interest. New securities, which generally are issued with maturities in the one-year range, may in turn lengthen the fund’s average maturity if purchased. If we anticipate limited new-issue supply, we may then look to extend the fund’s average maturity to maintain then-current yields for as long as we believe practical. In addition, we try to maintain an average maturity that reflects our view of short-term interest-rate trends and future supply-and-demand considerations.
Economic Recovery Gained Traction
The reporting period began amid weakness in the U.S. economy stemming from declining employment growth and the ongoing European debt crisis. Fortunately, these worries proved to be relatively short-lived, as economists were soon cheered by better employment numbers, an extension of the Federal Reserve Board’s (the “Fed”) Operation Twist, and assurances of support for the euro by the European Central Bank. Later, the Fed embarked on a third round of quantitative easing and extended its forecast for low interest rates through mid-2015.These actions appeared to be effective, as U.S. GDP growth climbed from a 1.3% annualized rate for the second quarter of 2012 to 2.7% for the third quarter.
With short-term interest rates near historical lows, demand from individual investors for municipal securities shifted to the municipal bond market, where yields were incrementally higher. However, any reduction in demand for shorter-term, tax-exempt money market instruments from individuals was offset by the effects of higher rates on short-term repurchase agreements, which helped to boost yields of variable rate demand notes (VRDNs). As a result, municipal money market instruments generally provided higher yields than comparable U.S.Treasury obligations, sparking increased demand from non-traditional investors, including institutional investors and corporations. Non-traditional investors also favored municipal money market instruments due to regulatory changes affecting liquidity requirements.
From a credit quality perspective, New York has continued to shore up its credit fundamentals by making the difficult decisions required to balance its budget and reform its tax code.
4
Focusing on Quality and Liquidity
Most tax-exempt money market funds maintained relatively short weighted average maturities compared to historical averages.With narrow yield differences along the money market’s maturity range, it made little sense to extend weighted average maturities. A desire for ready liquidity amid ongoing regulatory uncertainty also contributed to the industry’s preference for shorter weighted average maturities. The fund was no exception to these considerations, and we maintained its weighted average maturity in a range we consider to be consistent with industry averages.
Careful and well-researched credit selection remained key over the reporting period.We generally favored state general obligation bonds, essential service revenue bonds, and certain local credits with strong financial positions and stable tax bases. We continued to shy away from instruments issued by localities that depend heavily on state aid.
Rates Likely to Stay Low
We are cautiously optimistic regarding the prospects for economic growth.While the Fed expects moderate economic growth and a gradually declining unemployment rate, it also made clear that short-term interest rates are likely to remain low until the unemployment rate drops well below current levels. Consequently, we believe that the prudent course continues to be an emphasis on preservation of capital and liquidity.
December 17, 2012
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.
Short-term municipal securities holdings involve credit and liquidity risks and risk of principal loss.
|
| 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. |
| 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, fund yields would have been lower. |
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 New York AMT-Free Municipal Money Market Fund from June 1, 2012 to November 30, 2012. 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 November 30, 2012
| | |
| Expenses paid per $1,000† | $ | 1.30 |
