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- 22169 | |||||
|
|
| |||||
|
|
Dreyfus Institutional Reserves Funds |
| ||||
|
|
(Exact name of Registrant as specified in charter) |
| ||||
|
|
|
| ||||
|
|
c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
| ||||
|
|
(Address of principal executive offices) (Zip code) |
| ||||
|
|
|
| ||||
|
|
John Pak, 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:
|
12/31 |
| ||||
|
Date of reporting period: |
6/30/14 |
| ||||
| Dreyfus |
| Institutional Reserves |
| Funds |
SEMIANNUAL REPORT June 30, 2014
| Contents | |
| The Funds | |
| A Letter from the President | 3 |
| Discussion of Fund Performance | 4 |
| Understanding Your Fund’s Expenses | 6 |
| Comparing Your Fund’s Expenses | |
| With Those of Other Funds | 7 |
| Statements of Investments | 8 |
| Statements of Assets and Liabilities | 14 |
| Statements of Operations | 15 |
| Statements of Changes in Net Assets | 16 |
| Financial Highlights | 18 |
| Notes to Financial Statements | 21 |
| Information About the Renewal of | |
| the Funds’ Management Agreement | 25 |
| For More Information | |
| Back cover | |
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.
Dreyfus Institutional Reserves Funds
The Funds
A LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Institutional Reserves Funds, covering the six-month period from January 1, 2014, through June 30, 2014. 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.
Longer maturity bonds defied many analysts’ expectations over the first half of 2014 when long-term interest rates moderated and prices of U.S. government securities climbed amid a weather-related economic contraction during the first quarter of the year. Nonetheless, yields of money market instruments remained stable, anchored near historical lows by an unchanged federal funds rate, and the Federal Reserve Board has reiterated that short-term interest rates could remain at prevailing levels at least through the beginning of 2015.
We believe we already have seen signs that the economy’s winter contraction will likely prove temporary, including stronger labor markets, greater manufacturing activity, rebounding housing starts, and rising household wealth. While these developments portend well for some financial assets over the remainder of the year, the likelihood of rising long-term interest rates suggests that selectivity and a long-term perspective could become more important determinants of potential investment success. As always, we encourage you to talk with your financial advisor about our observations and their implications for your investments.
Thank you for your continued confidence and support.
Sincerely,
J. Charles Cardona
President
The Dreyfus Corporation
July 15, 2014
The Funds 3
DISCUSSION OF FUND PERFORMANCE (continued)
DISCUSSION OF
FUND PERFORMANCE
For the period of January 1, 2014, through June 30, 2014, as provided by Patricia A. Larkin, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended June 30, 2014, the three Dreyfus Institutional Reserves Funds listed below produced the following annualized yields and annualized effective yields:1
| Annualized | ||
| Annualized | Effective | |
| Yield (%) | Yield (%) | |
| Dreyfus Institutional | ||
| Reserves Money Fund | ||
| Institutional Shares | 0.02 | 0.02 |
| Hamilton Shares | 0.00 | 0.00 |
| Premier Shares | 0.00 | 0.00 |
| Classic Shares | 0.00 | 0.00 |
| Agency Shares | 0.00 | 0.00 |
| Dreyfus Institutional | ||
| Reserves Treasury Fund | ||
| Institutional Shares | 0.00 | 0.00 |
| Hamilton Shares | 0.00 | 0.00 |
| Premier Shares | 0.00 | 0.00 |
| Classic Shares | 0.00 | 0.00 |
| Agency Shares | 0.00 | 0.00 |
| Dreyfus Institutional Reserves | ||
| Treasury Prime Fund | ||
| Institutional Shares | 0.00 | 0.00 |
| Hamilton Shares | 0.00 | 0.00 |
| Premier Shares | 0.00 | 0.00 |
Stocks and long-term bonds encountered heightened volatility stemming from changing global economic and political conditions over the first half of 2014. Nonetheless, money market yields remained steady near historical lows, anchored by an unchanged overnight federal funds rate between 0% and 0.25%.
Mixed Economic Data Produced Greater Uncertainty
The reporting period began in the midst of an accelerating economic recovery, as evidenced by a decline in the unemployment rate to 7.0% by the end of 2013. The Federal Reserve Board (the “Fed”) had responded in December to improved economic data by modestly reducing its monthly bond purchases for the first time since signaling its intention to do so six months earlier.These developments helped drive yields of 10-year U.S. Treasury securities above 3% for the first time in two years.
Market sentiment suffered a setback in January 2014, when investors worried that economic and political instability in the emerging markets could derail the U.S. recovery. As a result, long-term bond yields began to moderate. However, corporate earnings growth remained strong, the U.S. unemployment rate declined to 6.6% with the addition of 144,000 new jobs, and the Fed announced its second reduction in quantitative easing. The U.S. economy showed additional signs of strength in February, when the manufacturing and service sectors posted gains and 222,000 new jobs were created. The unemployment rate ticked upward to 6.7%.
Job creation remained robust in March with the addition of 203,000 positions, but the unemployment rate was unchanged. Manufacturing activity expanded modestly despite a decline in new orders, and the service sector marked its 50th consecutive month of growth. New data also showed an increase in real disposable personal incomes. On the other hand, the housing market recovery appeared to level off, and the U.S. Department
4
of Commerce announced that U.S. GDP contracted at a surprising 2.9% annualized rate over the first quarter. Economists attributed the contraction to reduced export activity, slowing inventory accumulation by businesses, and the dampening effects of severe winter weather on corporate spending and housing market activity.
