We are pleased to present this semiannual report for Dreyfus Short-Intermediate Municipal Bond Fund, covering the six-month period from April 1, 2016 through September 30, 2016. 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.
Stocks and bonds generally produced strong returns over the reporting period despite ongoing concerns about global economic conditions. In the wake of sharp market declines earlier in 2016, investor sentiment improved dramatically in the spring when U.S. monetary policymakers held short-term interest rates steady, other central banks eased their monetary policies further, and commodity prices rebounded from depressed levels. A referendum in Great Britain to leave the European Union triggered brief bouts of market turbulence in June, but the market rally resumed and several broad measures of stock market performance set record highs in July and August. In the bond market, aggressively accommodative monetary policies and robust investor demand for current income generally continued to send yields of high-quality sovereign bonds lower and their prices higher.
Recently, we have seen evidence that investors may be shifting their focus away from macroeconomic influences and toward underlying company fundamentals. This development suggests that selectivity may be a more important determinant of investment success over the months ahead. As always, we encourage you to discuss the implications of our observations with your financial advisor.
Thank you for your continued confidence and support.
DISCUSSION OF FUND PERFORMANCE
For the period from April 1, 2016 through September 30, 2016, as provided by Thomas Casey and Jeffrey Burger, Primary Portfolio Managers
Fund and Market Performance Overview
For the six-month period ended September 30, 2016, Dreyfus Short-Intermediate Municipal Bond Fund’s Class A shares produced a total return of 0.33%, Class D shares returned 0.33%, Class I shares returned 0.46%, and Class Y shares returned 0.46%.1 In comparison, the fund’s benchmark, the Bloomberg Barclays 3-Year Municipal Bond Index (the “Index”), which is not subject to fees and expenses like a mutual fund, produced a total return of 0.43% for the same period.2
Short- and intermediate-term municipal bonds produced mildly positive returns over the reporting period amid falling long-term interest rates and robust investor demand. The fund benefited in this environment from its interest rate and security selection strategies.
The Fund’s Investment Approach
The fund seeks to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. To pursue this goal, the fund normally invests substantially all of its assets in municipal bonds that provide income exempt from federal personal income tax. The fund invests only in municipal bonds rated investment grade or the unrated equivalent as determined by Dreyfus at the time of investment. The fund invests primarily in municipal bonds with remaining maturities of five years or less and generally maintains a dollar-weighted average portfolio maturity of two to three years.
The portfolio managers focus on identifying undervalued sectors and securities, and minimizing the use of interest rate forecasting. The portfolio managers select municipal bonds by using fundamental credit analysis to estimate the relative value and attractiveness of various sectors and securities and to exploit pricing inefficiencies in the municipal bond market. They also actively trade among various sectors, such as pre-refunded, general obligation, and revenue, based on their apparent relative values. The fund seeks to invest in several of these sectors.
Low Interest Rates Supported Municipal Bond Prices
Investor sentiment had changed dramatically in the weeks prior to the beginning of the reporting period, as commodity prices rebounded from previously depressed levels, global economic conditions stabilized, and U.S. monetary policymakers refrained from additional short-term rate hikes. Although the labor market stayed strong, economic growth rates and inflationary pressures remained muted, keeping downward pressure on rates. In June, United Kingdom’s referendum to leave the European Union caused investors’ macroeconomic concerns to intensify, sending long-term interest rates to historical lows in July. These factors had a greater influence on long-term municipal bonds than on their short- and intermediate-term counterparts.
Supply-and-demand dynamics in the municipal bond market also generally proved favorable. In the low interest rate environment, income-oriented investors reached for the competitive after-tax yields provided by municipal bonds. Although a moderating supply of newly issued securities early in the reporting period also supported bond prices, a surge in new issuance volumes during August and September produced heightened market volatility.
The U.S. economic recovery continued to support sound credit conditions for most municipal bond issuers. A number of states and municipalities face pressure from underfunded pension systems, but most have benefited from rising tax revenues and balanced operating budgets.
3
DISCUSSION OF FUND PERFORMANCE (continued)
Constructive Strategies Bolstered Fund Results
The fund’s performance was enhanced by its interest rate strategies, including relatively light exposure to securities with two-year maturities that were hurt in anticipation of higher short-term interest rates and money market regulatory reforms. Instead, we focused on five-year maturities, which proved less sensitive to these concerns.
Our security selection strategy also fared well over the reporting period. We continued to favor revenue-backed municipal bonds, and the fund achieved especially strong results among securities backed by transportation facilities, education institutions, and hospitals. The fund further benefited from underweighted exposure to lower yielding escrowed bonds, and the sale of bonds from Illinois and Chicago enabled the fund to avoid the subsequent impact of their deteriorating credit fundamentals.
Laggards during the reporting period included high-quality revenue bonds, including those backed by essential municipal services such as public power utilities. In addition, the fund did not participate in a rally among Puerto Rico securities, which did not meet our credit standards.
A More Cautious Investment Posture
As of the reporting period’s end, we remain optimistic about the long-term prospects of the municipal bond market as the U.S. economy has continued to grow and municipal credit quality generally has remained strong. We continue to maintain the fund’s generally constructive investment posture in the face of recently higher levels of market volatility stemming from near-term concerns, including uncertainty surrounding the U.S. election, expectations of higher short-term interest rates, and the recent increase in municipal bond issuance volumes.
We have retained the fund’s relatively long average duration and a bias toward longer-term revenue bonds in an effort to capture more competitive yields.
October 17, 2016
Bonds are subject generally to interest rate, credit, liquidity, and market risks, to varying degrees, all of which are more fully described in the fund’s prospectus. Generally, all other factors being equal, bond prices are inversely related to interest rate changes, and rate increases can cause price declines.
1 Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charge in the case of Class A shares. Class D, I, and Y shares are not subject to any initial or deferred sales charge. Share price, yield, and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. Income may be subject to state and local taxes, and some income may be subject to the federal alternative minimum tax (AMT) for certain investors. Capital gains, if any, are taxable. Return figures provided reflect the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in effect until August 1, 2017, at which time it may be extended, modified, or terminated. Had these expenses not been absorbed, the fund’s returns would have been lower. Past performance is no guarantee of future results.
2 Source: Lipper Inc. — Reflects reinvestment of dividends and, where applicable, capital gain distributions. The Bloomberg Barclays 3-Year Municipal Bond Index is an unmanaged total return performance benchmark for the investment-grade, geographically unrestricted 3-year tax-exempt bond market, consisting of municipal bonds with maturities of 2-4 years. Index returns do not reflect the fees and expenses associated with operating a mutual fund. Investors cannot invest directly in any index.
