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 811-5160
DREYFUS NEW YORK AMT-FREE MUNICIPAL MONEY MARKET
(Exact name of Registrant as specified in charter)
c/o The Dreyfus Corporation | ||
200 Park Avenue | ||
New York, New York 10166 | ||
(Address of principal executive offices) | (Zip code) |
Michael A. Rosenberg, Esq. |
200 Park Avenue |
New York, New York 10166 |
(Name and address of agent for service) |
Registrant's telephone number, including area code: | (212) 922-6000 | |||
Date of fiscal year end: | 05/31 | |||
Date of reporting period: | 11/30/08 |
FORM N-CSR |
Item 1. Reports to Stockholders.
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.
The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Contents | |
THE FUND | |
2 | A Letter from the CEO |
3 | Discussion of Fund Performance |
6 | Understanding Your Fund’s Expenses |
6 | Comparing Your Fund’s Expenses With Those of Other Funds |
7 | Statement of Investments |
18 | Statement of Assets and Liabilities |
19 | Statement of Operations |
20 | Statement of Changes in Net Assets |
21 | Financial Highlights |
22 | Notes to Financial Statements |
29 | Information About the Review and Approval of the Fund’s Management Agreement |
FOR MORE INFORMATION | |
Back Cover | |
The Fund |
Dreyfus New York AMT-Free Municipal Money Market Fund |
A LETTER FROM THE CEO Dear Shareholder: |
We present this semiannual report for Dreyfus New York AMT-Free Municipal Money Market Fund, covering the six-month period from June 1, 2008, through November 30, 2008.
The U.S. and global economies suffered during the reporting period amid a financial crisis that sparked declines in virtually all areas of the financial markets.According to our Chief Economist, four key elements fueled the crisis: a sharp decline in home prices; high leverage and an ambiguous private/public status at mortgage agencies Fannie Mae and Freddie Mac; high leverage among financial institutions, especially investment banks; and regulatory policies and behaviors that exacerbated financial stresses.
The federal government subsequently stepped in with a number of measures, including aTemporary Guarantee Program for Money Market Funds and a $700 billion rescue package intended to promote greater liquidity in the financial markets. However, the U.S. and global financial systems remain fragile, and economic weakness is likely to persist.
In our view, today’s investment environment is rife with near-term challenges and long-term opportunities. Now more than ever, it is important to ensure that your investments are aligned with your current needs, future goals and attitudes toward risk. We urge you to speak regularly with your financial advisor, who can recommend the course of action that is right for you.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.
Thank you for your continued confidence and support.
Jonathan R. Baum Chief Executive Officer The Dreyfus Corporation December 15, 2008 |
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2008, through November 30, 2008, as provided by Joseph Irace, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended November 30, 2008, Dreyfus NewYork AMT-Free Municipal Money Market Fund produced an annualized yield of 1.77% .Taking into account the effects of compounding, the fund produced an annualized effective yield of 1.78% .1
Tax-exempt money market instruments were influenced by a faltering U.S. economy and an intensifying financial crisis during the reporting period.
The Fund’s Investment Approach
The fund seeks 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 fund also seeks to provide income exempt from the federal Alternative Minimum Tax (“AMT”).
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, New York state and New York 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.
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,
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued) |
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 Slump and Financial Crisis Roiled Money Markets
By the start of the reporting period, economic conditions had already begun to deteriorate as a result of weakness in housing markets, rising unemployment and declining consumer confidence. In response, the Federal Reserve Board (the “Fed”) aggressively reduced the overnight federal funds rate, which began the reporting period at 2%.
Meanwhile, a credit crisis intensified as mortgage foreclosure rates surged and institutional investors continued to de-lever their portfolios, selling their more liquid and creditworthy holdings to meet margin calls resulting from severe losses in mortgage- and asset-backed securities. Despite efforts by regulators to contain the credit crunch, it mushroomed into a global financial crisis over the summer of 2008, leading to the failures and government bailouts of several major financial institutions.
The money markets were not immune to the financial crisis, as credit concerns caused dislocations among short-term money market instruments, including tax-exempt variable rate demand notes (“VRDNs”), and a surge in redemptions from some funds. In an effort to shore up investor confidence and help restore stability to the financial system, the U.S. Department of the Treasury initiated several remedial measures, including the Temporary Guarantee Program specifically for money market funds.
With the Fed and U.S.Treasury supporting banks and short-term lending, much of the stress in the system appeared to have been mitigated by the reporting period’s end. Although liquidity concerns regarding VRDNs pushed their yields higher in September, the VRDN market subsequently stabilized, with liquidity and yields returning to normalized levels and tax-exempt money market funds seeing positive cash flows.
The financial crisis and economic downturn put pressure on the fiscal conditions of the state and city of NewYork, which were undermined
4
by massive job losses on Wall Street. As of the reporting period’s end, both the state and city were searching for ways to bridge projected revenue shortfalls.
Independent Research Helps Avoid Credit Problems
As always, we have invested exclusively in direct, high-quality municipal obligations that have been independently approved by our credit analysts. In light of the issues confronting the market, we maintained a conservative credit selection strategy, including increased credit surveillance of the fund’s holdings.
Over much of the reporting period, we set the fund’s weighted average maturity in a range that was longer than industry averages to capture higher yields for as long as we deemed practical while interest rates fell. However, we recently shortened the fund’s weighted average maturity to weather the dislocations caused by the financial crisis.This enabled us to take greater advantage of the outsized yields offered by VRDNs at the time.