| 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 November 30, 2012
| | |
| Expenses paid per $1,000† | $ | 1.32 |
| Ending value (after expenses) | $ | 1,023.76 |
|
| † Expenses are equal to the fund’s annualized expense ratio of .26%, multiplied by the average account value over the |
| period, multiplied by 183/365 (to reflect the one-half year period). |
STATEMENT OF INVESTMENTS
November 30, 2012 (Unaudited)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments—99.6% | Rate (%) | Date | Amount ($) | | Value ($) |
| New York—96.5% | | | | | |
| Albany Industrial Development | | | | | |
| Agency, Civic Facility Revenue | | | | | |
| (Renaissance Corporation of | | | | | |
| Albany Project) (LOC; M&T Trust) | 0.21 | 12/7/12 | 2,390,000 | a | 2,390,000 |
| Albany Industrial Development | | | | | |
| Agency, Civic Facility Revenue | | | | | |
| (The College of Saint Rose | | | | | |
| Project) (LOC; Wells Fargo Bank) | 0.17 | 12/7/12 | 3,550,000 | a,b | 3,550,000 |
| Albany Industrial Development | | | | | |
| Agency, Civic Facility Revenue | | | | | |
| (The College of Saint Rose Project) | | | | | |
| (LOC; Wells Fargo Bank) | 0.17 | 12/7/12 | 6,800,000 | a,b | 6,800,000 |
| Auburn, | | | | | |
| GO Notes, BAN | 1.00 | 5/31/13 | 2,900,000 | | 2,907,204 |
| Auburn City School District, | | | | | |
| GO Notes, BAN | 1.00 | 6/26/13 | 2,000,000 | b | 2,005,309 |
| Ausable Valley Central School | | | | | |
| District, GO Notes, BAN | 1.50 | 4/5/13 | 2,140,000 | b | 2,145,607 |
| Bleecker Terrace Housing | | | | | |
| Development Corporation, | | | | | |
| Housing Development Revenue | | | | | |
| (Bleecker Terrace Apartments | | | | | |
| Project) (LOC; FHLB) | 0.26 | 12/7/12 | 935,000 | a | 935,000 |
| Brookhaven Industrial Development | | | | | |
| Agency, Civic Facility Revenue | | | | | |
| (The Methodist Retirement | | | | | |
| Community Development | | | | | |
| Corporation Civic Facility) | | | | | |
| (LOC; U.S. Bank NA) | 0.17 | 12/7/12 | 2,000,000 | a | 2,000,000 |
| Campbell-Savona Central School | | | | | |
| District, GO Notes, BAN | 1.50 | 6/21/13 | 1,175,000 | b | 1,180,358 |
| Cayuga County, | | | | | |
| GO Notes, BAN | 1.25 | 2/8/13 | 1,000,000 | | 1,001,217 |
| Chautauqua Lake Central School | | | | | |
| District, GO Notes, BAN | 1.25 | 6/27/13 | 2,315,000 | b | 2,321,543 |
| Dutchess County Industrial | | | | | |
| Development Agency, Revenue | | | | | |
| (Trinity-Pawling School | | | | | |
| Corporation Civic Facility) | | | | | |
| (LOC; PNC Bank NA) | 0.18 | 12/7/12 | 1,110,000 | a,b | 1,110,000 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| New York (continued) | | | | | |
| Franklin County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Trudeau | | | | | |
| Institute, Inc. Project) | | | | | |
| (LOC; HSBC Bank USA) | 0.23 | 12/7/12 | 1,140,000 | a | 1,140,000 |
| Hamburg Central School District, | | | | | |
| GO Notes, BAN | 1.50 | 6/14/13 | 3,790,000 | b | 3,807,292 |
| Hannibal Central School District, | | | | | |
| GO Notes | 2.00 | 6/15/13 | 1,085,000 | b | 1,092,853 |
| Hastings-On-Hudson, | | | | | |
| GO Notes, BAN | 1.25 | 9/27/13 | 3,342,000 | | 3,356,998 |
| Heuvelton Central School District, | | | | | |
| GO Notes, BAN | 1.50 | 6/28/13 | 1,150,000 | b | 1,153,582 |
| Hornell City School District, | | | | | |
| GO Notes, BAN | 1.25 | 6/28/13 | 2,100,000 | b | 2,106,566 |
| Monroe County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (The Glen at | | | | | |
| Cherry Ridge, LLC Project) | | | | | |
| (LOC; HSBC Bank USA) | 0.18 | 12/7/12 | 8,610,000 | a | 8,610,000 |
| Monroe County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (YMCA of | | | | | |
| Greater Rochester Project) | | | | | |
| (LOC; M&T Trust) | 0.21 | 12/7/12 | 6,110,000 | a | 6,110,000 |
| Monroe County Industrial | | | | | |
| Development Agency, Revenue | | | | | |
| (HDF-RWC Project 1, LLC— | | | | | |
| Robert Weslayan College | | | | | |
| Project) (LOC; M&T Trust) | 0.22 | 12/7/12 | 2,280,000 | a,b | 2,280,000 |
| Monroe County Industrial | | | | | |
| Development Agency, Revenue | | | | | |
| (Monroe Community College | | | | | |
| Association, Inc. Project) | | | | | |