4
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 Short-Intermediate Municipal Bond Fund from April 1, 2016 to September 30, 2016. 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 September 30, 2016 |
| | | Class A | | Class D | | Class I | | Class Y |
Expenses paid per $1,000† | | $3.72 | | $2.96 | | $2.46 | | $2.46 |
Ending value (after expenses) | | $1,003.30 | | $1,003.30 | | $1,004.60 | | $1,004.60 |
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 September 30, 2016 |
| | | Class A | | Class D | | Class I | | Class Y |
Expenses paid per $1,000† | | $3.75 | | $2.99 | | $2.48 | | $2.48 |
Ending value (after expenses) | | $1,021.36 | | $1,022.11 | | $1,022.61 | | $1,022.61 |
† Expenses are equal to the fund’s annualized expense ratio of .74% for Class A, .59% for Class D, .49% for Class I and .49% for Class Y, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
September 30, 2016 (Unaudited)
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Alabama - 1.1% | | | | | |
Alabama Public School and College Authority,
Capital Improvement Revenue | | 5.00 | | 1/1/19 | | 5,000,000 | | 5,452,550 | |
Arizona - 2.0% | | | | | |
Arizona School Facilities Board,
COP | | 5.00 | | 9/1/20 | | 2,500,000 | | 2,864,700 | |
Phoenix Civic Improvement Corporation,
Junior Lien Wastewater System Revenue | | 5.00 | | 7/1/18 | | 3,150,000 | | 3,376,327 | |
Tucson,
Water System Revenue | | 5.00 | | 7/1/20 | | 3,000,000 | | 3,437,280 | |
| | 9,678,307 | |
Arkansas - .2% | | | | | |
Arkansas Development Finance Authority,
HR (Washington Regional Medical Center) | | 5.00 | | 2/1/20 | | 1,070,000 | | 1,195,843 | |
California - 2.5% | | | | | |
California,
GO (Various Purpose) | | 5.00 | | 12/1/19 | | 3,105,000 | | 3,504,117 | |
California State Public Works Board,
LR (Judicial Council of California) (New Stockton Courthouse) | | 5.00 | | 10/1/19 | | 1,500,000 | | 1,681,320 | |
Los Angeles Harbor Department,
Revenue | | 5.00 | | 8/1/21 | | 3,400,000 | | 3,983,746 | |
North Natomas Community Facilities District Number 4,
Special Tax Bonds | | 5.00 | | 9/1/17 | | 1,430,000 | | 1,479,435 | |
University of California Regents,
General Revenue | | 5.00 | | 5/15/20 | | 1,500,000 | | 1,719,435 | |
| | 12,368,053 | |
Colorado - 1.4% | | | | | |
City and County of Denver,
Airport System Subordinate Revenue | | 5.00 | | 11/15/18 | | 1,180,000 | | 1,274,955 | |
Colorado Educational and Cultural Facilities Authority,
Revenue (Johnson and Wales University Project) | | 5.00 | | 4/1/18 | | 2,000,000 | | 2,109,460 | |
Platte River Power Authority,
Power Revenue | | 5.00 | | 6/1/20 | | 3,220,000 | | 3,687,480 | |
| | 7,071,895 | |
Connecticut - 1.4% | | | | | |
Connecticut,
Special Tax Obligation Revenue (Transportation Infrastructure Purposes) | | 4.00 | | 9/1/18 | | 2,750,000 | | 2,909,307 | |
Connecticut,
Special Tax Obligation Revenue (Transportation Infrastructure Purposes) | | 5.00 | | 8/1/19 | | 1,500,000 | | 1,667,940 | |
6
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Connecticut - 1.4% (continued) | | | | | |
Connecticut,
Special Tax Obligation Revenue (Transportation Infrastructure Purposes) | | 5.00 | | 9/1/21 | | 2,000,000 | | 2,354,960 | |
| | 6,932,207 | |
District of Columbia - .3% | | | | | |
District of Columbia,
Income Tax Secured Revenue | | 5.00 | | 12/1/20 | | 1,460,000 | | 1,645,829 | |
Florida - 9.6% | | | | | |
Citizens Property Insurance Corporation,
Coastal Account Senior Secured Revenue | | 5.00 | | 6/1/20 | | 5,700,000 | | 6,378,129 | |
Citizens Property Insurance Corporation,
Personal Lines Account/Commercial Lines Account Senior Secured Revenue | | 5.00 | | 6/1/19 | | 5,000,000 | | 5,521,500 | |
Florida Board of Education,
Public Education Capital Outlay Bonds | | 5.00 | | 6/1/18 | | 3,425,000 | | 3,663,037 | |
Florida Department of Transportation,
Turnpike Revenue | | 5.00 | | 7/1/17 | | 4,365,000 | | 4,503,938 | |
Florida Department of Transportation,
Turnpike Revenue | | 5.00 | | 7/1/19 | | 3,270,000 | | 3,634,638 | |
Florida Department of Transportation,
Turnpike Revenue | | 5.00 | | 7/1/20 | | 1,850,000 | | 2,123,338 | |
Greater Orlando Aviation Authority,
Airport Facilities Revenue | | 5.00 | | 10/1/20 | | 1,000,000 | | 1,143,840 | |
Lee County,
Solid Waste System Revenue | | 5.00 | | 10/1/21 | | 3,150,000 | | 3,644,865 | |
Lee County,
Transportation Facilities Revenue (Insured; Assured Guaranty Municipal Corp.) | | 5.00 | | 10/1/19 | | 1,200,000 | | 1,339,188 | |
Miami-Dade County,
Aviation Revenue | | 4.00 | | 10/1/17 | | 3,725,000 | | 3,840,400 | |
Miami-Dade County,
Aviation Revenue | | 5.00 | | 10/1/20 | | 3,100,000 | | 3,549,872 | |
Orlando Utilities Commission,
Utility System Revenue | | 5.00 | | 10/1/21 | | 2,400,000 | | 2,851,152 | |
Palm Beach County Health Facilities Authority,
Retirement Community Revenue (ACTS Retirement - Life Communities, Inc. Obligated Group) | | 5.00 | | 11/15/21 | | 1,500,000 | | 1,758,435 | |
South Florida Water Management District,
COP (Master Lease Purchase Agreement) | | 5.00 | | 10/1/20 | | 1,500,000 | | 1,732,605 | |
Tampa,
Capital Improvement Cigarette Tax Allocation Revenue (H. Lee Moffitt Cancer Center Project) | | 4.00 | | 9/1/17 | | 1,055,000 | | 1,082,841 | |
| | 46,767,778 | |
Georgia - 2.4% | | | | | |
Gwinnett County School District,
Sales Tax GO | | 5.00 | | 8/1/20 | | 4,000,000 | | 4,616,400 | |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Georgia - 2.4% (continued) | | | | | |
Main Street Natural Gas, Inc.,
Gas Project Revenue (Guaranty Agreement; JPMorgan Chase Bank) | | 5.00 | | 3/15/19 | | 2,000,000 | | 2,157,220 | |
Municipal Electric Authority of Georgia,
Project One Subordinated Bonds | | 5.00 | | 1/1/19 | | 2,315,000 | | 2,521,822 | |
Municipal Electric Authority of Georgia,
Project One Subordinated Bonds | | 4.00 | | 1/1/21 | | 2,000,000 | | 2,233,240 | |
| | 11,528,682 | |
Illinois - 10.1% | | | | | |
Chicago,