Housing starts surged and home sales increased in April, lending credence to expectations of reaccelerating economic growth in the spring.There were 304,000 new jobs created across a broad range of industries during the month.The unemployment rate fell sharply to 6.3%, but some of the decline in unemployment was attributed to discouraged job-seekers leaving the workforce. The Fed announced another gradual cutback in quantitative easing in April. In May, nonfarm payroll employment rose by 224,000, and the unemployment rate was unchanged at 6.3%. Meanwhile, manufacturing activity accelerated for the fourth consecutive month and personal incomes posted a healthy gain. These developments provided ample evidence that warmer weather had sparked a resumption of the economic recovery.
The U.S. economy continued to show signs of renewed strength in June, when 288,000 jobs were created and the unemployment rate dipped to 6.1%. In addition, data released during the month indicated that manufacturing activity, personal incomes, and home sales continued to grow. Perhaps most notably, inflation began to accelerate as the Consumer Price Index climbed 2.1% compared to one year earlier.
Short-Term Rates Likely to Stay Low
Despite turbulence among intermediate- and long-term interest rates over the reporting period, money market yields remained steady near 0%. In addition, yield differences along the market’s maturity spectrum stayed relatively narrow.
Monetary policymakers backed away from previous unemployment and inflation targets in reiterating that they are unlikely to raise short-term interest rates this year. Moreover, we continue to expect regulators to issue changes to the rules governing some money market funds over the coming weeks.Therefore, as we have for some time, we have maintained the fund’s weighted average maturity in a market-neutral position, and we have remained focused on well-established issuers with good liquidity characteristics.
July 15, 2014
An investment in the fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
Short-term corporate and asset-backed securities holdings, while rated in the highest rating category by one or more NRSRO (or unrated, if deemed of comparable quality by Dreyfus), involve credit and liquidity risks and risk of principal loss.
| 1 | Annualized effective yield is based upon dividends declared daily and |
| reinvested monthly. Past performance is no guarantee of future results.Yields | |
| fluctuate.Yields provided for the fund reflect the absorption of certain fund | |
| expenses by The Dreyfus Corporation pursuant to an undertaking in effect | |
| that may be extended, terminated, or modified at any time. Had these | |
| expenses not been absorbed, fund yields would have been lower, and in some | |
| cases, 7-day yields during the reporting period would have been negative | |
| absent the expense absorption. |
The Funds 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 redemptions 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 each class of each fund from January 1, 2014 to June 30, 2014. 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 June 30, 2014 | |||||
| Institutional | Hamilton | Agency | Premier | Classic | |
| Shares | Shares | Shares | Shares | Shares | |
| Dreyfus Institutional Reserves | |||||
| Money Fund | |||||
| Expenses paid per $1,000† | $.69 | $.79 | $.79 | $ .79 | $.79 |
| Ending value (after expenses) | $1,000.10 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Annualized expense ratio (%) | .14 | .16 | .16 | .16 | .16 |
| Dreyfus Institutional Reserves | |||||
| Treasury Fund | |||||
| Expenses paid per $1,000† | $.25 | $.25 | $.25 | $25 | $.25 |
| Ending value (after expenses) | $ 1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
| Annualized expense ratio (%) | .05 | .05 | .05 | .05 | .05 |
| Dreyfus Institutional Reserves | |||||
| Treasury Prime Fund | |||||
| Expenses paid per $1,000† | $.20 | $.15 | — | $.20 | — |
| Ending value (after expenses) | $1,000.00 | $1,000.00 | — | $1,000.00 | — |
| Annualized expense ratio (%) | .04 | .03 | — | .04 | — |
† Expenses are equal to each fund’s annualized expense ratios as shown above, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
6
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 June 30, 2014 | |||||||||||
| Institutional | Hamilton | Agency | Premier | Classic | |||||||
| Shares | Shares | Shares | Shares | Shares | |||||||
| Dreyfus Institutional Reserves | |||||||||||
| Money Fund | |||||||||||
| Expenses paid per $1,000† | $ .70 | $.80 | $.80 | $.80 | $.80 | ||||||
| Ending value (after expenses) | $1,024.10 | $1,024.00 | $1,024.00 | $1,024.00 | $1,024.00 | ||||||
| Annualized expense ratio (%) | .14 | .16 | .16 | .16 | .16 | ||||||
| Dreyfus Institutional Reserves | |||||||||||
| Treasury Fund | |||||||||||
| Expenses paid per $1,000† | $.25 | $.25 | $.25 | $.25 | $.25 | ||||||
| Ending value (after expenses) | $1,024.55 | $1,024.55 | $1,024.55 | $1,024.55 | $1,024.55 | ||||||
| Annualized expense ratio (%) | .05 | .05 | .05 | .05 | .05 | ||||||
| Dreyfus Institutional Reserves | |||||||||||
| Treasury Prime Fund | |||||||||||
| Expenses paid per $1,000† | $.20 | $.15 | — | $.20 | — | ||||||
| Ending value (after expenses) | $1,024.60 | $1,024.65 | — | $1,024.60 | — | ||||||
| Annualized expense ratio (%) | .04 | .03 | — | .04 | — | ||||||
† Expenses are equal to each fund’s annualized expense ratios as shown above, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half
year period).