| (LOC; JPMorgan Chase Bank) | 0.18 | 12/7/12 | 1,025,000 | a,b | 1,025,000 |
| Monroe County Industrial | | | | | |
| Development Corporation, | | | | | |
| Revenue (Saint Ann’s Home for | | | | | |
| the Aged Project) (LOC; | | | | | |
| HSBC Bank USA) | 0.20 | 12/7/12 | 3,095,000 | a | 3,095,000 |
8
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| New York (continued) | | | | | |
| Naples Central School District, | | | | | |
| GO Notes, BAN | 1.00 | 6/28/13 | 1,700,000 | b | 1,704,070 |
| Nassau County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Saint Mary’s | | | | | |
| Children Project) (LOC; TD Bank) | 0.25 | 12/7/12 | 1,085,000 | a | 1,085,000 |
| New York City, | | | | | |
| GO Notes (LOC; California | | | | | |
| Public Employees | | | | | |
| Retirement System) | 0.18 | 12/3/12 | 13,395,000 | a | 13,395,000 |
| New York City Capital Resource | | | | | |
| Corporation, Revenue (Loan | | | | | |
| Enhanced Assistance Program— | | | | | |
| Cobble Hill Health Center, Inc. | | | | | |
| Project) (LOC; Bank of America) | 0.23 | 12/7/12 | 3,500,000 | a | 3,500,000 |
| New York City Capital Resource | | | | | |
| Corporation, Revenue (Loan | | | | | |
| Enhanced Assistance Program— | | | | | |
| Natural Resources Defense | | | | | |
| Council, Inc. Project) (LOC; | | | | | |
| Bank of America) | 0.21 | 12/7/12 | 1,000,000 | a | 1,000,000 |
| New York City Capital Resource | | | | | |
| Corporation, Revenue (Loan | | | | | |
| Enhanced Assistance Program— | | | | | |
| Poly Prep Country Day School | | | | | |
| Project) (LOC; Bank of America) | 0.23 | 12/7/12 | 3,550,000 | a,b | 3,550,000 |
| New York City Capital Resource | | | | | |
| Corporation, Revenue (Loan | | | | | |
| Enhanced Assistance Program— | | | | | |
| Village Center for Care Project) | | | | | |
| (LOC; Bank of America) | 0.21 | 12/7/12 | 1,500,000 | a | 1,500,000 |
| New York City Industrial | | | | | |
| Development Agency, Civic Facility | | | | | |
| Revenue (Birch Wathen Lenox | | | | | |
| School Project) (LOC; TD Bank) | 0.24 | 12/7/12 | 3,300,000 | a,b | 3,300,000 |
| New York City Industrial | | | | | |
| Development Agency, Civic Facility | | | | | |
| Revenue (Children’s Oncology | | | | | |
| Society of New York, Inc. Project) | | | | | |
| (LOC; JPMorgan Chase Bank) | 0.19 | 12/7/12 | 4,000,000 | a | 4,000,000 |
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 (French | | | | | |
| Institute-Alliance Francaise | | | | | |
| de New York—Federation | | | | | |
| of French Alliances in | | | | | |
| the United States Project) | | | | | |
| (LOC; M&T Trust) | 0.22 | 12/7/12 | 1,400,000 | a,b | 1,400,000 |
| New York City Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Professional | | | | | |
| Children’s School, Inc. Project) | | | | | |
| (LOC; Wells Fargo Bank) | 0.24 | 12/7/12 | 1,600,000 | a,b | 1,600,000 |
| New York City Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Village | | | | | |
| Community School Project) | | | | | |
| (LOC; TD Bank) | 0.28 | 12/7/12 | 800,000 | a,b | 800,000 |
| New York City Municipal Water | | | | | |
| Finance Authority, Water and | | | | | |
| Sewer System Second General | | | | | |
| Resolution Revenue (Liquidity | | | | | |
| Facility; Bank of Nova Scotia) | 0.19 | 12/3/12 | 1,100,000 | a | 1,100,000 |
| New York City Municipal Water | | | | | |
| Finance Authority, Water and | | | | | |
| Sewer System Second General | | | | | |
| Resolution Revenue (Liquidity | | | | | |
| Facility; California State | | | | | |
| Teachers Retirement System) | 0.18 | 12/3/12 | 14,445,000 | a | 14,445,000 |
| New York Liberty Development | | | | | |
| Corporation, Liberty Revenue, | | | | | |
| Refunding (3 World Trade | | | | | |
| Center Project) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.19 | 12/7/12 | 6,005,000 | a | 6,005,000 |
| New York State Dormitory | | | | | |
| Authority, Revenue (Beverwyck, | | | | | |
| Inc.) (LOC; Bank of America) | 0.23 | 12/7/12 | 2,600,000 | a | 2,600,000 |
| New York State Dormitory | | | | | |
| Authority, Revenue (Mount | | | | | |
| Saint Mary College) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.18 | 12/7/12 | 2,465,000 | a,b | 2,465,000 |