Customer Facility Charge Senior Lien Revenue (Chicago O'Hare International Airport) | | 5.00 | | 1/1/18 | | 1,105,000 | | 1,155,476 | |
Chicago,
General Airport Senior Lien Revenue (Chicago O'Hare International Airport) | | 5.00 | | 1/1/17 | | 4,350,000 | | 4,395,196 | |
Chicago,
Second Lien Wastewater Transmission Revenue | | 5.00 | | 1/1/20 | | 1,985,000 | | 2,184,751 | |
Chicago,
Second Lien Water Revenue | | 4.25 | | 11/1/18 | | 1,050,000 | | 1,111,520 | |
Chicago,
Second Lien Water Revenue | | 5.00 | | 11/1/20 | | 1,000,000 | | 1,125,630 | |
Greater Chicago Metropolitan Water Reclamation District,
GO | | 5.00 | | 12/1/19 | | 1,700,000 | | 1,905,734 | |
Greater Chicago Metropolitan Water Reclamation District,
GO | | 5.00 | | 12/1/20 | | 1,850,000 | | 2,134,882 | |
Illinois,
Sales Tax Revenue (Build Illinois Bonds) | | 5.00 | | 6/15/17 | | 5,570,000 | | 5,731,029 | |
Illinois,
Sales Tax Revenue (Build Illinois Bonds) (Insured; National Public Finance Guarantee Corp.) | | 5.75 | | 6/15/18 | | 2,930,000 | | 3,158,393 | |
Illinois Finance Authority,
Revenue (OFS Healthcare System) | | 5.00 | | 11/15/20 | | 2,405,000 | | 2,756,274 | |
Illinois Finance Authority,
Revenue (The University of Chicago) | | 5.00 | | 10/1/20 | | 2,590,000 | | 2,981,737 | |
Illinois Finance Authority,
Revenue (The University of Chicago) | | 5.00 | | 10/1/20 | | 1,200,000 | | 1,381,500 | |
Kane County Forest Preserve District,
GO | | 4.00 | | 12/15/16 | | 6,000,000 | | 6,039,420 | |
Metropolitan Pier and Exposition Authority,
Revenue (McCormick Place Expansion Project) | | 5.00 | | 12/15/20 | | 3,675,000 | | 4,116,845 | |
Northern Illinois Municipal Power Agency,
Power Project Revenue (Prairie State Project) | | 5.00 | | 12/1/20 | | 1,000,000 | | 1,146,450 | |
Railsplitter Tobacco Settlement Authority,
Tobacco Settlement Revenue | | 5.00 | | 6/1/18 | | 5,500,000 | | 5,839,625 | |
8
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Illinois - 10.1% (continued) | | | | | |
Springfield,
Senior Lien Electric Revenue | | 5.00 | | 3/1/20 | | 2,000,000 | | 2,244,560 | |
| | 49,409,022 | |
Indiana - 1.6% | | | | | |
Indianapolis Local Public Improvement Bond Bank,
Revenue (Indianapolis Airport Authority Project) | | 5.00 | | 1/1/21 | | 3,870,000 | | 4,451,816 | |
Richmond Hospital Authority,
Revenue (Reid Hospital Project) | | 5.00 | | 1/1/20 | | 1,000,000 | | 1,117,620 | |
Rockport,
PCR (Indiana Michigan Power Company Project) | | 1.75 | | 6/1/18 | | 2,000,000 | | 2,014,260 | |
| | 7,583,696 | |
Kansas - .2% | | | | | |
Kansas Department of Transportation,
Highway Revenue | | 0.75 | | 9/1/19 | | 1,180,000 | a | 1,165,982 | |
Louisiana - 1.9% | | | | | |
East Baton Rouge Sewerage Commission,
Revenue | | 5.00 | | 2/1/20 | | 1,000,000 | | 1,130,960 | |
Louisiana Citizens Property Insurance Corporation,
Assessment Revenue | | 5.00 | | 6/1/20 | | 3,100,000 | | 3,508,456 | |
Tobacco Settlement Financing Corporation of Louisiana,
Tobacco Settlement Asset-Backed Bonds | | 5.00 | | 5/15/18 | | 4,250,000 | | 4,510,482 | |
| | 9,149,898 | |
Maryland - 1.2% | | | | | |
Maryland,
GO (State and Local Facilities Loan) | | 5.25 | | 8/1/20 | | 5,000,000 | | 5,817,550 | |
Michigan - 5.0% | | | | | |
Michigan,
State Trunk Line Revenue | | 5.00 | | 11/15/17 | | 3,830,000 | | 4,009,972 | |
Michigan Building Authority,
Revenue (Facilities Program) | | 5.00 | | 4/15/20 | | 2,200,000 | | 2,500,608 | |
Michigan Finance Authority,
HR (Henry Ford Health System) | | 5.00 | | 11/15/21 | | 1,125,000 | | 1,322,471 | |
Michigan Finance Authority,
Local Government Loan Program Revenue (Detroit Water and Sewerage Department, Water Supply System Revenue Senior Lien Local Project Bonds) (Insured; Assured Guaranty Municipal Corp.) | | 5.00 | | 7/1/20 | | 1,000,000 | | 1,133,890 | |
Michigan Finance Authority,
Local Government Loan Program Revenue (School District of the City of Detroit State Qualified Unlimited Tax GO Local Project Bonds) | | 5.00 | | 5/1/19 | | 4,250,000 | | 4,650,095 | |
Michigan Finance Authority,
Student Loan Revenue | | 5.00 | | 11/1/19 | | 1,600,000 | | 1,744,256 | |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Michigan - 5.0% (continued) | | | | | |
Michigan Finance Authority,
Unemployment Obligation Assessment Revenue | | 5.00 | | 1/1/21 | | 3,000,000 | | 3,337,110 | |
Wayne County Airport Authority,
Airport Revenue (Detroit Metropolitan Wayne County Airport) | | 5.00 | | 12/1/19 | | 5,000,000 | | 5,535,500 | |
| | 24,233,902 | |
Minnesota - 1.4% | | | | | |
Minneapolis-Saint Paul Metropolitan Airports Commission,
Subordinate Airport Revenue | | 5.00 | | 1/1/20 | | 1,100,000 | | 1,239,612 | |
Minnesota,
State General Fund Appropriation Bonds | | 5.00 | | 3/1/17 | | 5,470,000 | | 5,566,928 | |
| | 6,806,540 | |
Missouri - 2.3% | | | | | |
Kansas City,
Sanitary Sewer System Improvement Revenue | | 4.00 | | 1/1/21 | | 1,000,000 | | 1,123,700 | |
Missouri Development Finance Board,
Infrastructure Facilities Revenue (Branson Landing Project) | | 5.00 | | 6/1/20 | | 3,960,000 | | 4,468,583 | |
Missouri Health and Educational Facilities Authority,
Health Facilities Revenue (Saint Luke's Health System, Inc.) | | 5.00 | | 11/15/20 | | 1,070,000 | | 1,233,731 | |
Missouri Joint Municipal Electric Utility Commission,
Power Project Revenue (Iatan 2 Project) | | 4.00 | | 1/1/19 | | 1,500,000 | | 1,600,665 | |
Missouri Joint Municipal Electric Utility Commission,
Power Project Revenue (Prairie State Project) | | 5.00 | | 12/1/19 | | 2,335,000 | | 2,624,330 | |
| | 11,051,009 | |
Nebraska - .7% | | | | | |
Omaha Public Power District,
Electric System Revenue | | 5.00 | | 2/1/19 | | 3,150,000 | | 3,445,407 | |
Nevada - 1.6% | | | | | |
Nevada,
Highway Revenue (Motor Vehicle Fuel Tax) | | 4.00 | | 12/1/17 | | 5,000,000 | | 5,183,450 | |
Nevada,
Unemployment Compensation Fund Special Revenue | | 5.00 | | 6/1/18 | | 2,500,000 | | 2,622,600 | |
| | 7,806,050 | |
New Jersey - 4.1% | | | | | |