Maintaining a Conservative Investment Posture
As the financial crisis persisted, the Fed reduced short-term interest rates further, including a coordinated rate cut with other central banks around the world. Consequently, the federal funds rate ended the reporting period at just 1%. Furthermore, in December the Fed cut the federal funds rate to a range of 0% – 0.25% in its latest effort to support the credit markets and economic activity.We intend to maintain the fund’s conservative credit selection strategy and current weighted average maturity until we are confident that the crisis and volatility that typically affects the tax-exempt money markets at year-end have passed.
December 16, 2008
An investment in the fund is not insured or guaranteed by the FDIC or any other government | ||
agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is | ||
possible to lose money by investing in the fund. | ||
1 | Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past | |
performance is no guarantee of future results.Yields fluctuate. Income may be subject to state and | ||
local taxes for non-NewYork residents. |
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus New York AMT-Free Municipal Money Market Fund from June 1, 2008 to November 30, 2008. 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, 2008 |
Expenses paid per $1,000† | $ 3.32 | |
Ending value (after expenses) | $1,008.90 |
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, 2008 |
Expenses paid per $1,000† | $ 3.35 | |
Ending value (after expenses) | $1,021.76 |
† Expenses are equal to the fund’s annualized expense ratio of .66%, multiplied by the average account value over the |
period, multiplied by 183/365 (to reflect the one-half year period). |
6
STATEMENT OF INVESTMENTS |
November 30, 2008 (Unaudited) |
Short-Term | Coupon | Maturity | Principal | ||||||
Investments—98.3% | Rate (%) | Date | Amount ($) | Value ($) | |||||
Albany Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(Albany College of Pharmacy | |||||||||
Project) (LOC; TD Banknorth NA) | 0.90 | 12/7/08 | 4,530,000 | a | 4,530,000 | ||||
Albany Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(Renaissance Corporation of | |||||||||
Albany Project) (LOC; M&T Bank) | 2.10 | 12/7/08 | 2,800,000 | a | 2,800,000 | ||||
Alexandria Bay, | |||||||||
GO Notes, BAN | 3.75 | 9/17/09 | 2,375,000 | 2,402,683 | |||||
Allegany County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Houghton | |||||||||
College Project) (LOC; Key Bank) | 1.70 | 12/7/08 | 4,235,000 | a | 4,235,000 | ||||
Amherst Industrial Development | |||||||||
Agency, Multi-Mode Civic | |||||||||
Facility Revenue (Daemen | |||||||||
College Project) (LOC; | |||||||||
Wachovia Bank) | 2.55 | 12/7/08 | 4,350,000 | a | 4,350,000 | ||||
Avoca Central School District, | |||||||||
GO Notes, BAN | 3.00 | 6/26/09 | 3,000,000 | 3,014,156 | |||||
Avon Central School District, | |||||||||
GO Notes, BAN | 2.75 | 6/23/09 | 1,721,500 | 1,729,043 | |||||
Bleecker Terrace Housing | |||||||||
Development Corporation, | |||||||||
Housing Development Revenue | |||||||||
(Bleecker Terrace Apartments | |||||||||
Project) (LOC; FHLB) | 2.07 | 12/7/08 | 1,570,000 | a | 1,570,000 | ||||
Cazenovia Central School District, | |||||||||
GO Notes, BAN | 2.75 | 6/5/09 | 1,650,288 | 1,656,049 | |||||
Chautauqua County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (United | |||||||||
Cerebral Palsy Project) | |||||||||
(LOC; Key Bank) | 2.30 | 12/7/08 | 865,000 | a | 865,000 | ||||
Clinton County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Champlain | |||||||||
Valley Physicians Hospital | |||||||||
Medical Center Project) | |||||||||
(Liquidity Facility; Key Bank) | 1.50 | 12/7/08 | 4,070,000 | a | 4,070,000 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
Dutchess County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue, Refunding | |||||||||
(Lutheran Center at | |||||||||
Poughkeepsie, Inc. Project) | |||||||||
(LOC; Key Bank) | 2.50 | 12/7/08 | 1,800,000 | a | 1,800,000 | ||||
East Hampton, | |||||||||
GO Notes, BAN | 2.00 | 6/4/09 | 1,400,000 | 1,401,391 | |||||
East Quogue Union Free School | |||||||||
District, GO Notes, TAN | 2.75 | 6/26/09 | 500,000 | 501,110 | |||||
Erie County Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(Community Services Disabled | |||||||||
Project) (LOC; Key Bank) | 2.00 | 12/7/08 | 2,500,000 | a | 2,500,000 | ||||
Erie County Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(DePaul Community Facilities, | |||||||||
Inc. Project) (LOC; Key Bank) | 2.30 | 12/7/08 | 1,200,000 | a | 1,200,000 | ||||
Erie County Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(Every Person Influences | |||||||||
Children, Inc. Project) (LOC; | |||||||||
Fifth Third Bank) | 3.00 | 12/7/08 | 1,265,000 | a | 1,265,000 | ||||
Erie County Industrial Development | |||||||||
Agency, Civic Facility | |||||||||
Revenue (People Inc. Project) | |||||||||