10
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| New York (continued) | | | | | |
| New York State Dormitory | | | | | |
| Authority, State Personal | | | | | |
| Income Tax Revenue (Economic | | | | | |
| Development and Housing) | 5.00 | 12/15/12 | 500,000 | | 501,002 |
| New York State Housing Finance | | | | | |
| Agency, Housing Revenue | | | | | |
| (Baisley Park Gardens) | | | | | |
| (LOC; Citibank NA) | 0.26 | 12/7/12 | 7,535,000 | a | 7,535,000 |
| Niagara Area Development | | | | | |
| Corporation, Revenue, | | | | | |
| Refunding (Niagara University | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.18 | 12/7/12 | 2,700,000 | a,b | 2,700,000 |
| Niagara Wheatfield Central School | | | | | |
| District, GO Notes, BAN | | | | | |
| (Various Improvements) | 1.50 | 3/27/13 | 1,085,000 | b | 1,087,910 |
| Odessa-Montour Central School | | | | | |
| District, GO Notes, BAN | 1.50 | 6/14/13 | 1,345,000 | b | 1,351,065 |
| Oswego County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Springside | | | | | |
| at Seneca Hill, Inc. Project) | | | | | |
| (LOC; M&T Trust) | 0.26 | 12/7/12 | 2,130,000 | a | 2,130,000 |
| Port Authority of New York and New | | | | | |
| Jersey, Equipment Notes | 0.22 | 12/7/12 | 2,800,000 | a | 2,800,000 |
| Rockland County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Dominican | | | | | |
| College Project) (LOC; TD Bank) | 0.17 | 12/7/12 | 2,760,000 | a,b | 2,760,000 |
| Rockland County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (Northern Manor Multicare | | | | | |
| Center, Inc. Project) | | | | | |
| (LOC; M&T Trust) | 0.26 | 12/7/12 | 1,300,000 | a | 1,300,000 |
| Seaford Union Free School | | | | | |
| District, GO Notes, TAN | 1.25 | 6/20/13 | 2,000,000 | b | 2,008,205 |
| Suffolk County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Hampton Day | | | | | |
| School Civic Facility) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.21 | 12/7/12 | 1,455,000 | a,b | 1,455,000 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| New York (continued) | | | | | |
| Sullivan County, | | | | | |
| GO Notes, BAN | 1.25 | 3/8/13 | 1,200,000 | | 1,202,060 |
| Sullivan County, | | | | | |
| GO Notes, BAN | 1.50 | 3/8/13 | 1,000,000 | | 1,002,245 |
| Sullivan County, | | | | | |
| GO Notes, TAN | 1.25 | 3/15/13 | 1,500,000 | | 1,503,188 |
| Syracuse Industrial Development | | | | | |
| Agency, Civic Facility Revenue | | | | | |
| (Community Development | | | | | |
| Properties—Vanderbilt/Larned | | | | | |
| Project) (LOC; M&T Trust) | 0.22 | 12/7/12 | 1,600,000 | a | 1,600,000 |
| Tompkins County Industrial | | | | | |
| Development Agency, Continuing | | | | | |
| Care Retirement Community | | | | | |
| Revenue (Kendal at Ithaca, Inc. | | | | | |
| Project) (LOC; Wells Fargo Bank) | 0.23 | 12/7/12 | 4,810,000 | a | 4,810,000 |
| Triborough Bridge and Tunnel | | | | | |
| Authority, General Revenue, | | | | | |
| Refunding (MTA Bridges and | | | | | |
| Tunnels) (Liquidity Facility; | | | | | |
| Landesbank Hessen-Thuringen | | | | | |
| Girozentrale) | 0.25 | 12/3/12 | 7,000,000 | a | 7,000,000 |
| Triborough Bridge and Tunnel | | | | | |
| Authority, Subordinate | | | | | |
| Revenue, Refunding (MTA | | | | | |
| Bridges and Tunnels) (Insured; | | | | | |
| Assured Guaranty Municipal | | | | | |
| Corp. and Liquidity Facility; | | | | | |
| JPMorgan Chase Bank) | 0.26 | 12/7/12 | 1,500,000 | a | 1,500,000 |
| West Genesee Central School | | | | | |
| District, GO Notes, RAN | 1.00 | 12/28/12 | 2,000,000 | b | 2,000,588 |
| Westchester County Industrial | | | | | |
| Development Agency, Civic | | | | | |
| Facility Revenue (Westchester | | | | | |
| Arts Council, Inc. Project) | | | | | |
| (LOC; Wells Fargo Bank) | 0.17 | 12/7/12 | 2,735,000 | a | 2,735,000 |
12
| | | | | | |
| Short-Term | Coupon | Maturity | Principal | | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | | Value ($) |
| U.S. Related—3.1% | | | | | | |
| Puerto Rico Commonwealth, | | | | | | |
| Public Improvement GO Notes, | | | | | | |
| Refunding (LOC; Barclays | | | | | | |
| Bank PLC) | 0.17 | 12/7/12 | 1,500,000 | a | | 1,500,000 |