New Jersey Economic Development Authority,
Cigarette Tax Revenue | | 5.00 | | 6/15/17 | | 2,000,000 | | 2,043,120 | |
New Jersey Economic Development Authority,
School Facilities Construction Revenue | | 5.00 | | 6/15/20 | | 1,275,000 | | 1,409,079 | |
10
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
New Jersey - 4.1% (continued) | | | | | |
New Jersey Educational Facilities Authority,
Higher Education Facilities Trust Fund Revenue | | 5.00 | | 6/15/19 | | 1,980,000 | | 2,149,013 | |
New Jersey Educational Facilities Authority,
Revenue (Stockton University Issue) | | 5.00 | | 7/1/21 | | 2,190,000 | | 2,504,572 | |
New Jersey Health Care Facilities Financing Authority,
Revenue (Atlantic Health System Hospital Corporation Issue) | | 5.00 | | 7/1/20 | | 2,000,000 | | 2,280,360 | |
New Jersey Higher Education Student Assistance Authority,
Senior Student Loan Revenue | | 5.00 | | 12/1/20 | | 3,000,000 | | 3,343,980 | |
New Jersey Turnpike Authority,
Turnpike Revenue | | 1.39 | | 1/1/18 | | 2,500,000 | a | 2,505,625 | |
New Jersey Turnpike Authority,
Turnpike Revenue | | 5.00 | | 1/1/19 | | 3,720,000 | | 4,049,704 | |
| | 20,285,453 | |
New Mexico - 1.5% | | | | | |
Albuquerque Bernalillo County Water Utility Authority,
Senior Lien Joint Water and Sewer System Revenue | | 5.00 | | 7/1/20 | | 1,675,000 | | 1,927,171 | |
New Mexico Municipal Energy Acquisition Authority,
Gas Supply Revenue | | 0.87 | | 8/1/17 | | 5,395,000 | a | 5,400,287 | |
| | 7,327,458 | |
New York - 15.6% | | | | | |
Long Island Power Authority,
Electric System General Revenue | | 1.25 | | 11/1/18 | | 2,500,000 | a | 2,508,325 | |
Metropolitan Transportation Authority,
Transportation Revenue | | 5.00 | | 11/15/17 | | 1,500,000 | | 1,570,320 | |
Metropolitan Transportation Authority,
Transportation Revenue | | 5.00 | | 11/15/18 | | 1,000,000 | | 1,086,760 | |
Metropolitan Transportation Authority,
Transportation Revenue | | 5.00 | | 11/15/19 | | 4,330,000 | | 4,872,246 | |
Metropolitan Transportation Authority,
Transportation Revenue | | 5.00 | | 11/15/20 | | 1,500,000 | | 1,741,035 | |
Metropolitan Transportation Authority,
Transportation Revenue | | 5.00 | | 11/15/20 | | 1,500,000 | | 1,741,035 | |
Nassau County,
GO (General Improvement) | | 5.00 | | 1/1/20 | | 5,000,000 | | 5,619,600 | |
New York City,
GO | | 5.00 | | 8/1/18 | | 2,500,000 | | 2,684,925 | |
New York City,
GO | | 5.00 | | 8/1/19 | | 5,750,000 | | 6,392,620 | |
New York City,
GO | | 5.00 | | 8/1/20 | | 3,830,000 | | 4,396,495 | |
New York City Industrial Development Agency,
Senior Airport Facilities Revenue (Transportation Infrastructure Properties, LLC Obligated Group) | | 5.00 | | 7/1/17 | | 2,000,000 | | 2,057,900 | |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
New York - 15.6% (continued) | | | | | |
New York City Transitional Finance Authority,
Building Aid Revenue | | 5.00 | | 7/15/20 | | 1,500,000 | | 1,721,925 | |
New York City Transitional Finance Authority,
Future Tax Secured Subordinate Revenue (Escrowed to Maturity) | | 5.00 | | 11/1/16 | | 955,000 | | 958,524 | |
New York State Dormitory Authority,
Revenue (State University of New York Dormitory Facilities) | | 5.00 | | 7/1/18 | | 1,750,000 | | 1,875,738 | |
New York State Dormitory Authority,
State Personal Income Tax Revenue (General Purpose) | | 5.00 | | 2/15/19 | | 3,535,000 | | 3,875,208 | |
New York State Dormitory Authority,
State Personal Income Tax Revenue (General Purpose) | | 5.00 | | 2/15/19 | | 2,500,000 | | 2,740,600 | |
New York State Dormitory Authority,
State Sales Tax Revenue | | 5.00 | | 3/15/20 | | 4,000,000 | | 4,551,000 | |
New York State Thruway Authority,
General Revenue Junior Indebtedness Obligations | | 5.00 | | 5/1/19 | | 3,000,000 | | 3,309,360 | |
New York Transportation Development Corporation,
Special Facility Revenue (Terminal One Group Association, L.P. Project) | | 5.00 | | 1/1/17 | | 5,000,000 | | 5,051,700 | |
New York Transportation Develpoment Corporation,
Special Facility Revenue (Terminal One Group Association, L.P. Project) | | 5.00 | | 1/1/19 | | 5,000,000 | | 5,436,150 | |
Port Authority of New York and New Jersey,
(Consolidated Bonds, 175th Series) | | 5.00 | | 12/1/17 | | 3,000,000 | | 3,145,440 | |
Port Authority of New York and New Jersey,
(Consolidated Bonds, 185th Series) | | 5.00 | | 9/1/20 | | 3,400,000 | | 3,889,396 | |
Triborough Bridge and Tunnel Authority,
General Revenue (MTA Bridges and Tunnels) | | 0.70 | | 12/3/19 | | 5,000,000 | a | 4,929,500 | |
| | 76,155,802 | |
North Carolina - .6% | | | | | |
Charlotte,
Water and Sewer System Revenue | | 5.00 | | 7/1/20 | | 2,400,000 | | 2,762,280 | |
Oklahoma - .3% | | | | | |
Oklahoma Turnpike Authority,
Oklahoma Turnpike System Second Senior Revenue | | 5.00 | | 1/1/21 | | 1,275,000 | | 1,483,335 | |
Pennsylvania - 3.1% | | | | | |
Pennsylvania Economic Development Financing Authority,
Revenue (University of Pittsburgh Medical Center) | | 4.00 | | 3/15/20 | | 1,700,000 | | 1,865,478 | |
Pennsylvania Turnpike Commission,
Turnpike Subordinate Revenue | | 5.00 | | 6/1/21 | | 2,135,000 | | 2,474,550 | |
Philadelphia,
Gas Works Revenue | | 5.00 | | 8/1/20 | | 4,335,000 | | 4,939,342 | |
12
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Pennsylvania - 3.1% (continued) | | | | | |
Philadelphia,
Gas Works Revenue | | 5.00 | | 10/1/21 | | 1,200,000 | | 1,402,320 | |
Philadelphia School District,
GO | | 5.00 | | 9/1/21 | | 4,250,000 | | 4,672,875 | |
| | 15,354,565 | |
Rhode Island - 1.0% | | | | | |
Rhode Island Health and Educational Building Corporation,
Hospital Financing Revenue (Lifespan Obligation Group Issue) | | 5.00 | | 5/15/21 | | 2,250,000 | | 2,590,268 | |
Tobacco Settlement Financing Corporation of Rhode Island,
Tobacco Settlement Asset-Backed Bonds | | 5.00 | | 6/1/20 | | 2,020,000 | | 2,244,806 | |
| | 4,835,074 | |
Tennessee - 1.9% | | | | | |
Metropolitan Government of Nashville and Davidson County,