The Funds 7
STATEMENT OF INVESTMENTS
June 30, 2014 (Unaudited)
| Principal | |||
| Dreyfus Institutional Reserves Money Fund | Amount ($) | Value ($) | |
| Negotiable Bank Certificates of Deposit—33.9% | |||
| Bank of Tokyo-Mitsubishi Ltd. (Yankee) | |||
| 0.24%, 12/11/14 | 75,000,000 | 75,000,000 | |
| Landesbank Hessen-Thuringen Girozentrale (Yankee) | |||
| 0.18%, 8/8/14 | 100,000,000 | a | 100,000,000 |
| Mitsubishi UFJ Trust and Banking Corp. (Yankee) | |||
| 0.25%, 9/8/14 | 50,000,000 | a | 50,000,000 |
| Mizuho Bank Ltd/NY (Yankee) | |||
| 0.20%, 8/1/14 | 100,000,000 | 100,000,000 | |
| Norinchukin Bank (Yankee) | |||
| 0.20%, 8/12/14 | 100,000,000 | 100,000,000 | |
| Rabobank Nederland (Yankee) | |||
| 0.22%, 11/3/14 | 40,000,000 | 40,000,000 | |
| Royal Bank of Canada (Yankee) | |||
| 0.27%, 7/1/14 | 50,000,000 | b | 50,000,000 |
| Standard Chartered Bank (Yankee) | |||
| 0.20%, 8/27/14 | 50,000,000 | a | 50,000,000 |
| Sumitomo Mitsui Banking Corp. (Yankee) | |||
| 0.25%, 7/23/14—12/3/14 | 125,000,000 | a | 125,000,000 |
| Sumitomo Mitsui Trust Bank (Yankee) | |||
| 0.20%, 9/16/14 | 100,000,000 | 100,000,000 | |
| Svenska Handelsbanken Inc (Yankee) | |||
| 0.20%, 7/21/14 | 50,000,000 | a | 50,000,139 |
| Toronto Dominion Bank NY (Yankee) | |||
| 0.21%—0.22%, 7/7/14—7/23/14 | 100,000,000 | b | 100,000,000 |
| Wells Fargo Bank, NA | |||
| 0.27%, 7/1/14 | 80,000,000 | b | 80,000,000 |
| Total Negotiable Bank Certificates of Deposit | |||
| (cost $1,020,000,139) | 1,020,000,139 | ||
| Commercial Paper—21.6% | |||
| Australia and New Zealand Banking Group Ltd. | |||
| 0.17%, 7/7/14 | 50,000,000 | a,b | 50,000,000 |
| Bank of Nova Scotia | |||
| 0.18%, 7/11/14 | 50,000,000 | 49,997,569 | |
| BNP Paribas Finance Inc. | |||
| 0.20%, 7/7/14 | 70,000,000 | 69,997,667 | |
| National Australia Funding (DE) Inc. | |||
| 0.23%, 8/14/14 | 100,000,000 | a,b | 100,000,000 |
| Nordea Bank AB | |||
| 0.20%, 7/22/14 | 80,000,000 | a | 79,990,900 |
| NRW Bank | |||
| 0.12%, 7/25/14 | 50,000,000 | a | 49,996,000 |
8
| Principal | ||||
| Dreyfus Institutional Reserves Money Fund (continued) | Amount ($) | Value ($) | ||
| Commercial Paper (continued) | ||||
| Prudential Funding LLC | ||||
| 0.06%, 7/1/14 | 80,000,000 | 80,000,000 | ||
| Svenska Handelsbanken Inc. | ||||
| 0.20%, 10/29/14 | 70,000,000 | a | 69,953,333 | |
| Westpac Banking Corp. | ||||
| 0.31%, 7/1/14 | 100,000,000 | a,b | 100,000,000 | |
| Total Commercial Paper | ||||
| (cost $649,935,469) | 649,935,469 | |||
| Asset-Backed Commercial Paper—5.8% | ||||
| CHARTA | ||||
| 0.15%, 8/7/14 | 50,000,000 | a | 49,992,292 | |
| Collateralized Commercial Paper II Co., LLC | ||||
| 0.29%, 12/29/14 | 25,000,000 | a | 24,963,549 | |
| Collateralized Commercial Paper Program Co., LLC | ||||
| 0.30%, 11/24/14 | 100,000,000 | 99,878,333 | ||
| Total Asset-Backed Commercial Paper | ||||
| (cost $174,834,174) | 174,834,174 | |||
| Time Deposits—5.6% | ||||
| Credit Agricole (Grand Cayman) | ||||
| 0.07%, 7/1/14 | 100,000,000 | 100,000,000 | ||
| Natixis New York (Grand Cayman) | ||||
| 0.05%, 7/1/14 | 69,000,000 | 69,000,000 | ||
| Total Time Deposits | ||||
| (cost $169,000,000) | 169,000,000 | |||
| U.S. Government Agency—1.5% | ||||
| Federal Home Loan Bank | ||||
| 0.00%, 7/1/14 | ||||
| (cost $46,000,000) | 46,000,000 | 46,000,000 | ||
| Repurchase Agreements—31.6% | ||||
| ABN AMRO Bank N.V. | ||||
| 0.08%, dated 6/30/14, due 7/1/14 in the amount of $210,000,467 | ||||
| (fully collateralized by $772,009 U.S. Treasury Bills, due 8/21/14, | ||||
| value $771,985, $12,179,516 U.S. Treasury Bonds, 2.75%-8.50%, | ||||
| due 2/15/20-11/15/42, value $16,057,990, $444,226 U.S. Treasury | ||||
| Inflation Protected Securities, 0.38%, due 7/15/23, value $461,560 | ||||
| and $195,231,438 U.S. Treasury Notes, 0.25%-2.63%, | ||||
| due 12/31/14-8/15/21, value $196,908,476) | 210,000,000 | 210,000,000 | ||
The Funds 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Principal | |||
| Dreyfus Institutional Reserves Money Fund (continued) | Amount ($) | Value ($) | |
| Repurchase Agreements (continued) | |||
| Credit Agricole CIB | |||
| 0.07%, dated 6/30/14, due 7/1/14 in the amount of $100,000,194 | |||
| (fully collateralized by $5,244,755 U.S. Treasury Bills, due 6/25/15, | |||
| value $5,238,939, $45,162,416 U.S. Treasury Inflation Protected | |||
| Securities, 0.13%-3.38%, due 1/15/15-2/15/42, value $53,938,532 | |||
| and $42,391,545 U.S. Treasury Notes, 0.75%-3.63%, | |||
| due 3/31/16-5/31/21, value $42,822,533) | 100,000,000 | 100,000,000 | |
| Federal Reserve Bank of New York, | |||
| 0.05%, dated 6/30/14, due 7/1/14 in the amount of $500,000,694 | |||
| (fully collateralized by $389,799,100 U.S. Treasury Bonds, 4.75%, | |||
| due 2/15/41, value $500,000,797) | 500,000,000 | 500,000,000 | |
| Societe Generale | |||
| 0.09%, dated 6/30/14, due 7/1/14 in the amount of $143,000,358 | |||
| (fully collateralized by $6,742,132 U.S. Treasury Bills, due 9/18/14-10/30/14, | |||
| value $6,741,633, $178,972 U.S. Treasury Bonds, 3.75%-4.38%, | |||
| due 5/15/40-8/15/41, value $206,646, $97,340,116 U.S. Treasury | |||
| Inflation Protected Securities, 0.13%-3.88%, due 7/15/14-2/15/44, | |||
| value $121,113,955 and $17,570,108 U.S. Treasury Notes, | |||
| 0.63%-2.50%, due 2/28/15-5/15/24, value $17,797,777) | 143,000,000 | 143,000,000 | |
| Total Repurchase Agreements | |||
| (cost $953,000,000) | 953,000,000 | ||
| Total Investments (cost $3,012,769,782) | 100.0 | % | 3,012,769,782 |
| Cash and Receivables (Net) | .0 | % | 67,865 |
| Net Assets | 100.0 | % | 3,012,837,647 |
a Securities exempt from registration pursuant to Rule 144A under the Securities Act of 1933.These securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers. At June 30, 2014, these securities amounted to $899,896,213 or 29.9% of net assets.