(LOC; Key Bank) | 1.70 | 12/7/08 | 2,005,000 | a | 2,005,000 | ||||
Erie County Industrial Development | |||||||||
Agency, Civic Facility | |||||||||
Revenue (United Cerebral | |||||||||
Palsy Association Project) | |||||||||
(LOC; Key Bank) | 2.30 | 12/7/08 | 585,000 | a | 585,000 | ||||
Grand Central District Management | |||||||||
Association, Inc., Grand | |||||||||
Central Business Improvement | |||||||||
District, Revenue, Refunding | |||||||||
(Capital Improvement) | 5.00 | 1/1/09 | 125,000 | 125,227 | |||||
Hamburg Central School District, | |||||||||
GO Notes, BAN | 3.35 | 7/2/09 | 4,300,000 | 4,327,477 | |||||
Hammond Central School District, | |||||||||
GO Notes, BAN | 3.50 | 9/11/09 | 963,209 | 971,258 |
8
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
Herkimer County Industrial | |||||||||
Development Agency, Civic Facility | |||||||||
Revenue (Templeton Foundation | |||||||||
Project) (LOC; Key Bank) | 1.70 | 12/7/08 | 1,435,000 | a | 1,435,000 | ||||
Hudson Yards Infrastructure | |||||||||
Corporation, Hudson Yards | |||||||||
Senior Revenue (Insured; FSA | |||||||||
and Liquidity Facility; | |||||||||
Citibank NA) | 1.62 | 12/7/08 | 13,800,000 | a,b | 13,800,000 | ||||
Ithaca, | |||||||||
GO Notes, BAN | 3.00 | 8/7/09 | 1,334,450 | 1,342,916 | |||||
Lancaster Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(GreenField Manor, Inc. | |||||||||
Project) (LOC; M&T Bank) | 1.17 | 12/7/08 | 300,000 | a | 300,000 | ||||
Laurens Central School District, | |||||||||
GO Notes, BAN | 2.10 | 6/25/09 | 1,000,000 | 1,000,553 | |||||
Long Island Power Authority, | |||||||||
Electric System Subordinated | |||||||||
Revenue (LOC; Bayerische | |||||||||
Landesbank) | 1.00 | 12/1/08 | 15,000,000 | a | 15,000,000 | ||||
Metropolitan Transportation | |||||||||
Authority, Dedicated Tax Fund | |||||||||
Bonds (Insured; FSA and | |||||||||
Liquidity Facility; Dexia | |||||||||
Credit Locale) | 3.50 | 12/7/08 | 17,500,000 | a | 17,500,000 | ||||
Metropolitan Transportation | |||||||||
Authority, Transportation | |||||||||
Revenue (Insured; Berkshire | |||||||||
Hathaway Assurance Corporation | |||||||||
and Liquidity Facility; Citigroup Inc.) | 1.15 | 12/7/08 | 6,615,000 | a,b | 6,615,000 | ||||
Monroe County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (YMCA of | |||||||||
Greater Rochester Project) | |||||||||
(LOC; M&T Bank) | 1.03 | 12/7/08 | 2,300,000 | a | 2,300,000 | ||||
Monroe County Industrial | |||||||||
Development Agency, IDR | |||||||||
(National Development Council | |||||||||
Multi-Issue Facilities) (LOC; | |||||||||
HSBC Bank USA) | 2.97 | 12/15/08 | 500,000 | 500,000 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
Naples Central School District, | |||||||||
GO Notes, BAN | 2.25 | 6/16/09 | 1,150,000 | 1,152,129 | |||||
Nassau County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (North Shore | |||||||||
Hebrew Academy High School | |||||||||
Project) (LOC; Comerica Bank) | 1.08 | 12/7/08 | 11,545,000 | a | 11,545,000 | ||||
Nassau County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Saint Mary’s | |||||||||
Children Project) (LOC; | |||||||||
Commerce Bank) | 1.18 | 12/7/08 | 1,705,000 | a | 1,705,000 | ||||
New York City, | |||||||||
GO Notes | 5.75 | 5/15/09 | 985,000 | 1,001,446 | |||||
New York City, | |||||||||
GO Notes | 5.00 | 8/1/09 | 400,000 | 407,996 | |||||
New York City, | |||||||||
GO Notes (Liquidity Facility; | |||||||||
Landesbank Hessen-Thuringen | |||||||||
Girozentrale) | 1.00 | 12/1/08 | 2,600,000 | a | 2,600,000 | ||||
New York City, | |||||||||
GO Notes (LOC; Bank of America) | 1.15 | 12/1/08 | 24,900,000 | a | 24,900,000 | ||||
New York City | |||||||||
GO Notes (LOC; Landesbank | |||||||||
Baden-Wurttemberg) | 1.00 | 12/1/08 | 1,205,000 | a | 1,205,000 | ||||
New York City, | |||||||||
GO Notes (LOC; JPMorgan | |||||||||
Chase Bank) | 0.75 | 12/1/08 | 3,000,000 | a | 3,000,000 | ||||
New York City Housing Development | |||||||||
Corporation, Multi-Family | |||||||||
Rental Housing Revenue (2 Gold | |||||||||
Street) (Liquidity Facility; | |||||||||
FNMA and LOC; FNMA) | 0.70 | 12/7/08 | 6,000,000 | a | 6,000,000 | ||||
New York City Housing Development | |||||||||
Corporation, Residential Revenue | |||||||||
(Queens College Residences) | |||||||||
(LOC; RBS Citizens NA) | 0.90 | 12/7/08 | 2,200,000 | a | 2,200,000 | ||||
New York City Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Birch Wathen | |||||||||
Lenox School Project) (LOC; | |||||||||
Allied Irish Banks) | 1.08 | 12/7/08 | 5,150,000 | a | 5,150,000 |
10
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
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 Bank) | 1.13 | 12/7/08 | 1,950,000 | a | 1,950,000 | ||||
New York City Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Jewish | |||||||||
Community Center on the Upper | |||||||||
West Side, Inc. Project) (LOC; | |||||||||