GO | | 5.00 | | 7/1/20 | | 1,920,000 | | 2,203,680 | |
Tennessee Energy Acquisition Corporation,
Gas Project Revenue | | 5.25 | | 9/1/21 | | 2,000,000 | | 2,331,620 | |
Tennessee Energy Acquisition Corporation,
Gas Project Revenue (Guaranteed Agreement; Goldman Sachs Group, Inc.) | | 5.00 | | 2/1/21 | | 2,905,000 | | 3,301,416 | |
Tennessee State School Bond Authority,
Higher Educational Facilities Second Program Bonds | | 5.00 | | 11/1/19 | | 1,350,000 | | 1,516,901 | |
| | 9,353,617 | |
Texas - 14.7% | | | | | |
Arlington Independent School District,
Unlimited Tax School Building Bonds (Permanent School Fund Guarantee Program) | | 5.00 | | 2/15/19 | | 1,295,000 | | 1,419,307 | |
Central Texas Regional Mobility Authority,
Senior Lien Revenue | | 5.00 | | 1/1/21 | | 1,000,000 | | 1,149,450 | |
Dallas and Fort Worth,
Joint Revenue (Dallas/Fort Worth International Airport) | | 5.00 | | 11/1/18 | | 1,000,000 | | 1,081,500 | |
Dallas County,
Combination Tax and Parking Garage Revenue Certificates of Obligation | | 5.00 | | 8/15/20 | | 5,000,000 | | 5,759,300 | |
Dickinson Independent School District,
Unlimited Tax Bonds (Permanent School Fund Guarantee Program) | | 5.00 | | 2/15/20 | | 3,260,000 | | 3,687,321 | |
Harris County-Houston Sports Authority,
Senior Lien Revenue | | 5.00 | | 11/15/19 | | 1,500,000 | | 1,681,545 | |
Houston,
Combined Utility System First Lien Revenue | | 5.00 | | 11/15/19 | | 1,380,000 | | 1,550,761 | |
Houston,
Combined Utility System First Lien Revenue | | 1.74 | | 5/1/20 | | 5,000,000 | a | 4,977,500 | |
Houston,
Public Improvement GO | | 5.00 | | 3/1/18 | | 5,000,000 | | 5,287,700 | |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Texas - 14.7% (continued) | | | | | |
Houston,
Public Improvement GO | | 5.00 | | 3/1/20 | | 2,800,000 | | 3,162,124 | |
Houston Convention and Entertainment Facilities Department,
Hotel Occupancy Tax and Special Revenue | | 5.00 | | 9/1/20 | | 1,000,000 | | 1,144,220 | |
Lake Travis Independent School District,
Unlimited Tax School Building Bonds (Permanent School Fund Guarantee Program) | | 4.00 | | 2/15/18 | | 4,640,000 | | 4,838,221 | |
Love Field Airport Modernization Corporation,
General Airport Revenue | | 5.00 | | 11/1/20 | | 1,000,000 | | 1,143,890 | |
Love Field Airport Modernization Corporation,
Special Facilities Revenue (Southwest Airlines Company - Love Field Modernization Program Project) | | 5.00 | | 11/1/16 | | 2,340,000 | | 2,348,588 | |
Lower Colorado River Authority,
Transmission Contract Revenue (Lower Colorado River Authority Transmission Services Corporation Project) | | 4.00 | | 5/15/20 | | 1,000,000 | | 1,102,700 | |
Lower Colorado River Authority,
Transmission Contract Revenue (Lower Colorado River Authority Transmission Services Corporation Project) | | 5.00 | | 5/15/20 | | 1,075,000 | | 1,224,017 | |
North Texas Tollway Authority,
First Tier System Revenue | | 5.00 | | 1/1/20 | | 2,000,000 | | 2,247,840 | |
North Texas Tollway Authority,
First Tier System Revenue | | 5.00 | | 1/1/21 | | 1,000,000 | | 1,153,930 | |
North Texas Tollway Authority,
Second Tier System Revenue | | 5.00 | | 1/1/20 | | 1,025,000 | | 1,147,477 | |
Plano Independent School District,
Unlimited Tax Bonds (Permanent School Fund Guarantee Program) | | 5.00 | | 2/15/21 | | 2,040,000 | | 2,383,658 | |
Rockwall,
Improvement GO | | 5.00 | | 8/1/20 | | 4,695,000 | | 5,378,029 | |
San Antonio,
Electric and Gas Systems Junior Lien Revenue | | 5.00 | | 2/1/20 | | 6,000,000 | | 6,790,320 | |
San Antonio,
Water System Junior Lien Revenue | | 5.00 | | 5/15/19 | | 1,000,000 | | 1,105,640 | |
Texas,
GO (College Student Loan Bonds) | | 5.00 | | 8/1/21 | | 4,115,000 | | 4,845,701 | |
Texas Transportation Commission,
State Highway Fund Revenue | | 5.00 | | 10/1/20 | | 3,000,000 | | 3,469,680 | |
Waco,
Combination Tax and Revenue Certificates of Obligation | | 5.00 | | 2/1/20 | | 1,500,000 | | 1,693,365 | |
| | 71,773,784 | �� |
Utah - 1.5% | | | | | |
Intermountain Power Agency,
Subordinated Power Supply Revenue | | 4.00 | | 7/1/17 | | 5,000,000 | | 5,118,650 | |
14
| | | | | | | | | | | |
| |
Long-Term Municipal Investments - 97.8% (continued) | Coupon
Rate (%) | | Maturity
Date | | Principal
Amount ($) | | Value ($) | |
Utah - 1.5% (continued) | | | | | |
Intermountain Power Agency,
Subordinated Power Supply Revenue | | 5.00 | | 7/1/19 | | 2,000,000 | | 2,217,240 | |
| | 7,335,890 | |
Virginia - 1.3% | | | | | |
Fairfax County Industrial Development Authority,
Health Care Revenue (Inova Health System Project) | | 5.00 | | 5/15/21 | | 1,000,000 | | 1,178,870 | |
Virginia Public School Authority,
School Technology and Security Notes | | 5.00 | | 4/15/18 | | 5,000,000 | | 5,317,100 | |
| | 6,495,970 | |
Washington - 4.2% | | | | | |
Energy Northwest,
Electric Revenue (Columbia Generating Station) | | 5.00 | | 7/1/18 | | 5,000,000 | | 5,359,250 | |
Port of Seattle,
Intermediate Lien Revenue | | 5.00 | | 4/1/20 | | 3,000,000 | | 3,388,230 | |
Seattle,
Municipal Light and Power Revenue | | 5.00 | | 4/1/20 | | 2,000,000 | | 2,275,440 | |
Seattle,
Water System Improvement Revenue | | 5.00 | | 5/1/20 | | 2,500,000 | | 2,854,550 | |
Tobacco Settlement Authority of Washington,
Tobacco Settlement Revenue | | 5.00 | | 6/1/18 | | 3,650,000 | | 3,877,249 | |
Washington,
GO (Various Purpose) | | 5.00 | | 7/1/20 | | 2,465,000 | | 2,826,270 | |
| | 20,580,989 | |
Wisconsin - 1.1% | | | | | |
Public Finance Authority of Wisconsin,
Lease Development Revenue (KU Campus Development Corporation - Central District Development Project) | | 5.00 | | 3/1/20 | | 2,000,000 | | 2,250,760 | |
Wisconsin,
GO | | 5.00 | | 5/1/19 | | 3,000,000 | | 3,317,220 | |
| | 5,567,980 | |
Total Investments (cost $474,130,044) | | 97.8% | 478,422,397 | |
Cash and Receivables (Net) | | 2.2% | 10,833,316 | |
Net Assets | | 100.0% | 489,255,713 | |
a Variable rate security—rate shown is the interest rate in effect at period end.