| Puerto Rico Sales Tax Financing | | | | | | |
| Corporation, Sales Tax Revenue | | | | | | |
| (Citigroup ROCS, Series RR II | | | | | | |
| R-11762) (Liquidity Facility; | | | | | | |
| Citibank NA) | 0.19 | 12/7/12 | 2,500,000 | a,c,d | | 2,500,000 |
| Puerto Rico Sales Tax Financing | | | | | | |
| Corporation, Sales Tax Revenue | | | | | | |
| (Citigroup ROCS, Series RR II | | | | | | |
| R-11765) (Liquidity Facility; | | | | | | |
| Citibank NA) | 0.19 | 12/7/12 | 1,500,000 | a,c,d | | 1,500,000 |
| |
| Total Investments (cost $180,053,862) | | | 99.6 | % | | 180,053,862 |
| Cash and Receivables (Net) | | | .4 | % | | 795,879 |
| Net Assets | | | 100.0 | % | | 180,849,741 |
|
| a Variable rate demand note—rate shown is the interest rate in effect at November 30, 2012. Maturity date represents |
| the next demand date, or the ultimate maturity date if earlier. |
| b At November 30, 2012, the fund had $58,759,948 or 32.5% of net assets invested in securities whose payment of |
| principal and interest is dependent upon revenues generated from education. |
| c Securities exempt from registration pursuant to Rule 144A under the Securities Act of 1933.These securities may be |
| resold in transactions exempt from registration, normally to qualified institutional buyers.At November 30, 2012, |
| these securities amounted to $4,000,000 or 2.2% of net assets. |
| d The fund does not directly own the municipal security indicated; the fund owns an interest in a special purpose entity |
| that, in turn, owns the underlying municipal security.The special purpose entity permits the fund to own interests in |
| underlying assets, but in a manner structured to provide certain advantages not inherent in the underlying bonds (e.g., |
| enhanced liquidity, yields linked to short-term rates). |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | |
| Summary of Abbreviations | | |
| |
| ABAG | Association of Bay Area | ACA | American Capital Access |
| | Governments | | |
| AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
| AMBAC | American Municipal Bond | ARRN | Adjustable Rate |
| | Assurance Corporation | | Receipt Notes |
| BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
| CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
| CP | Commercial Paper | DRIVERS | Derivative Inverse |
| | | | Tax-Exempt Receipts |
| EDR | Economic Development | EIR | Environmental Improvement |
| | Revenue | | Revenue |
| FGIC | Financial Guaranty | FHA | Federal Housing |
| | Insurance Company | | Administration |
| FHLB | Federal Home | FHLMC | Federal Home Loan Mortgage |
| | Loan Bank | | Corporation |
| FNMA | Federal National | GAN | Grant Anticipation Notes |
| | Mortgage Association | | |
| GIC | Guaranteed Investment | GNMA | Government National Mortgage |
| | Contract | | Association |
| GO | General Obligation | HR | Hospital Revenue |
| IDB | Industrial Development Board | IDC | Industrial Development Corporation |
| IDR | Industrial Development | LIFERS | Long Inverse Floating |
| | Revenue | | Exempt Receipts |
| LOC | Letter of Credit | LOR | Limited Obligation Revenue |
| LR | Lease Revenue | MERLOTS | Municipal Exempt Receipt |
| | | | Liquidity Option Tender |
| MFHR | Multi-Family Housing Revenue | MFMR | Multi-Family Mortgage Revenue |
| PCR | Pollution Control Revenue | PILOT | Payment in Lieu of Taxes |
| P-FLOATS | Puttable Floating Option | PUTTERS | Puttable Tax-Exempt Receipts |
| | Tax-Exempt Receipts | | |
| RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
| RAW | Revenue Anticipation Warrants | ROCS | Reset Options Certificates |
| 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 |
| SPEARS | Short Puttable Exempt | SWDR | Solid Waste Disposal Revenue |
| | Adjustable Receipts | | |
| 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 | 66.6 |
| F2 | | VMIG2,MIG2,P2 | | SP2,A2 | 9.5 |
| AAA,AA,Ae | | Aaa,Aa,Ae | | AAA,AA,Ae | .9 |
| Not Ratedf | | Not Ratedf | | Not Ratedf | 23.0 |
| | | | | | 100.0 |
|
| † Based on total investments. |
| e Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers. |
| f 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.