b Variable rate security—interest rate subject to periodic change.
| Portfolio Summary (Unaudited)† | |||
| Value (%) | Value (%) | ||
| Banking | 58.4 | Asset-Backed/Multi-Seller Programs | 1.7 |
| Repurchase Agreements | 31.6 | U.S. Government Agency | 1.5 |
| Asset-Backed/Banking | 4.1 | ||
| Finance | 2.7 | 100.0 | |
| † Based on net assets. | |||
| See notes to financial statements. | |||
10
STATEMENT OF INVESTMENTS
June 30, 2014 (Unaudited)
| Annualized | |||
| Yield on | |||
| Date of | Principal | ||
| Dreyfus Institutional Reserves Treasury Fund | Purchase (%) | Amount ($) | Value ($) |
| U.S. Treasury Bills—12.6% | |||
| 6/25/15 | |||
| (cost $149,831,719) | 0.11 | 150,000,000 | 149,831,719 |
| Repurchase Agreements—87.4% | |||
| ABN AMRO Bank N.V. | |||
| dated 6/30/14, due 7/1/14 in the amount of $200,000,444 | |||
| (fully collateralized by $735,246 U.S. Treasury Bills, due 8/21/14, | |||
| value $735,223, $11,599,539 U.S. Treasury Bonds, 2.75%-8.50%, | |||
| due 2/15/20-11/15/42, value $15,293,324, $423,072 U.S. Treasury | |||
| Inflation Protected Securities, 0.38%, due 7/15/23, value $439,581 | |||
| and $185,934,703 U.S. Treasury Notes, 0.25%-2.63%, | |||
| due 12/31/14-8/15/21, value $187,531,882) | 0.08 | 200,000,000 | 200,000,000 |
| Bank of Nova Scotia | |||
| dated 6/30/14, due 7/1/14 in the amount of $200,000,444 | |||
| (fully collateralized by $47,713,060 U.S. Treasury Bonds, | |||
| 3.50%-8.13%, due 2/15/21-11/15/43, value $54,046,149, | |||
| $51,993,960 U.S. Treasury Inflation Protected Securities, | |||
| 0.13%-3.63%, due 4/15/15-2/15/43, value $57,565,840 | |||
| and $89,068,020 U.S. Treasury Notes, 0.25%-4.50%, | |||
| due 7/31/15-2/15/21, value $92,388,012) | 0.08 | 200,000,000 | 200,000,000 |
| Barclays Capital, Inc. | |||
| dated 6/30/14, due 7/1/14 in the amount of $62,000,121 | |||
| (fully collateralized by $87,183,736 U.S. Treasury Strips, | |||
| due 5/15/18-8/15/40, value $63,240,000) | 0.07 | 62,000,000 | 62,000,000 |
| BNP Paribas | |||
| dated 6/30/14, due 7/1/14 in the amount of $80,000,200 | |||
| (fully collateralized by $44,218,600 U.S. Treasury Bonds, 4.75%, | |||
| due 2/15/41, value $56,719,821 and $24,876,400 U.S. Treasury Notes, | |||
| 1.25%-1.38%, due 11/30/15-10/31/19, value $24,880,247) | 0.09 | 80,000,000 | 80,000,000 |
| Citibank, NA | |||
| dated 6/30/14, due 7/1/14 in the amount of $100,000,167 | |||
| (fully collateralized by $101,004,300 U.S. Treasury Notes, 0.75%-3.75%, | |||
| due 8/31/14-1/31/20, value $102,000,050) | 0.06 | 100,000,000 | 100,000,000 |
| Credit Agricole CIB | |||
| dated 6/30/14, due 7/1/14 in the amount of $200,000,389 | |||
| (fully collateralized by $10,489,510 U.S. Treasury Bills, due 6/25/15, | |||
| value $10,477,878, $90,324,832 U.S. Treasury Inflation Protected | |||
| Securities, 0.13%-3.38%, due 1/15/15-2/15/42, value $107,877,065 | |||
| and $84,783,091 U.S. Treasury Notes, 0.75%-3.63%, | |||
| due 3/31/16-5/31/21, value $85,645,066) | 0.07 | 200,000,000 | 200,000,000 |
The Funds 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Annualized | ||||||
| Yield on | ||||||
| Date of | Principal | |||||
| Dreyfus Institutional Reserves Treasury Fund (continued) | Purchase (%) | Amount ($) | Value ($) | |||
| Repurchase Agreements (continued) | ||||||
| Deutsche Bank Securities Inc. | ||||||
| dated 6/30/14, due 7/1/14 in the amount of $100,000,139 | ||||||
| (fully collateralized by $135,875 U.S. Treasury Floating Rate Notes, | ||||||
| 0.07%, due 1/31/16, value $135,850, $11,844,900 U.S. Treasury | ||||||
| Inflation Protected Securities, 3.63%, due 4/15/28, value $24,475,276 | ||||||
| and $75,968,350 U.S. Treasury Notes, 0.63%-2.63%, | ||||||
| due 10/15/16-8/15/20, value $77,388,894) | 0.05 | 100,000,000 | 100,000,000 | |||
| Merrill Lynch & Co. Inc. | ||||||
| dated 6/30/14, due 7/1/14 in the amount of $100,000,167 | ||||||
| (fully collateralized by $147,926,136 U.S. Treasury Strips, | ||||||
| due 5/15/24-5/15/27, value $102,000,000) | 0.06 | 100,000,000 | 100,000,000 | |||
| Total Repurchase Agreements | ||||||
| (cost $1,042,000,000) | 1,042,000,000 | |||||
| Total Investments (cost $1,191,831,719) | 100.0 | % | 1,191,831,719 | |||