M&T Bank) | 1.08 | 12/7/08 | 4,700,000 | a | 4,700,000 | ||||
New York City Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Lycee | |||||||||
Francais de New York Project) | |||||||||
(LOC; TD Banknorth NA) | 0.98 | 12/7/08 | 5,000,000 | a | 5,000,000 | ||||
New York City Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Mercy | |||||||||
College Project) (LOC; Key Bank) | 2.50 | 12/7/08 | 1,800,000 | a | 1,800,000 | ||||
New York City Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (The | |||||||||
Professional Children’s School | |||||||||
Project) (LOC; Wachovia Bank) | 1.32 | 12/7/08 | 1,900,000 | a | 1,900,000 | ||||
New York City Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Village | |||||||||
Community School Project) | |||||||||
(LOC; M&T Bank) | 1.13 | 12/7/08 | 1,100,000 | a | 1,100,000 | ||||
New York City Municipal Water | |||||||||
Finance Authority, Water and | |||||||||
Sewer System Revenue | |||||||||
(Liquidity Facility; Lloyds | |||||||||
TSB Bank PLC) | 0.75 | 12/1/08 | 14,025,000 | a | 14,025,000 | ||||
New York Local Government | |||||||||
Assistance Corporation, | |||||||||
Subordinate Lien | |||||||||
Revenue, Refunding | 5.00 | 4/1/09 | 500,000 | 504,890 |
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
New York State Dormitory | |||||||||
Authority, Revenue (Mount | |||||||||
Saint Mary College) (LOC; | |||||||||
JPMorgan Chase Bank) | 1.10 | 12/7/08 | 8,800,000 | a | 8,800,000 | ||||
New York State Dormitory | |||||||||
Authority, Revenue (Park Ridge | |||||||||
Hospital, Inc.) (LOC; JPMorgan | |||||||||
Chase Bank) | 1.15 | 12/7/08 | 4,700,000 | a | 4,700,000 | ||||
New York State Urban Development | |||||||||
Corporation, COP (James A. | |||||||||
Farley Post Office Project) | |||||||||
(Liquidity Facility; Citigroup | |||||||||
Inc. and LOC; Citigroup Inc.) | 1.03 | 12/7/08 | 5,600,000 | a,b | 5,600,000 | ||||
Newfane Central School District | |||||||||
GO Notes, BAN | 2.75 | 7/10/09 | 2,100,000 | 2,106,834 | |||||
North Hempstead Town, | |||||||||
GO Notes, BAN | 3.00 | 6/26/09 | 800,000 | 803,548 | |||||
North Syracuse Central School | |||||||||
District, GO Notes, BAN | 2.50 | 6/19/09 | 2,965,459 | 2,974,217 | |||||
Oneonta City School District, | |||||||||
GO Notes, BAN | 2.75 | 6/24/09 | 2,500,000 | 2,507,554 | |||||
Ontario County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Friends of | |||||||||
the Finger Lakes Performing | |||||||||
Arts Center, Inc. Civic | |||||||||
Facility) (LOC; Citizens | |||||||||
Bank of Massachusetts) | 1.08 | 12/7/08 | 3,335,000 | a | 3,335,000 | ||||
Oswego County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Springside | |||||||||
at Seneca Hill, Inc. Project) | |||||||||
(LOC; M&T Bank) | 1.13 | 12/7/08 | 2,560,000 | a | 2,560,000 | ||||
Otsego County Industrial | |||||||||
Development Agency, | |||||||||
Civic Facility Revenue | |||||||||
(Saint James Retirement | |||||||||
Community Project) | |||||||||
(LOC; M&T Bank) | 1.08 | 12/7/08 | 2,060,000 | a | 2,060,000 |
12
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
Otsego County Industrial | |||||||||
Development Agency, Civic Facility | |||||||||
Revenue (Templeton Foundation | |||||||||
Project) (LOC; Key Bank) | 2.00 | 12/7/08 | 3,000,000 | a | 3,000,000 | ||||
Oyster Bay-East Norwich Central | |||||||||
School District, GO Notes, TAN | 2.75 | 6/26/09 | 1,000,000 | 1,003,624 | |||||
Plattsburgh, | |||||||||
BAN (Municipal Lighting) | 2.50 | 6/19/09 | 2,000,000 | 2,005,907 | |||||
Port Authority of New York and | |||||||||
New Jersey, Equipment Notes | 1.09 | 12/7/08 | 2,800,000 | a | 2,800,000 | ||||
Putnam County Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(United Cerebral Palsy of Putnam | |||||||||
and Southern Dutchess Project) | |||||||||
(LOC; Commerce Bank N.A.) | 1.03 | 12/7/08 | 4,300,000 | a | 4,300,000 | ||||
Rensselaer County Industrial | |||||||||
Development Agency, Civic Facility | |||||||||
Revenue (The Sage Colleges | |||||||||
Project) (LOC; M&T Bank) | 2.10 | 12/7/08 | 4,670,000 | a | 4,670,000 | ||||
Rockland County, | |||||||||
GO Notes, BAN | 2.50 | 4/24/09 | 270,000 | 270,000 | |||||
Rockland County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Dominican | |||||||||
College of Blauvelt Project) | |||||||||
(LOC; Commerce Bank N.A.) | 1.08 | 12/7/08 | 8,400,000 | a | 8,400,000 | ||||
Rockland County Industrial | |||||||||
Development Authority, Revenue | |||||||||
(Northern Manor Multicare | |||||||||
Center, Inc. Project) (LOC; | |||||||||
M&T Bank) | 1.13 | 12/7/08 | 2,900,000 | a | 2,900,000 | ||||
Seaford Union Free School | |||||||||
District, GO Notes, BAN | 2.75 | 7/17/09 | 1,000,000 | 1,004,591 | |||||
Seneca County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Kidspace | |||||||||
National Centers of New York | |||||||||
Project) (LOC; Key Bank) | 1.70 | 12/7/08 | 1,445,000 | a | 1,445,000 |