|
| STATEMENT OF ASSETS AND LIABILITIES |
| November 30, 2012 (Unaudited) |
| | |
| | Cost | Value |
| Assets ($): | | |
| Investments in securities—See Statement of Investments | 180,053,862 | 180,053,862 |
| Cash | | 656,149 |
| Interest receivable | | 235,954 |
| Prepaid expenses | | 11,015 |
| | | 180,956,980 |
| Liabilities ($): | | |
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | | 33,833 |
| Payable for shares of Beneficial Interest redeemed | | 18,171 |
| Accrued expenses | | 55,235 |
| | | 107,239 |
| Net Assets ($) | | 180,849,741 |
| Composition of Net Assets ($): | | |
| Paid-in capital | | 180,846,416 |
| Accumulated net realized gain (loss) on investments | | 3,325 |
| Net Assets ($) | | 180,849,741 |
| Shares Outstanding | | |
| (unlimited number of $.001 par value shares of Beneficial Interest authorized) | 180,879,527 |
| Net Asset Value, offering and redemption price per share ($) | | 1.00 |
| |
| See notes to financial statements. | | |
16
|
| STATEMENT OF OPERATIONS |
| Six Months Ended November 30, 2012 (Unaudited) |
| | |
| Investment Income ($): | | |
| Interest Income | 260,993 | |
| Expenses: | | |
| Management fee—Note 2(a) | 494,344 | |
| Shareholder servicing costs—Note 2(b) | 93,875 | |
| Professional fees | 39,514 | |
| Custodian fees—Note 2(b) | 9,908 | |
| Registration fees | 8,422 | |
| Trustees’ fees and expenses—Note 2(c) | 7,612 | |
| Prospectus and shareholders’ reports | 5,801 | |
| Miscellaneous | 13,426 | |
| Total Expenses | 672,902 | |
| Less—reduction in expenses due to undertaking—Note 2(a) | (412,038 | ) |
| Less—reduction in fees due to earnings credits—Note 2(b) | (170 | ) |
| Net Expenses | 260,694 | |
| Investment Income—Net, representing net increase | | |
| in net assets resulting from operations | 299 | |
| |
| See notes to financial statements. | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | |
| | Six Months Ended | | | |
| | November 30, 2012 | | Year Ended | |
| | (Unaudited) | | May 31, 2012 | |
| Operations ($): | | | | |
| Investment income—net | 299 | | 334 | |
| Net realized gain (loss) on investments | — | | 3,325 | |
| Net Increase (Decrease) in Net Assets | | | | |
| Resulting from Operations | 299 | | 3,659 | |
| Dividends to Shareholders from ($): | | | | |
| Investment income—net | (299 | ) | (10,435 | ) |
| Beneficial Interest Transactions ($1.00 per share): | | | |
| Net proceeds from shares sold | 184,375,710 | | 276,442,093 | |
| Dividends reinvested | 299 | | 10,202 | |
| Cost of shares redeemed | (209,330,201 | ) | (293,091,729 | ) |
| Increase (Decrease) in Net Assets from | | | | |
| Beneficial Interest Transactions | (24,954,192 | ) | (16,639,434 | ) |
| Total Increase (Decrease) in Net Assets | (24,954,192 | ) | (16,646,210 | ) |
| Net Assets ($): | | | | |
| Beginning of Period | 205,803,933 | | 222,450,143 | |
| End of Period | 180,849,741 | | 205,803,933 | |
| |
| 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 | | | | | | | | | | | |
| November 30, 2012 | | | | Year Ended May 31, | | | |
| | (Unaudited) | | 2012 | | 2011 | | 2010 | | 2009 | | 2008 | |
| Per Share Data ($): | | | | | | | | | | | | |
| Net asset value, | | | | | | | | | | | | |
| beginning of period | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | |
| Investment Operations: | | | | | | | | | | | | |
| Investment income—net | .000 | a | .000 | a | .000 | a | .001 | | .011 | | .026 | |
| Distributions: | | | | | | | | | | | | |
| Dividends from | | | | | | | | | | | | |
| investment income—net | (.000 | )a | (.000)a (.000)a | | (.001 | ) | (.011 | ) | (.026 | ) |
| Net asset value, end of period | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | |
| Total Return (%) | .00 | b,c | .01 | | .00 | b | .05 | | 1.15 | | 2.62 | |
| Ratios/Supplemental Data (%): | | | | | | | | | | | | |
| Ratio of total expenses | | | | | | | | | | | | |
| to average net assets | .68 | c | .69 | | .69 | | .66 | | .68 | | .65 | |
| Ratio of net expenses | | | | | | | | | | | | |
| to average net assets | .26 | c | .25 | | .40 | | .47 | | .67 | | .65 | |
| Ratio of net investment income | | | | | | | | | | | | |
| to average net assets | .00 | b,c | .00 | b | .00 | b | .06 | | 1.11 | | 2.57 | |
| Net Assets, end of period | | | | | | | | | | | | |
| ($ x 1,000) | 180,850 205,804 | | 222,450 | | 263,226 | | 341,319 | | 272,327 | |
| |
| a | Amount represents less than $.001 per share. |
| b | Amount represents less than .01%. |
| c | Annualized. |
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus New York AMT-Free Municipal Money Market Fund (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a non-diversified open-end management investment company.The fund’s investment objective is to seek as high a level of current income exempt from federal, New York state and New York city income taxes as is 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 subsidiary 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; 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 is 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 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 enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
20
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. If amortized cost is determined not to approximate market value, the fair value of the portfolio securities will be determined by procedures established by and under the general supervision of the fund’s Board of Trustees (the “Board”).