| Cash and Receivables (Net) | .0 | % | 390,599 | |||
| Net Assets | 100.0 | % | 1,192,222,318 | |||
| Portfolio Summary (Unaudited)† | ||||||
| Value (%) | Value (%) | |||||
| Repurchase Agreements | 87.4 | U.S. Treasury Bills | 12.6 | |||
| 100.0 | ||||||
| † Based on net assets. | ||||||
| See notes to financial statements. | ||||||
12
STATEMENT OF INVESTMENTS
June 30, 2014 (Unaudited)
| Annualized | |||||
| Yield on | |||||
| Date of | Principal | ||||
| Dreyfus Institutional Reserves Treasury Prime Fund | Purchase (%) | Amount ($) | Value ($) | ||
| U.S. Treasury Bills—77.2% | |||||
| 7/3/14 | 0.09 | 15,000,000 | 14,999,928 | ||
| 7/10/14 | 0.01 | 77,000,000 | 76,999,728 | ||
| 7/17/14 | 0.04 | 98,000,000 | 97,998,242 | ||
| 7/24/14 | 0.03 | 135,000,000 | 134,997,575 | ||
| 7/31/14 | 0.02 | 50,000,000 | 49,999,167 | ||
| 9/11/14 | 0.04 | 75,000,000 | 74,994,750 | ||
| 9/25/14 | 0.02 | 50,000,000 | 49,997,312 | ||
| 12/18/14 | 0.07 | 15,000,000 | 14,995,396 | ||
| Total U.S. Treasury Bills | |||||
| (cost $514,982,098) | 514,982,098 | ||||
| U.S. Treasury Notes—22.6% | |||||
| 8/31/14 | 0.05 | 70,000,000 | 70,273,106 | ||
| 9/30/14 | 0.05 | 80,000,000 | 80,462,175 | ||
| Total U.S. Treasury Notes | |||||
| (cost $150,735,281) | 150,735,281 | ||||
| Total Investments (cost $665,717,379) | 99.8 | % | 665,717,379 | ||
| Cash and Receivables (Net) | .2 | % | 1,156,610 | ||
| Net Assets | 100.0 | % | 666,873,989 | ||
| Portfolio Summary (Unaudited)† | |||||
| Value (%) | Value (%) | ||||
| U.S. Treasury Bills | 77.2 | U.S. Treasury Notes | 22.6 | ||
| 99.8 | |||||
| † Based on net assets. | |||||
| See notes to financial statements. | |||||
The Funds 13
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2014 (Unaudited)
| Dreyfus | Dreyfus | |||||
| Dreyfus | Institutional | Institutional | ||||
| Institutional | Reserves | Reserves | ||||
| Reserves | Treasury | Treasury Prime | ||||
| Money Fund | Fund | Fund | ||||
| Assets ($): | ||||||
| Investments in securities at value—Note 1(a,b)† | 3,012,769,782 | a | 1,191,831,719 | a | 665,717,379 | |
| Cash | — | 448,232 | 160,814 | |||
| Interest receivable | 486,427 | 2,071 | 1,030,162 | |||
| 3,013,256,209 | 1,192,282,022 | 666,908,355 | ||||
| Liabilities ($): | ||||||
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | 376,141 | 59,704 | 15,938 | |||
| Cash overdraft due to Custodian | 42,372 | — | — | |||
| Payable for shares of Beneficial Interest redeemed | 49 | — | 18,428 | |||
| 418,562 | 59,704 | 34,366 | ||||
| Net Assets ($) | 3,012,837,647 | 1,192,222,318 | 666,873,989 | |||
| Composition of Net Assets ($): | ||||||
| Paid-in capital | 3,012,943,129 | 1,192,443,709 | 666,879,555 | |||
| Accumulated net realized gain (loss) on investments | (105,482 | ) | (221,391 | ) | (5,566 | ) |
| Net Assets ($) | 3,012,837,647 | 1,192,222,318 | 666,873,989 | |||
| Net Asset Value Per Share | ||||||
| Institutional Shares | ||||||
| Net Assets ($) | 1,213,066,102 | 125,240,015 | 310,550,387 | |||
| Shares Outstanding | 1,212,373,252 | 125,192,674 | 310,556,187 | |||
| Net Asset Value Per Share ($) | 1.00 | 1.00 | 1.00 | |||
| Hamilton Shares | ||||||
| Net Assets ($) | 1,331,348,169 | 161,022,502 | 9,056,274 | |||
| Shares Outstanding | 1,330,519,982 | 160,965,745 | 9,056,328 | |||
| Net Asset Value Per Share ($) | 1.00 | 1.00 | 1.00 | |||
| Agency Shares | ||||||
| Net Assets ($) | 18,183,214 | 9,103,588 | — | |||
| Shares Outstanding | 18,177,592 | 9,102,510 | — | |||
| Net Asset Value Per Share ($) | 1.00 | 1.00 | — | |||
| Premier Shares | ||||||
| Net Assets ($) | 323,733,591 | 665,242,007 | 347,267,328 | |||
| Shares Outstanding | 323,538,438 | 665,018,514 | 347,267,040 | |||
| Net Asset Value Per Share ($) | 1.00 | 1.00 | 1.00 | |||
| Classic Shares | ||||||
| Net Assets ($) | 126,506,571 | 231,614,206 | — | |||
| Shares Outstanding | 126,435,148 | 231,521,449 | — | |||
| Net Asset Value Per Share ($) | 1.00 | 1.00 | — | |||
| † Investments at cost ($) | 3,012,769,782 | 1,191,831,719 | 665,717,379 |
a Amount includes repurchase agreements of $953,000,000 for Dreyfus Institutional Reserves Money Fund and $1,042,000,000 for Dreyfus Institutional Reserves Treasury Fund.