The Fund 13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Short-Term | Coupon | Maturity | Principal | ||||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |||||
Sewanhaka Central School District | |||||||||
of Elmont, Floral Park, | |||||||||
Franklin Square and New Hyde | |||||||||
Park, GO Notes, TAN | 2.75 | 6/29/09 | 2,500,000 | 2,507,787 | |||||
Suffolk County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Hampton Day | |||||||||
School Civic Facility) (LOC; | |||||||||
JPMorgan Chase Bank) | 1.17 | 12/7/08 | 2,725,000 | a | 2,725,000 | ||||
Syracuse Industrial Development | |||||||||
Agency, Civic Facility Revenue | |||||||||
(Community Development | |||||||||
Properties-Larned Project) | |||||||||
(LOC; M&T Bank) | 2.10 | 12/7/08 | 2,200,000 | a | 2,200,000 | ||||
Tobacco Settlement Financing | |||||||||
Corporation of New York, | |||||||||
Asset-Backed Revenue Bonds | |||||||||
(State Contingency Contract | |||||||||
Secured) (Putters Program) | |||||||||
(LOC; JPMorgan Chase Bank) | 1.28 | 12/7/08 | 4,995,000 | a,b | 4,995,000 | ||||
Tompkins County Industrial | |||||||||
Development Agency, Continuing | |||||||||
Care Retirement Community | |||||||||
Revenue (Kendal at Ithaca, Inc. | |||||||||
Project) (LOC; Wachovia Bank) | 1.22 | 12/7/08 | 4,960,000 | a | 4,960,000 | ||||
Westchester County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue (Mercy | |||||||||
College Project) (LOC; Key Bank) | 2.50 | 12/7/08 | 1,500,000 | a | 1,500,000 | ||||
Westchester County Industrial | |||||||||
Development Agency, Civic | |||||||||
Facility Revenue, Refunding | |||||||||
(Rye Country Day School | |||||||||
Project) (LOC; Allied Irish Banks) | 1.22 | 12/7/08 | 4,800,000 | a | 4,800,000 |
14
Short-Term | Coupon | Maturity | Principal | |||||
Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | ||||
Westchester County Industrial | ||||||||
Development Agency, Civic | ||||||||
Facility Revenue (Westchester | ||||||||
Arts Council, Inc. Project) | ||||||||
(LOC; Wachovia Bank) | 1.32 | 12/7/08 | 3,015,000 a | 3,015,000 | ||||
White Plains, | ||||||||
Public Improvement GO Notes | ||||||||
(Insured; FSA) | 3.38 | 1/15/09 | 245,000 | 245,184 | ||||
Total Investments (cost $293,737,570) | 98.3% | 293,737,570 | ||||||
Cash and Receivables (Net) | 1.7% | 5,134,457 | ||||||
Net Assets | 100.0% | 298,872,027 |
a Variable rate demand note—rate shown is the interest rate in effect at November 30, 2008. Maturity date represents |
the next demand date, or the ultimate maturity date if earlier. |
b Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in |
transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2008, these |
securities amounted to $31,010,000 or 10.4% of net assets. |
The Fund 15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Summary of Abbreviations | ||||||
ABAG | Association of Bay Area Governments | ACA | American Capital Access | |||
AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company | |||
AMBAC | American Municipal Bond | |||||
Assurance Corporation | ARRN | Adjustable Rate Receipt Notes | ||||
BAN | Bond Anticipation Notes | BIGI | Bond Investors Guaranty Insurance | |||
BPA | Bond Purchase Agreement | CGIC | Capital Guaranty Insurance Company | |||
CIC | Continental Insurance Company | CIFG | CDC Ixis Financial Guaranty | |||
CMAC | Capital Market Assurance Corporation | COP | Certificate of Participation | |||
CP | Commercial Paper | EDR | Economic Development Revenue | |||
EIR | Environmental Improvement Revenue | FGIC | Financial Guaranty Insurance | |||
Company | ||||||
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank | |||
FHLMC | Federal Home Loan Mortgage | FNMA | Federal National | |||
Corporation | Mortgage Association | |||||
FSA | Financial Security Assurance | 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 | LOC | Letter of Credit | |||
LOR | Limited Obligation Revenue | LR | Lease Revenue | |||
MFHR | Multi-Family Housing Revenue | MFMR | Multi-Family Mortgage Revenue | |||
PCR | Pollution Control Revenue | PILOT | Payment in Lieu of Taxes | |||
RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes | |||
RAW | Revenue Anticipation Warrants | RRR | Resources Recovery Revenue | |||
SAAN | State Aid Anticipation Notes | SBPA | Standby Bond Purchase Agreement | |||
SFHR | Single Family Housing Revenue | SFMR | Single Family Mortgage Revenue | |||
SONYMA | State of New York Mortgage Agency | SWDR | Solid Waste Disposal Revenue | |||
TAN | Tax Anticipation Notes | TAW | Tax Anticipation Warrants | |||
TRAN | Tax and Revenue Anticipation Notes | XLCA | XL Capital Assurance |
16
Summary of Combined Ratings (Unaudited) | ||||||||||
Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† | |||||
F1+,F1 | VMIG1,MIG1,P1 | SP1+,SP1,A1+,A1 | 81.1 | |||||||
AAA,AA,Ac | Aaa,Aa,Ac | AAA,AA,Ac | .8 | |||||||
Not Ratedd | Not Ratedd | Not Ratedd | 18.1 | |||||||
100.0 |
† | Based on total investments. | |
c | Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers. | |
d | Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to | |
be of comparable quality to those rated securities in which the fund may invest. | ||
See notes to financial statements. |
The Fund 17
STATEMENT OF ASSETS AND LIABILITIES November 30, 2008 (Unaudited) |
Cost | Value | |||
Assets ($): | ||||
Investments in securities—See Statement of Investments | 293,737,570 | 293,737,570 | ||
Cash | 5,554,520 | |||
Interest receivable | 1,030,479 | |||
Prepaid expenses | 18,157 | |||
300,340,726 | ||||
Liabilities ($): | ||||
Due to The Dreyfus Corporation and affiliates—Note 2(b) | 135,458 | |||
Payable for shares of Beneficial Interest redeemed | 1,319,488 | |||
Accrued expenses | 13,753 | |||
1,468,699 | ||||
Net Assets ($) | 298,872,027 | |||
Composition of Net Assets ($): | ||||
Paid-in capital | 298,856,762 | |||
Accumulated net realized gain (loss) on investments | 15,265 | |||
Net Assets ($) | 298,872,027 | |||
Shares Outstanding | ||||
(unlimited number of $.001 par value shares of Beneficial Interest authorized) | 298,889,873 | |||
Net Asset Value, offering and redemption price per share ($) | 1.00 | |||
See notes to financial statements. |
18
STATEMENT OF OPERATIONS |
Six Months Ended November 30, 2008 (Unaudited) |
Investment Income ($): | ||
Interest Income | 3,536,917 | |
Expenses: | ||
Management fee—Note 2(a) | 738,036 | |
Shareholder servicing costs—Note 2(b) | 126,439 | |
Professional fees | 34,783 | |
Treasury insurance expense—Note 1(e) | 24,440 | |
Custodian fees—Note 2(b) | 21,791 | |
Trustees’ fees and expenses—Note 2(c) | 11,471 | |
Registration fees | 6,887 | |
Prospectus and shareholders’ reports | 6,091 | |
Miscellaneous | 13,966 | |
Total Expenses | 983,904 | |
Less—reduction in fees due to earnings credits—Note 1(b) | (14,773) | |
Net Expenses | 969,131 | |
Investment Income—Net, representing net increase | ||
in net assets resulting from operations | 2,567,786 | |
See notes to financial statements. |
The Fund 19
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended | ||||
November 30, 2008 | Year Ended | |||
(Unaudited) | May 31, 2008 | |||
Operations ($): | ||||
Investment income—net | 2,567,786 | 6,251,584 | ||
Net realized gain (loss) on investments | — | 15,265 | ||
Net Increase (Decrease) in Net Assets | ||||
Resulting from Operations | 2,567,786 | 6,266,849 | ||
Dividends to Shareholders from ($): | ||||
Investment income—net | (2,567,786) | (6,251,584) | ||
Beneficial Interest Transactions ($1.00 per share): | ||||
Net proceeds from shares sold | 644,402,511 | 343,440,512 | ||
Dividends reinvested | 2,419,664 | 5,998,442 | ||
Cost of shares redeemed | (620,276,738) | (308,322,502) | ||
Increase (Decrease) in Net Assets from | ||||
Beneficial Interest Transactions | 26,545,437 | 41,116,452 | ||
Total Increase (Decrease) in Net Assets | 26,545,437 | 41,131,717 | ||
Net Assets ($): | ||||
Beginning of Period | 272,326,590 | 231,194,873 | ||
End of Period | 298,872,027 | 272,326,590 | ||
See notes to financial statements. |
20
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, 2008 | Year Ended May 31, | |||||||||||
(Unaudited) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||
Per Share Data ($): | ||||||||||||
Net asset value, | ||||||||||||
beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | ||||||
Investment Operations: | ||||||||||||
Investment income—net | .009 | .026 | .030 | .022 | .010 | .004 | ||||||
Distributions: | ||||||||||||
Dividends from | ||||||||||||
investment income—net | (.009) | (.026) | (.030) | (.022) | (.010) | (.004) | ||||||
Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | ||||||
Total Return (%) | 1.78a | 2.62 | 3.03 | 2.26 | 1.05 | .39 | ||||||
Ratios/Supplemental Data (%): | ||||||||||||
Ratio of total expenses | ||||||||||||
to average net assets | .67a | .65 | .68 | .66 | .67 | .66 | ||||||
Ratio of net expenses | ||||||||||||
to average net assets | .66a | .65b | .68 | .65 | .66 | .66 | ||||||
Ratio of net investment income | ||||||||||||
to average net assets | 1.74a | 2.57 | 2.99 | 2.24 | 1.03 | .39 | ||||||
Net Assets, end of period | ||||||||||||
($ x 1,000) | 298,872 | 272,327 | 231,195 | 286,778 | 260,778 | 276,244 |
a | Annualized. | |
b | Expense waivers and/or reimbursements amounted to less than .01%. | |
See notes to financial statements. |
The Fund 21
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 provide investors with as high a level of current income exempt from federal, NewYork state and NewYork city personal 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.
Effective July 1, 2008, BNY Mellon has reorganized and consolidated a number of its banking and trust company subsidiaries. As a result of the reorganization, any services previously provided to the fund by Mellon Bank, N.A. or Mellon Trust of New England, N.A. are now provided by The Bank of New York, which has changed its name to The Bank of New York Mellon.