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).
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 not obtained from a quoted price in an active market, such securities are reflected within Level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of November 30, 2012 in valuing the fund’s investments:
| |
| | Short-Term |
| Valuation Inputs | Investments ($)† |
| Level 1—Unadjusted Quoted Prices | — |
| Level 2—Other Significant Observable Inputs | 180,053,862 |
| Level 3—Significant Unobservable Inputs | — |
| Total | 180,053,862 |
| † See Statement of Investments for additional detailed categorizations. | |
At November 30, 2012, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.
(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.
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.
(c) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a
22
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.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax-exempt dividends, by complying with the applicable provisions of the 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 November 30, 2012, 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 May 31, 2012 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 May 31, 2012 was as follows: tax-exempt income $334, ordinary income $158 and long-term capital gains $9,943. The tax character of current year distributions will be determined at the end of the current fiscal year.
At November 30, 2012, the cost of investments for federal income tax purposes was substantially the same as for financial reporting purposes (see the Statement of Investments).
NOTE 2—Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (the “Agreement”) with the Manager, the management fee is computed at the annual rate of .50% of the value of the fund’s average daily net assets and is payable
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
monthly. The Agreement provides that if in any full fiscal year the aggregate expenses of the fund (exclusive of taxes, brokerage fees, interest on borrowings and extraordinary expenses) exceed 1 1 / 2% of the value of the fund’s average daily net assets, the fund may deduct from the payment to be made to the Manager or the Manager will bear, such excess expense. During the period ended November 30, 2012, there was no reduction in expenses pursuant to the Agreement.
The Manager has also undertaken to waive receipt of the management fee and/or reimburse operating expenses in order to facilitate a daily yield at or above a certain level which may change from time to time. This undertaking is voluntary and not contractual, and may be terminated at any time. The reduction in expenses, pursuant to the undertaking, amounted to $412,038 during the period ended November 30, 2012.
(b) Under the Shareholder Services Plan, the fund reimburses the Distributor an amount not to exceed an annual rate of .25% of the value of the fund’s average daily net assets for certain allocated expenses of providing personal services and/or maintaining shareholder accounts.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended November 30, 2012, the fund was charged $67,390 pursuant to the Shareholder Services Plan.
The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The fund compensates DreyfusTransfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing transfer agency services for the fund and cash management services related to
24
fund subscriptions and redemptions. During the period ended November 30, 2012, the fund was charged $19,327 for transfer agency services and $1,317 for cash management services. Cash management fees were partially offset by earnings credits of $160. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a custody agreement for providing custodial services for the fund. During the period ended November 30, 2012, the fund was charged $9,908 pursuant to the custody agreement.
The fund compensates The Bank of New York Mellon under a cash management agreement for performing certain cash management services related to fund subscriptions and redemptions. The Bank of NewYork Mellon also provides shareholder redemption draft processing services. During the period ended November 30, 2012, the fund was charged $478 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $10.
During the period ended November 30, 2012, the fund was charged $3,981 for services performed by the Chief Compliance Officer and his staff.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $72,801, custodian fees $6,137, Chief Compliance Officer fees $3,318 and transfer agency fees $10,200, which are offset against an expense reimbursement currently in effect in the amount of $58,623.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 3—Securities Transactions:
The fund is permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of securities by the fund from or to another fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment adviser (or affiliated investment adviser), common Trustees and/or common officers, complies with Rule 17a-7 under the Act. During the period ended November 30, 2012, the fund engaged in purchases and sales of securities pursuant to Rule 17a-7 under the Act amounting to $44,100,000 and $27,330,000, respectively.
26
|
| INFORMATION ABOUT THE RENEWAL OF THE |
| FUND’S MANAGEMENT AGREEMENT (Unaudited) |
At a meeting of the fund’s Board of Trustees held on November 5-6, 2012, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”).The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below.The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund.The Board considered information previously provided to them in presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex, and Dreyfus representatives confirmed that there had been no material changes in this information. Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus’ corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.
The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements.The Board also considered Dreyfus’ extensive administrative, accounting, and compliance infrastructures.
|
| INFORMATION ABOUT THE RENEWAL OF THE FUND’S |
| MANAGEMENT AGREEMENT (Unaudited) (continued) |
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio.The Board reviewed reports prepared by Lipper, Inc. (“Lipper”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended September 30, 2012, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Lipper as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Lipper used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.
Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds. The Board discussed the results of the comparisons and noted that the fund’s total return performance was variously above and below the Performance Group median and Performance Universe median for the various time periods reported. The Board noted that the Fund’s performance was only one basis point lower in each period that performance was below the Performance Group Median.
The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons.The Board noted that the fund’s contractual management fee was above the Expense Group median, the fund’s actual management fee was above the Expense Group median and below the Expense Universe median, and the fund’s actual total expenses were below the Expense Group median and the Expense Universe median.
28
The Board considered the duration and extent of the fee waiver/expense reimbursement undertaking by Dreyfus to support a minimum zero or positive daily yield, as applicable from time to time, in the ongoing, historically low interest rate environment, and the Board noted the extent to which differences among the returns for the Performance Group funds might be attributable to similar undertakings.
Dreyfus representatives reviewed with the Board the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund and (2) paid to Dreyfus or the Dreyfus-affiliated primary employer of the fund’s primary portfolio manager(s) for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients.They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors. The Board considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness and reasonableness of the fund’s management fee.
Analysis of Profitability and Economies of Scale. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to Dreyfus of managing the funds in the Dreyfus fund complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus.The Board also noted the expense limitation arrangement and its effect on Dreyfus’ profitability.The Board also had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex.The consulting
|
| INFORMATION ABOUT THE RENEWAL OF THE FUND’S |
| MANAGEMENT AGREEMENT (Unaudited) (continued) |
firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
The Board’s counsel stated that the Board should consider the profitability analysis (1) as part of the evaluation of whether the fees under the Agreement bear a reasonable relationship to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Dreyfus representatives noted that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that Dreyfus may have realized any economies of scale would be less. Dreyfus representatives also noted that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level.The Board also considered potential benefits to Dreyfus from acting as investment adviser and noted that there were no soft dollar arrangements in effect for trading the fund’s investments.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.
The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
The Board was satisfied with the fund’s performance, in light of the considerations described above.
The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.
30
The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.
In evaluating the Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with Dreyfus and its affiliates, of the fund and the services provided to the fund by Dreyfus. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, it should be noted that the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years.The Board determined that renewal of the Agreement for the ensuing year was in the best interests of the fund and its shareholders.
For More Information
Telephone 1-800-DREYFUS
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-DREYFUS.
Item 2. Code of Ethics.
The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There have been no amendments to, or waivers in connection with, the Code of Ethics during the period covered by this Report.
Item 3. Audit Committee Financial Expert.
The Registrant's Board has determined that Joseph S. DiMartino, a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the "SEC"). Mr. DiMartino is "independent" as defined by the SEC for purposes of audit committee financial expert determinations.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $30,312 in 2011 and $31,401 in 2012.
(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $6,000 in 2011 and $12,000 in 2012. These services consisted of one or more of the following: (i) agreed upon procedures related to compliance with Internal Revenue Code section 817(h), (ii) security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended, (iii) advisory services as to the accounting or disclosure treatment of Registrant transactions or events and (iv) advisory services to the accounting or disclosure treatment of the actual or potential impact to the Registrant of final or proposed rules, standards or interpretations by the Securities and Exchange Commission, the Financial Accounting Standards Boards or other regulatory or standard-setting bodies.
The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $0 in 2011 and $0 in 2012.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice, and tax planning ("Tax Services") were $2,460 in 2011 and $4,382 in 2012. These services consisted of: (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments; and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held. The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates, which required pre-approval by the Audit Committee were $0 in 2011 and $0 in 2012.
(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $113 in 2011 and $368 in 2012. These services consisted of a review of the Registrant's anti-money laundering program.
The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee, were $0 in 2011 and $200,000 in 2012.
(e)(1) Audit Committee Pre-Approval Policies and Procedures. The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval (within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and Service Affiliates without specific case-by-case consideration. The pre-approved services in the Policy can include pre-approved audit services, pre-approved audit-related services, pre-approved tax services and pre-approved all other services. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are considered annually.
(e)(2) Note: None of the services described in paragraphs (b) through (d) of this Item 4 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) None of the hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal account's full-time, permanent employees.
Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $19,415,177 in 2011 and $50,505,978 in 2012.
Auditor Independence. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence.
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.
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.
(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) Code of ethics referred to in Item 2.
(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.
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.
Dreyfus New York AMT-Free Municipal Bond Fund
By: /s/ Bradley J. Skapyak |
Bradley J. Skapyak, President |
Date: | January 24, 2013 |
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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. |
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By: /s/ Bradley J. Skapyak |
Bradley J. Skapyak, President |
Date: | January 24, 2013 |
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By: /s/ James Windels |
James Windels, Treasurer |
Date: | January 24, 2013 |
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EXHIBIT INDEX
(a)(1) Code of ethics referred to in Item 2.
(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)