See Note 1(b).
See notes to financial statements.
14
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2014 (Unaudited)
| Dreyfus | Dreyfus | |||||
| Dreyfus | Institutional | Institutional | ||||
| Institutional | Reserves | Reserves | ||||
| Reserves | Treasury | Treasury Prime | ||||
| Money Fund | Fund | Fund | ||||
| Investment Income ($): | ||||||
| Interest Income | 2,463,862 | 320,260 | 136,074 | |||
| Expenses: | ||||||
| Management fee—Note 2(a) | 2,127,669 | 888,918 | 607,725 | |||
| Service Plan fees—Note 2(b) | 1,280,910 | 1,761,363 | 591,946 | |||
| Trustees’ fees—Note 2(a,c) | 26,665 | 12,594 | 7,137 | |||
| Legal fees—Note 2(a) | 15,203 | 7,117 | 3,860 | |||
| Total Expenses | 3,450,447 | 2,669,992 | 1,210,668 | |||
| Less—reduction in expenses due to undertaking—Note 2(a) | (1,070,400 | ) | (2,330,241 | ) | (1,063,732 | ) |
| Less—Trustees’ fees reimbursed by the Manager—Note 2(a) | (26,665 | ) | (12,594 | ) | (7,137 | ) |
| Less—Legal fees reimbursed by the Manager—Note 2(a) | (15,203 | ) | (7,117 | ) | (3,860 | ) |
| Net Expenses | 2,338,179 | 320,040 | 135,939 | |||
| Investment Income—Net | 125,683 | 220 | 135 | |||
| Net Realized Gain (Loss) on Investments—Note 1(b) ($) | (2,187 | ) | 105,567 | (2,002 | ) | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 123,496 | 105,787 | (1,867 | ) | ||
| See notes to financial statements. | ||||||
The Funds 15
STATEMENTS OF CHANGES IN ASSETS
| Dreyfus Institutional | ||||
| Reserves Money Fund | ||||
| Six Months Ended | Year Ended | |||
| June 30, 2014 | December 31, | |||
| (Unaudited) | 2013 | |||
| Operations ($): | ||||
| Investment income—net | 125,683 | 502,995 | ||
| Net realized gain (loss) on investments | (2,187 | ) | 18,797 | |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 123,496 | 521,792 | ||
| Dividends to Shareholders from ($): | ||||
| Investment income—net: | ||||
| Institutional Shares | (125,349 | ) | (395,814 | ) |
| Hamilton Shares | (252 | ) | (106,978 | ) |
| Agency Shares | (2 | ) | (6 | ) |
| Premier Shares | (66 | ) | (149 | ) |
| Classic Shares | (14 | ) | (48 | ) |
| Total Dividends | (125,683 | ) | (502,995 | ) |
| Beneficial Interest Transactions ($1.00 per share): | ||||
| Net proceeds from shares sold: | ||||
| Institutional Shares | 3,077,450,819 | 4,931,231,924 | ||
| Hamilton Shares | 2,640,677,744 | 5,864,208,730 | ||
| Agency Shares | 15,024,013 | 49,285,884 | ||
| Premier Shares | 431,636,744 | 1,540,052,054 | ||
| Classic Shares | 476,694,832 | 1,034,982,313 | ||
| Dividends reinvested: | ||||
| Institutional Shares | 160 | 1,233 | ||
| Hamilton Shares | — | 732 | ||
| Premier Shares | 1 | 3 | ||
| Classic Shares | 14 | 48 | ||
| Cost of shares redeemed: | ||||
| Institutional Shares | (3,048,887,901 | ) | (4,507,540,500 | ) |
| Hamilton Shares | (2,980,966,423 | ) | (5,662,297,970 | ) |
| Agency Shares | (10,700,930 | ) | (57,714,764 | ) |
| Premier Shares | (508,868,166 | ) | (1,476,861,484 | ) |
| Classic Shares | (479,499,067 | ) | (1,075,498,578 | ) |
| Increase (Decrease) in Net Assets from | ||||
| Beneficial Interest Transactions | (387,438,160 | ) | 639,849,625 | |
| Total Increase (Decrease) In Net Assets | (387,440,347 | ) | 639,868,422 | |
| Net Assets ($): | ||||
| Beginning of Period | 3,400,277,994 | 2,760,409,572 | ||
| End of Period | 3,012,837,647 | 3,400,277,994 | ||
| See notes to financial statements. | ||||
16
| Dreyfus Institutional | Dreyfus Institutional | |||||||
| Reserves Treasury Fund | Reserves Treasury Prime Fund | |||||||
| Six Months Ended | Year Ended | Six Months Ended | Year Ended | |||||
| June 30, 2014 | December 31, | June 30, 2014 | December 31, | |||||
| (Unaudited) | 2013 | (Unaudited) | 2013 | |||||
| Operations ($): | ||||||||
| Investment income—net | 220 | 698 | 135 | 260 | ||||
| Net realized gain (loss) on investments | 105,567 | 27,097 | (2,002 | ) | 1,508 | |||
| Net Increase (Decrease) in Net Assets | ||||||||
| Resulting from Operations | 105,787 | 27,795 | (1,867 | ) | 1,768 | |||
| Dividends to Shareholders from ($): | ||||||||
| Investment income—net: | ||||||||
| Institutional Shares | (24 | ) | (329 | ) | (62 | ) | (125 | ) |
| Hamilton Shares | (33 | ) | (56 | ) | —a | (3 | ) | |
| Agency Shares | —a | (1 | ) | — | — | |||
| Premier Shares | (123 | ) | (245 | ) | (73 | ) | (132 | ) |
| Classic Shares | (40 | ) | (67 | ) | — | — | ||
| Total Dividends | (220 | ) | (698 | ) | (135 | ) | (260 | ) |
| Beneficial Interest Transactions ($1.00 per share): | ||||||||
| Net proceeds from shares sold: | ||||||||
| Institutional Shares | 226,614,376 | 1,015,713,490 | 400,226,959 | 786,597,028 | ||||
| Hamilton Shares | 367,558,919 | 1,013,612,888 | 33,392,487 | 263,375,907 | ||||
| Agency Shares | 8,832,120 | 7,530,021 | — | — | ||||
| Premier Shares | 1,524,901,946 | 3,643,432,614 | 488,409,556 | 1,222,118,760 | ||||