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 fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, 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.
22
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the Board of Trustees to represent the fair value of the fund’s investments.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements.
Various inputs are used in determining the value of the fund’s investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical securities. |
Level 2—other significant observable inputs (including quoted |
prices for similar securities, interest rates, prepayment speeds, credit |
risk, etc.) |
Level 3—significant unobservable inputs (including the fund’s own |
assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The following is a summary of the inputs used as of November 30, 2008 in valuing the fund’s investments carried at fair value:
Investments in | ||
Valuation Inputs | Securities ($) | |
Level 1—Quoted Prices | 0 | |
Level 2—Other Significant Observable Inputs | 293,737,570 | |
Level 3—Significant Unobservable Inputs | 0 | |
Total | 293,737,570 |
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(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.
In March 2008, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agree-ments.The application of FAS 161 is required for fiscal years and interim periods beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements and the accompanying notes has not yet been determined.
The fund has arrangements with the custodian and cash management banks whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
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 more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the
24
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.
The fund adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Liability for tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year.The adoption of FIN 48 had no impact on the operations of the fund for the period ended November 30, 2008.
As of and during the period ended November 30, 2008, the fund did not have any liabilities for any unrecognized tax positions. The fund recognizes interest and penalties, if any, related to unrecognized 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, 2008 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, 2008 were all tax exempt income. The tax character of current year distributions will be determined at the end of the current fiscal year.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At November 30, 2008, the cost of investments for federal income tax purposes was substantially the same as for financial reporting purposes (see the Statement of Investment).
(e) Treasury’s Temporary Guarantee Program: The fund has entered into a Guarantee Agreement with the United States Department of the Treasury (the “Treasury”) to participate in the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”).
Under the Program, the Treasury guarantees the share price of shares of the fund held by shareholders as of September 19, 2008 at $1.00 per share if the fund’s net asset value per share falls below $0.995 (a “Guarantee Event”) and the fund liquidates. Recovery under the Program is subject to certain conditions and limitations.
Fund shares acquired by investors after September 19, 2008 that increase the number of fund shares the investor held at the close of business on September 19, 2008 are not eligible for protection under the Program. In addition, fund shares acquired by investors who did not hold fund shares at the close of business on September 19, 2008 are not eligible for protection under the Program.
The Program, which was originally set to expire on December 18, 2008, has been extended by the Treasury until April 30, 2009, after which the Secretary of theTreasury will review the need for, and terms of, the Program. Participation in the initial term and the extended period of the Program required a payment to the Treasury in the amount of .01% and .015%, respectively, of the fund’s shares outstanding as of September 19, 2008 (valued at $1.00 per share).This expense is being borne by the fund without regard to any expense limitation currently in effect.
NOTE 2—Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (“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
26
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 payments to be made to the Manager or the Manager will bear, such excess expense. During the period ended November 30, 2008, there was no expense reimbursement pursuant to the Agreement.
The Manager has undertaken to reimburse expenses in the event that current yields drop below a certain level.This undertaking is voluntary and not contractual and may be terminated at any time. During the period ended November 30, 2008, there was no expense reimbursement pursuant to the undertaking.
(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, 2008, the fund was charged $83,151 pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended November 30, 2008, the fund was charged $28,843 pursuant to the transfer agency agreement.
The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related
The Fund 27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
to fund subscriptions and redemptions. During the period ended November 30, 2008, the fund was charged $2,397 pursuant to the cash management agreement.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended November 30, 2008, the fund was charged $21,791 pursuant to the custody agreement.
During the period ended November 30, 2008, the fund was charged $2,959 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $120,899, custodian fees $2,693, chief compliance officer fees $2,466 and transfer agency per account fees $9,400.
(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.
28
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) |
At a meeting of the fund’s Board of Trustees held on November 10-11, 2008, the Board considered the re-approval for an annual period of the fund’s Management Agreement,pursuant to which the Manager provides the fund with investment advisory and administrative services.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 representatives of the Manager.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund.The Board members considered information previously provided to them in a presentation from representatives of the Manager regarding services provided to the fund and other funds in the Dreyfus complex, and representatives of the Manager confirmed that there had been no material changes in the information. The Board also discussed the nature, extent, and quality of the services provided to the fund pursuant to the fund’s Management Agreement. The Manager’s representatives reviewed the fund’s distribution of accounts and the relationshi ps the Manager has with various intermediaries and the different needs of each.The Manager’s representatives noted the diversity of distribution of the fund as well as among the funds in the Dreyfus fund complex, and the Manager’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each of the fund’s distribution channels.The Board also reviewed the number of shareholder accounts in the fund, as well as the fund’s asset size.
The Board members also considered the Manager’s research and portfolio management capabilities and that the Manager also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board members also considered the Manager’s extensive administrative, accounting, and compliance infrastructure.
The Fund 29
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) |
Comparative Analysis of the Fund’s Management Fee and Expense Ratio and Performance. The Board members reviewed reports prepared by Lipper, Inc., an independent provider of investment company data, which included information comparing the fund’s management fee and expense ratio with a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”) that were selected by Lipper. Included in these reports were comparisons of contractual and actual management fee rates and total operating expenses.
The Board members also reviewed the reports prepared by Lipper that presented the fund’s performance as well as comparisons of total return performance among the same group of funds as the Expense Group (the “Performance Group”) and to a group of funds that was broader than the Expense Universe (the “Performance Universe”) that also was selected by Lipper, all for various periods ended August 31, 2008.The Manager previously had furnished the Board with a description of the methodology Lipper used to select the fund’s Expense Group and Expense Universe, and Performance Group and Performance Universe.