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | |
Portfolio Summary (Unaudited) † | Value (%) |
Transportation Services | 22.6 |
Utility-Electric | 15.0 |
Education | 9.7 |
Special Tax | 8.0 |
City | 7.2 |
County | 5.9 |
State/Territory | 5.2 |
Utility-Water and Sewer | 4.8 |
Health Care | 3.8 |
Lease | 1.2 |
Resource Recovery | .8 |
Industrial | .2 |
Prerefunded | .2 |
Other | 13.2 |
| | 97.8 |
† Based on net assets.
See notes to financial statements.
16
| | | | |
| |
Summary of Abbreviations (Unaudited) |
| |
ABAG | Association of Bay Area
Governments | ACA | American Capital Access |
AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
AMBAC | American Municipal Bond
Assurance Corporation | ARRN | Adjustable Rate
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
Revenue | EIR | Environmental Improvement
Revenue |
FGIC | Financial Guaranty
Insurance Company | FHA | Federal Housing Administration |
FHLB | Federal Home
Loan Bank | FHLMC | Federal Home Loan Mortgage
Corporation |
FNMA | Federal National
Mortgage Association | GAN | Grant Anticipation Notes |
GIC | Guaranteed Investment
Contract | GNMA | Government National Mortgage
Association |
GO | General Obligation | HR | Hospital Revenue |
IDB | Industrial Development Board | IDC | Industrial Development Corporation |
IDR | Industrial Development
Revenue | LIFERS | Long Inverse Floating
Exempt Receipts |
LOC | Letter of Credit | LOR | Limited Obligation Revenue |
LR | Lease Revenue | MERLOTS | Municipal Exempt Receipts
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
Tax-Exempt Receipts | PUTTERS | Puttable Tax-Exempt Receipts |
RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
RAW | Revenue Anticipation Warrants | RIB | Residual Interest Bonds |
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
Adjustable Receipts |
SWDR | Solid Waste Disposal Revenue | TAN | Tax Anticipation Notes |
TAW | Tax Anticipation Warrants | TRAN | Tax and Revenue Anticipation Notes |
XLCA | XL Capital Assurance | | |
See notes to financial statements.
17
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2016 (Unaudited)
| | | | | | | |
| | | | | | |
| | | Cost | | Value | |
Assets ($): | | | | |
Investments in securities—See Statement of Investments | | 474,130,044 | | 478,422,397 | |
Cash | | | | | 14,165,077 | |
Interest receivable | | | | | 5,257,077 | |
Receivable for shares of Beneficial Interest subscribed | | | | | 528,223 | |
Prepaid expenses | | | | | 51,705 | |
| | | | | 498,424,479 | |
Liabilities ($): | | | | |
Due to The Dreyfus Corporation and affiliates—Note 3(c) | | | | | 224,735 | |
Payable for investment securities purchased | | | | | 8,643,260 | |
Payable for shares of Beneficial Interest redeemed | | | | | 217,453 | |
Accrued expenses | | | | | 83,318 | |
| | | | | 9,168,766 | |
Net Assets ($) | | | 489,255,713 | |
Composition of Net Assets ($): | | | | |
Paid-in capital | | | | | 484,484,297 | |
Accumulated net realized gain (loss) on investments | | | | | 479,063 | |
Accumulated net unrealized appreciation (depreciation)
on investments | | | | | 4,292,353 | |
Net Assets ($) | | | 489,255,713 | |
| | | | | | |
Net Asset Value Per Share | Class A | Class D | Class I | Class Y | |
Net Assets ($) | 60,304,960 | 306,115,680 | 122,776,974 | 58,099 | |
Shares Outstanding | 4,629,758 | 23,507,189 | 9,424,588 | 4,460 | |
Net Asset Value Per Share ($) | 13.03 | 13.02 | 13.03 | 13.03 | |
See notes to financial statements.
18
STATEMENT OF OPERATIONS
Six Months Ended September 30, 2016 (Unaudited)
| | | | | | | |
| | | | | | | |
| | | | | | |
| | | | | | |
Investment Income ($): | | | | |
Interest Income | | | 3,358,492 | |
Expenses: | | | | |
Management fee—Note 3(a) | | | 1,198,134 | |
Shareholder servicing costs—Note 3(c) | | | 152,707 | |
Distribution fees—Note 3(b) | | | 151,281 | |
Registration fees | | | 68,063 | |
Trustees’ fees and expenses—Note 3(d) | | | 61,093 | |
Professional fees | | | 52,757 | |
Custodian fees—Note 3(c) | | | 13,860 | |
Prospectus and shareholders’ reports | | | 9,465 | |
Loan commitment fees—Note 2 | | | 2,967 | |
Miscellaneous | | | 23,330 | |
Total Expenses | | | 1,733,657 | |
Less—reduction in expenses due to undertaking—Note 3(a) | | | (323,754) | |
Less—reduction in fees due to earnings credits—Note 3(c) | | | (843) | |
Net Expenses | | | 1,409,060 | |
Investment Income—Net | | | 1,949,432 | |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | | |
Net realized gain (loss) on investments | 320,260 | |
Net unrealized appreciation (depreciation) on investments | | | (479,115) | |
Net Realized and Unrealized Gain (Loss) on Investments | | | (158,855) | |
Net Increase in Net Assets Resulting from Operations | | 1,790,577 | |
| | | | | | | |
See notes to financial statements.
19
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | | | |
| | | | | | | | | | |
| | | | Six Months Ended
September 30, 2016 (Unaudited) | | | | Year Ended
March 31, 2016 | |
Operations ($): | | | | | | | | |
Investment income—net | | | 1,949,432 | | | | 3,440,716 | |
Net realized gain (loss) on investments | | 320,260 | | | | 614,552 | |
Net unrealized appreciation (depreciation)
on investments | | (479,115) | | | | 1,350,901 | |
Net Increase (Decrease) in Net Assets
Resulting from Operations | 1,790,577 | | | | 5,406,169 | |
Dividends to Shareholders from ($): | | | | | | | | |
Investment income—net: | | | | | | | | |
Class A | | | (213,420) | | | | (361,209) | |
Class D | | | (1,229,328) | | | | (2,372,786) | |
Class I | | | (506,394) | | | | (706,051) | |
Class Y | | | (290) | | | | (670) | |
Net realized gain on investments: | | | | | | | | |
Class A | | | - | | | | (174,232) | |
Class D | | | - | | | | (807,773) | |
Class I | | | - | | | | (242,138) | |
Class Y | | | - | | | | (185) | |
Total Dividends | | | (1,949,432) | | | | (4,665,044) | |
Beneficial Interest Transactions ($): | | | | | | | | |
Net proceeds from shares sold: | | | | | | | | |
Class A | | | 6,261,120 | | | | 39,111,327 | |
Class D | | | 31,590,014 | | | | 50,925,958 | |
Class I | | | 53,085,193 | | | | 156,974,903 | |
Dividends reinvested: | | | | | | | | |
Class A | | | 129,979 | | | | 347,350 | |
Class D | | | 1,125,881 | | | | 2,929,471 | |
Class I | | | 218,977 | | | | 379,518 | |
Class Y | | | - | | | | 154 | |
Cost of shares redeemed: | | | | | | | | |
Class A | | | (14,222,365) | | | | (12,167,747) | |
Class D | | | (34,443,138) | | | | (80,651,770) | |
Class I | | | (66,746,813) | | | | (59,687,731) | |
Class Y | | | (12,000) | | | | (25,000) | |
Increase (Decrease) in Net Assets
from Beneficial Interest Transactions | (23,013,152) | | | | 98,136,433 | |
Total Increase (Decrease) in Net Assets | (23,172,007) | | | | 98,877,558 | |
Net Assets ($): | | | | | | | | |
Beginning of Period | | | 512,427,720 | | | | 413,550,162 | |
End of Period | | | 489,255,713 | | | | 512,427,720 | |
20
| | | | | | | | | | |
| | | | Six Months Ended
September 30, 2016 (Unaudited) | | | | Year Ended
March 31, 2016 | |
Capital Share Transactions (Shares): | | | | | | | | |
Class A | | | | | | | | |
Shares sold | | | 478,857 | | | | 3,011,090 | |
Shares issued for dividends reinvested | | | 9,952 | | | | 26,705 | |
Shares redeemed | | | (1,088,524) | | | | (935,894) | |
Net Increase (Decrease) in Shares Outstanding | (599,715) | | | | 2,101,901 | |
Class D | | | | | | | | |
Shares sold | | | 2,419,486 | | | | 3,914,337 | |
Shares issued for dividends reinvested | | | 86,221 | | | | 225,290 | |
Shares redeemed | | | (2,637,623) | | | | (6,202,912) | |
Net Increase (Decrease) in Shares Outstanding | (131,916) | | | | (2,063,285) | |
Class I | | | | | | | | |
Shares sold | | | 4,064,461 | | | | 12,070,513 | |
Shares issued for dividends reinvested | | | 16,761 | | | | 29,157 | |
Shares redeemed | | | (5,109,823) | | | | (4,576,467) | |
Net Increase (Decrease) in Shares Outstanding | (1,028,601) | | | | 7,523,203 | |
Class Y | | | | | | | | |
Shares issued for dividends reinvested | | | - | | | | 12 | |
Shares redeemed | | | (918) | | | | (1,922) | |
Net Increase (Decrease) in Shares Outstanding | (918) | | | | (1,910) | |
| | | | | | | | | | |
See notes to financial statements.