| Classic Shares | 305,320,887 | 604,421,690 | — | — | ||||
| Dividends reinvested: | ||||||||
| Institutional Shares | 11 | 12 | 16 | 32 | ||||
| Hamilton Shares | 5 | 9 | — | — | ||||
| Premier Shares | 2 | 4 | — | — | ||||
| Classic Shares | 40 | 67 | — | — | ||||
| Cost of shares redeemed: | ||||||||
| Institutional Shares | (276,210,417 | ) | (953,510,182 | ) | (432,424,530 | ) | (717,185,743 | ) |
| Hamilton Shares | (446,915,196 | ) | (902,760,676 | ) | (31,325,813 | ) | (299,828,819 | ) |
| Agency Shares | (3,140,616 | ) | (7,585,024 | ) | — | — | ||
| Premier Shares | (1,953,657,686 | ) | (3,369,006,247 | ) | (563,218,621 | ) | (1,132,564,060 | ) |
| Classic Shares | (268,453,547 | ) | (574,662,722 | ) | — | — | ||
| Increase (Decrease) in Net Assets from | ||||||||
| Beneficial Interest Transactions | (515,149,156 | ) | 477,185,944 | (104,939,946 | ) | 122,513,105 | ||
| Total Increase (Decrease) In Net Assets | (515,043,589 | ) | 477,213,041 | (104,941,948 | ) | 122,514,613 | ||
| Net Assets ($): | ||||||||
| Beginning of Period | 1,707,265,907 | 1,230,052,866 | 771,815,937 | 649,301,324 | ||||
| End of Period | 1,192,222,318 | 1,707,265,907 | 666,873,989 | 771,815,937 | ||||
| a Amount represents less than $1. | ||||||||
| See notes to financial statements. | ||||||||
The Funds 17
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class of each Dreyfus Institutional Reserves Funds for the fiscal periodsindicated. All information reflects financial results for a single fund share.Total return shows how much your investment ineach fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the funds’ financial statements.
| Per Share Data ($) | Ratios/Supplemental Data (%) | ||||||||||||||
| Ratio of | Ratio of | Ratio of Net | |||||||||||||
| Net Asset | Dividends | Net Asset | Total | Net | Investment | Net Assets | |||||||||
| Value | Net | from Net | Value | Expenses | Expenses | Income to | End of | ||||||||
| Beginning | Investment | Investment | End | Total | to Average | to Average | Average | Period | |||||||
| of Period | Income | Income | of Period | Return (%) | Net Assets | Net Assets | Net Assets | ($ x1,000) | |||||||
| Dreyfus Institutional | |||||||||||||||
| Reserves Money Fund | |||||||||||||||
| Institutional Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .01 | b | .14 | b | .14 | b | .02 | b | 1,213,066 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .04 | .14 | .14 | .04 | 1,184,394 | ||||
| 2012 | 1.00 | .001 | (.001 | ) | 1.00 | .12 | .14 | .14 | .12 | 760,601 | |||||
| 2011 | 1.00 | .001 | (.001 | ) | 1.00 | .11 | .14 | .14 | .12 | 767,737 | |||||
| 2010 | 1.00 | .002 | (.002 | ) | 1.00 | .21 | .14 | .14 | .19 | 1,836,863 | |||||
| 2009 | 1.00 | .006 | (.006 | ) | 1.00 | .57 | .17 | .17 | .61 | 2,451,271 | |||||
| Hamilton Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .19 | b | .16 | b | .00 | b,c | 1,331,348 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .01 | .19 | .17 | .01 | 1,671,719 | ||||
| 2012 | 1.00 | .001 | (.001 | ) | 1.00 | .07 | .19 | .19 | .07 | 1,469,811 | |||||
| 2011 | 1.00 | .001 | (.001 | ) | 1.00 | .07 | .19 | .19 | .08 | 1,823,501 | |||||
| 2010 | 1.00 | .002 | (.002 | ) | 1.00 | .15 | .19 | .19 | .15 | 3,481,446 | |||||
| 2009 | 1.00 | .005 | (.005 | ) | 1.00 | .51 | .21 | .21 | .50 | 5,501,158 | |||||
| Agency Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .29 | b | .16 | b | .00 | b,c | 18,183 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .29 | .18 | .00 | c | 13,861 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .29 | .26 | .00 | c | 22,295 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .01 | .29 | .24 | .01 | 21,794 | ||||
| 2010 | 1.00 | .001 | (.001 | ) | 1.00 | .06 | .29 | .28 | .05 | 27,498 | |||||
| 2009 | 1.00 | .004 | (.004 | ) | 1.00 | .42 | .32 | .31 | .42 | 42,799 | |||||
| Premier Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .44 | b | .16 | b | .00 | b,c | 323,734 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .44 | .18 | .00 | c | 400,990 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .44 | .26 | .00 | c | 337,837 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .44 | .26 | .00 | c | 416,300 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .44 | .33 | .00 | c | 603,226 | ||
| 2009 | 1.00 | .003 | (.003 | ) | 1.00 | .31 | .47 | .44 | .36 | 828,469 | |||||
| Classic Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .69 | b | .16 | b | .00 | b,c | 126,507 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .69 | .18 | .00 | c | 129,314 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .69 | .26 | .00 | c | 169,866 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .69 | .26 | .00 | c | 177,397 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | c | .69 | .33 | .00 | c | 249,246 | ||