The Board reviewed the results of the Expense Group and Expense Universe comparisons that were prepared based on financial statements currently available to Lipper as of August 31, 2008.The Board reviewed the range of management fees and expense ratios of the funds in the Expense Group and Expense Universe, and noted that the fund’s contractual management fee approximated the Expense Group median and the fund’s actual management fee was higher than the Expense Group and Expense Universe medians. The Board also noted that the fund’s total expense ratio was less than one basis point higher than the Expense Group median and higher than the Expense Universe median.
With respect to the fund’s performance, the Board noted that the fund achieved first or second quartile (the first quartile being the highest performance ranking group) total return rankings in the Performance Group, and returns variously at, higher, and lower than the Performance Universe median, for each reported time period up to 10 years.
30
Representatives of the Manager reviewed with the Board members the fees paid to the Manager or its affiliates by mutual funds managed by the Manager or its affiliates that were reported in the same Lipper category as the fund (the “Similar Funds”), and explained the nature of the Similar Funds and any differences, from the Manager’s perspective, in providing services to the Similar Funds as compared to the fund.The Manager’s representatives also reviewed the costs associated with distribution through intermediaries. The Board analyzed differences in fees paid to the Manager and discussed the relationship of the management fees paid in light of the services provided. The Board members considered the relevance of the fee information provided for the Similar Funds to evaluate the appropriateness and reasonableness of the fund’s management fee. Representatives of the Manager noted that there were no similarly managed ins titutional separate accounts or wrap fee accounts managed by the Manager or its affiliates with similar investment objectives, policies, and strategies as the fund.
Analysis of Profitability and Economies of Scale. The Manager’s representatives reviewed the dollar amount of expenses allocated and profit received by the Manager and the method used to determine such expenses and profit. The Board considered information, previously provided and discussed, prepared by an independent consulting firm regarding the Manager’s approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus mutual fund complex. The Board members also considered that the methodology had also been reviewed by an independent registered public accounting firm which, like the consultant, found the methodology to be reasonable. The consulting firm also analyzed where any economies of scale might emerge in connection with the management of the fund.The Board members evaluated the profitability analysis in light of the relevant circumstances for the fund, including the change in the fund’s asset size from the prior year, and the extent to which economies of scale would be realized if the fund
The Fund 31
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) |
grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. The Board members also considered potential benefits to the Manager from acting as investment adviser to the fund and noted that there were no soft dollar arrangements in effect with respect to trading the fund’s portfolio.
It was noted that the Board members should consider the Manager’s profitability with respect to the fund as part of their evaluation of whether the fees under the Management Agreement bear a reasonable relationship to the mix of services provided by the Manager, including the nature, extent, and quality of such services and that a discussion of economies of scale is predicated on increasing assets and that, if a fund’s assets had been decreasing, the possibility that the Manager may have realized any economies of scale would be less. It was noted that the profitability percentage for managing the fund was within the range determined by appropriate court cases to be reasonable given the services rendered and that the profitability percentage for managing the fund was reasonable given the generally superior service levels provided.
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 continuation of the fund’s Management Agreement. Based on the discussions and considerations as described above, the Board reached the following conclusions and determinations.
- The Board concluded that the nature, extent, and quality of the ser- vices provided by the Manager are adequate and appropriate.
- The Board was satisfied with the fund’s overall performance.
- The Board concluded that the fee paid to the Manager by the fund was reasonable in light of the services provided, comparative perfor- mance and expense and management fee information, costs of the services provided, and profits to be realized and benefits derived or to be derived by the Manager from its relationship with the fund.
32
- The Board determined that the economies of scale which may accrue to the Manager and its affiliates in connection with the man- agement of the fund had been adequately considered by the Manager in connection with the management fee rate charged to the fund, and that, to the extent in the future it were to be deter- mined 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.
The Board members considered these conclusions and determinations, along with the information received on a routine and regular basis throughout the year, and, without any one factor being dispositive, the Board determined that re-approval of the fund’s Management Agreement was in the best interests of the fund and its shareholders.
The Fund 33
For More Information
Item 2. | Code of Ethics. | |
Not applicable. | ||
Item 3. | Audit Committee Financial Expert. | |
Not applicable. | ||
Item 4. | Principal Accountant Fees and Services. | |
Not applicable. | ||
Item 5. | Audit Committee of Listed Registrants. | |
Not applicable. | ||
Item 6. | Schedule of Investments. | |
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. |
The Registrant has a Nominating Committee (the "Committee"), which is responsible for selecting and nominating persons for election or appointment by the Registrant's Board as Board members. The Committee has adopted a Nominating Committee Charter (the "Charter"). Pursuant to the Charter, the Committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Registrant, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8th Floor East, New York, New York 10166. A nomination submission must include information regarding the recommended nominee as specified in the Charter. This information includes all information relating to a recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Board members, as well as information sufficient to evaluate the factors to be considered by the Committee, including character and integrity, business and professional experience, and whether the person has the ability to apply sound and independent business judgment and would act in the interests of the Registrant and its shareholders. Nomination submissions are required to be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders, and such additional information must be provided regarding the recommended nominee as reasonably requested by the Committee.
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) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
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 MONEY MARKET
By: | /s/ J. David Officer | |
J. David Officer | ||
President | ||
Date: | January 26, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ J. David Officer | |
J. David Officer | ||
President | ||
Date: | January 26, 2009 | |
By: | /s/ James Windels | |
James Windels | ||
Treasurer | ||
Date: | January 26, 2009 |
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
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)