21
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. 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 | |
| | September 30, 2016 | Year Ended March 31, |
Class A Shares | (Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 |
Per Share Data ($): | | | | | | |
Net asset value, beginning of period | 13.03 | 13.02 | 13.05 | 13.23 | 13.28 | 13.08 |
Investment Operations: | | | | | | |
Investment income—neta | .04 | .08 | .08 | .11 | .14 | .19 |
Net realized and unrealized
gain (loss) on investments | (.00)b | .04 | .04 | (.06) | .02 | .20 |
Total from
Investment Operations | .04 | .12 | .12 | .05 | .16 | .39 |
Distributions: | | | | | | |
Dividends from
investment income—net | (.04) | (.08) | (.08) | (.11) | (.14) | (.19) |
Dividends from net realized
gain on investments | - | (.03) | (.07) | (.12) | (.07) | - |
Total Distributions | (.04) | (.11) | (.15) | (.23) | (.21) | (.19) |
Net asset value, end of period | 13.03 | 13.03 | 13.02 | 13.05 | 13.23 | 13.28 |
Total Return (%)c | .33d | .95 | .87 | .43 | 1.13 | 3.02 |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | .87e | .86 | .87 | .84 | .84 | .84 |
Ratio of net expenses
to average net assets | .74e | .74 | .74 | .74 | .79 | .84 |
Ratio of net investment income
to average net assets | .66e | .61 | .59 | .82 | 1.06 | 1.47 |
Portfolio Turnover Rate | 15.18d | 20.92 | 32.84 | 34.38 | 27.16 | 30.99 |
Net Assets, end of period ($ x 1,000) | 60,305 | 68,148 | 40,721 | 49,911 | 61,862 | 47,011 |
a Based on average shares outstanding.
b Amount represents less than $.01 per share.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
See notes to financial statements.
22
| | | | | | | | | |
| | Six Months Ended | |
| | September 30, 2016 | Year Ended March 31, |
Class D Shares | (Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 |
Per Share Data ($): | | | | | | |
Net asset value, beginning of period | 13.03 | 13.02 | 13.05 | 13.23 | 13.27 | 13.08 |
Investment Operations: | | | | | | |
Investment income—neta | .05 | .10 | .10 | .13 | .16 | .21 |
Net realized and unrealized
gain (loss) on investments | (.01) | .04 | .04 | (.06) | .03 | .19 |
Total from
Investment Operations | .04 | .14 | .14 | .07 | .19 | .40 |
Distributions: | | | | | | |
Dividends from
investment income—net | (.05) | (.10) | (.10) | (.13) | (.16) | (.21) |
Dividends from net realized
gain on investments | - | (.03) | (.07) | (.12) | (.07) | - |
Total Distributions | (.05) | (.13) | (.17) | (.25) | (.23) | (.21) |
Net asset value, end of period | 13.02 | 13.03 | 13.02 | 13.05 | 13.23 | 13.27 |
Total Return (%) | .33b | 1.10 | 1.02 | .58 | 1.36 | 3.10 |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | .73c | .72 | .72 | .70 | .69 | .69 |
Ratio of net expenses
to average net assets | .59c | .59 | .59 | .59 | .64 | .69 |
Ratio of net investment income
to average net assets | .81c | .75 | .74 | .97 | 1.22 | 1.61 |
Portfolio Turnover Rate | 15.18b | 20.92 | 32.84 | 34.38 | 27.16 | 30.99 |
Net Assets, end of period ($ x 1,000) | 306,116 | 307,975 | 334,580 | 385,943 | 476,785 | 488,869 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
23
FINANCIAL HIGHLIGHTS (continued)
| | | | | | | | | |
| | Six Months Ended | |
| | September 30, 2016 | Year Ended March 31, |
Class I Shares | (Unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 |
Per Share Data ($): | | | | | | |
Net asset value, beginning of period | 13.03 | 13.02 | 13.05 | 13.23 | 13.28 | 13.08 |
Investment Operations: | | | | | | |
Investment income—neta | .06 | .11 | .11 | .14 | .18 | .23 |
Net realized and unrealized
gain (loss) on investments | (.00)b | .04 | .04 | (.06) | .01 | .19 |
Total from
Investment Operations | .06 | .15 | .15 | .08 | .19 | .42 |
Distributions: | | | | | | |
Dividends from
investment income—net | (.06) | (.11) | (.11) | (.14) | (.17) | (.22) |
Dividends from net realized
gain on investments | - | (.03) | (.07) | (.12) | (.07) | - |
Total Distributions | (.06) | (.14) | (.18) | (.26) | (.24) | (.22) |
Net asset value, end of period | 13.03 | 13.03 | 13.02 | 13.05 | 13.23 | 13.28 |
Total Return (%) | .46c | 1.20 | 1.12 | .60 | 1.46 | 3.26 |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | .63d | .64 | .65 | .63 | .61 | .60 |
Ratio of net expenses
to average net assets | .49d | .49 | .49 | .49 | .55 | .60 |
Ratio of net investment income
to average net assets | .90d | .85 | .84 | 1.06 | 1.31 | 1.70 |
Portfolio Turnover Rate | 15.18c | 20.92 | 32.84 | 34.38 | 27.16 | 30.99 |
Net Assets, end of period ($ x 1,000) | 122,777 | 136,235 | 38,154 | 36,159 | 30,305 | 31,427 |
a Based on average shares outstanding.
b Amount represents less than $.01 per share.
c Not annualized.
d Annualized.
See notes to financial statements.
24
| | | | | |
| | Six Months Ended | |
| | September 30, 2016 | Year Ended March 31, |
Class Y Shares | (Unaudited) | 2016 | 2015 | 2014a |
Per Share Data ($): | | | | |
Net asset value, beginning of period | 13.03 | 13.02 | 13.05 | 13.08 |
Investment Operations: | | | | |
Investment income—netb | .06 | .11 | .11 | .11 |
Net realized and unrealized
gain (loss) on investments | (.00)c | .04 | .04 | .09 |
Total from
Investment Operations | .06 | .15 | .15 | .20 |
Distributions: | | | | |
Dividends from
investment income—net | (.06) | (.11) | (.11) | (.11) |
Dividends from net realized
gain on investments | - | (.03) | (.07) | (.12) |
Total Distributions | (.06) | (.14) | (.18) | (.23) |
Net asset value, end of period | 13.03 | 13.03 | 13.02 | 13.05 |
Total Return (%) | .46d | 1.21 | 1.13 | 1.53d |
Ratios/Supplemental Data (%): | | | | |
Ratio of total expenses
to average net assets | .70e | .65 | .70 | .55e |
Ratio of net expenses
to average net assets | .49e | .49 | .49 | .49e |
Ratio of net investment income
to average net assets | .92e | .85 | .83 | 1.14e |
Portfolio Turnover Rate | 15.18d | 20.92 | 32.84 | 34.38 |
Net Assets, end of period ($ x 1,000) | 58 | 70 | 95 | 1 |
a From July 1, 2013 (commencement of initial offering) to March 31, 2014.
b Based on average shares outstanding.
c Amount represents less than $.01 per share.
d Not annualized.
e Annualized.
See notes to financial statements.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Short-Intermediate Municipal Bond Fund (the “fund”) is the sole series of Dreyfus Premier Short-Intermediate Municipal Bond Fund (the “Company”), which 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 to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. 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 Dreyfus, is the distributor of the fund’s shares. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Class A, Class D, Class I and Class Y. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class D shares are sold at net asset value per share directly by Dreyfus and through certain banks and fund supermarkets, and as a part of certain wrap-fee programs. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 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 Company 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.
26
(a) Portfolio valuation: 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.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities are valued each business day by an independent pricing service (the “Service”) approved by the Company’s Board of Trustees (the “Board”). Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of the following: yields or prices of municipal securities of comparable quality, coupon,
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
maturity and type; indications as to values from dealers; and general market conditions. All of the preceding securities are generally categorized within Level 2 of the fair value hierarchy.
The Service’s procedures are reviewed by Dreyfus under the general supervision of the Board.
When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of September 30, 2016 in valuing the fund’s investments:
| | | | | |
| | Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable
Inputs | Level 3 -Significant Unobservable Inputs | Total |
Assets ($) | | | | |
Investments in Securities: | | | | |
Municipal Bonds† | – | 478,422,397 | – | 478,422,397 |
† See Statement of Investments for additional detailed categorizations.
At September 30, 2016, there were no transfers between levels of the fair value hierarchy.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost 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. Securities purchased or sold on a when issued or delayed delivery basis may be settled a month or more after the trade date.
28
(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 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. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(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 September 30, 2016, 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 ended September 30, 2016, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended March 31, 2016 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 March 31, 2016 was as follows: tax-exempt income $3,440,716, ordinary income $184,511 and long-term capital gains $1,039,817. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $555 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended September 30, 2016, the fund did not borrow under the Facilities.
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with Dreyfus, 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 monthly. Dreyfus has contractually agreed, from April 1, 2016 through August 1, 2017, to waive receipt of its fees and/or assume the expenses of the fund so that the expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .49% of the value of the fund’s average daily net assets. The reduction in expenses, pursuant to the undertaking, amounted to $323,754 during the period ended September 30, 2016.
During the period ended September 30, 2016, the Distributor retained $1,214 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class D shares pay the Distributor for distributing its shares at an annual rate of .10% of the value of its average daily net assets. During the period ended September 30, 2016, Class D shares were charged $151,281 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A shares pay the Distributor at an annual rate of .25% of the value of its average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended September 30, 2016, Class A shares were charged $80,640, 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 Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of
30
transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended September 30, 2016, the fund was charged $34,718 for transfer agency services and $1,814 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were partially offset by earnings credits of $842.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended September 30, 2016, the fund was charged $13,860 pursuant to the custody agreement.
The fund compensates The Bank of New York Mellon under a shareholder redemption draft processing agreement for providing certain services related to the fund’s check writing privilege. During the period ended September 30, 2016, the fund was charged $954 pursuant to the agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $1.
During the period ended September 30, 2016, the fund was charged $4,812 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 $197,845, Distribution Plan fees $24,842, Shareholder Services Plan fees $12,461, custodian fees $19,145, Chief Compliance Officer fees $7,217 and transfer agency fees $13,129, which are offset against an expense reimbursement currently in effect in the amount of $49,904.
(d) 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.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended September 30, 2016, amounted to $71,920,202 and $88,520,413, respectively.
At September 30, 2016, accumulated net unrealized appreciation on investments was $4,293,353, consisting of $4,522,536 gross unrealized appreciation and $230,183 gross unrealized depreciation.
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At September 30, 2016, 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).
32
INFORMATION ABOUT THE RENEWAL OF THE FUND'S MANAGEMENT AGREEMENT (Unaudited)
At a meeting of the fund’s Board of Trustees held on July 20-21, 2016, 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, a majority of whom are not “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 provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. 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.
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), 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 May 31, 2016, and (2) the fund’s actual and contractual management fees and total expenses
33
INFORMATION ABOUT THE RENEWAL OF THE FUND'S MANAGEMENT AGREEMENT (Unaudited) (continued)
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 Broadridge as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Broadridge 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 above the Performance Group and Performance Universe medians for all periods (ranking in the first quartile for the one-, two- and three-year periods). The Board also noted that the fund’s yield performance was at or above the Performance Group median for nine of the ten one-year periods ended May 31st and above the Performance Universe median for six of the ten one-year periods ended May 31st. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s Broadridge category average.
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, and that the fund’s actual management fee and total expenses were above the Expense Group and Expense Universe medians (by less than four basis points in each case).
Dreyfus representatives noted that Dreyfus has contractually agreed to waive receipt of its fees and/or assume the expenses of the fund, until August 1, 2017, so that annual direct fund operating expenses (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) do not exceed .49% of the fund’s average daily net assets.
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 Broadridge 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
34
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 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 its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to Dreyfus and its affiliates for 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 the profitability of Dreyfus and its affiliates. 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 firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
The Board considered, on the advice of its counsel, the profitability analysis (1) as part of its evaluation of whether the fees under the Agreement, considered in relation to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, supported the renewal of the Agreement 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 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.
35
INFORMATION ABOUT THE RENEWAL OF THE FUND'S MANAGEMENT AGREEMENT (Unaudited) (continued)
· 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.
· The Board concluded that the fee paid to Dreyfus supported the renewal of the Agreement in light of the considerations described above.
· 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, 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 to renew the Agreement.
36
NOTES
37
Dreyfus Short-Intermediate Municipal Bond Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
225 Liberty Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
| | |
Ticker Symbols: | Class A: DMBAX Class D: DSIBX Class I: DIMIX Class Y: DMYBX |
Telephone Call your financial representative or 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 www.dreyfus.com
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 www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. (phone 1-800-SEC-0330 for information).
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
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© 2016 MBSC Securities Corporation
6219SA0916 | 
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