| 2009 | 1.00 | .002 | (.002 | ) | 1.00 | .18 | .72 | .57 | .18 | 537,810 | |||||
a Amount represents less than $.001 per share.
b Annualized.
c Amount represents less than .01%.
See notes to financial statements.
18
| Per Share Data ($) | Ratios/Supplemental Data (%) | ||||||||||||||
| Ratio of | Ratio of | Ratio of Net | |||||||||||||
| Net Asset | Dividends | Net Asset | Total | Net | Investment | Net Assets | |||||||||
| Value | Net | from Net | Value | Expenses | Expenses | Income to | End of | ||||||||
| Beginning | Investment | Investment | End | Total | to Average | to Average | Average | Period | |||||||
| of Period | Income | Income | of Period | Return (%) | Net Assets | Net Assets | Net Assets | ($ x1,000) | |||||||
| Dreyfus Institutional | |||||||||||||||
| Reserves Treasury Fund | |||||||||||||||
| Institutional Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .14 | c | .05 | c | .00 | b,c | 125,240 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .14 | .07 | .00 | b | 174,820 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .01 | .14 | .12 | .02 | 112,618 | ||||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .01 | .14 | .10 | .01 | 125,472 | ||||
| 2010 | 1.00 | .001 | (.001 | ) | 1.00 | .05 | .14 | .13 | .04 | 222,951 | |||||
| 2009 | 1.00 | .001 | (.001 | ) | 1.00 | .06 | .15 | .15 | .06 | 504,846 | |||||
| Hamilton Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .19 | c | .05 | c | .00 | b,c | 161,023 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .19 | .07 | .00 | b | 240,368 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .19 | .14 | .00 | b | 129,501 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .19 | .10 | .00 | b | 281,715 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .02 | .19 | .18 | .01 | 275,160 | ||||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .03 | .20 | .19 | .03 | 663,017 | ||||
| Agency Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .29 | c | .05 | c | .00 | b,c | 9,104 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .29 | .08 | .00 | b | 3,412 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .29 | .14 | .00 | b | 3,467 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .29 | .12 | .00 | b | 3,464 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .29 | .19 | .00 | b | 5,366 | ||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .32 | .24 | .01 | 6,925 | |||
| Premier Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .44 | c | .05 | c | .00 | b,c | 665,242 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .44 | .08 | .00 | b | 1,093,976 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .44 | .14 | .00 | b | 819,532 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .44 | .09 | .00 | b | 1,024,524 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .44 | .19 | .00 | b | 897,799 | ||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .46 | .22 | .00 | b | 1,181,422 | ||
| Classic Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .69 | c | .05 | c | .00 | b,c | 231,614 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .69 | .08 | .00 | b | 194,691 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .69 | .14 | .00 | b | 164,935 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .69 | .10 | .00 | b | 203,642 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .69 | .18 | .00 | b | 215,275 | ||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .71 | .22 | .00 | b | 337,261 | ||
a Amount represents less than $.001 per share.
b Amount represents less than .01%.
c Annualized.
See notes to financial statements.
The Funds 19
FINANCIAL HIGHLIGHTS (continued)
| Per Share Data ($) | Ratios/Supplemental Data (%) | ||||||||||||||
| Ratio of | Ratio of | Ratio of Net | |||||||||||||
| Net Asset | Dividends | Net Asset | Total | Net | Investment | Net Assets | |||||||||
| Value | Net | from Net | Value | Expenses | Expenses | Income to | End of | ||||||||
| Beginning | Investment | Investment | End | Total | to Average | to Average | Average | Period | |||||||
| of Period | Income | Income | of Period | Return (%) | Net Assets | Net Assets | Net Assets | ($ x1,000) | |||||||
| Dreyfus Institutional Reserves | |||||||||||||||
| Treasury Prime Fund | |||||||||||||||
| Institutional Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .16 | c | .04 | c | .00 | b,c | 310,550 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .16 | .05 | .00 | b | 342,749 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .16 | .07 | .00 | b | 273,337 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .16 | .07 | .00 | b | 579,982 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .16 | .13 | .00 | b | 514,407 | ||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .03 | .17 | .16 | .04 | 556,723 | ||||
| Hamilton Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .20 | c | .03 | c | .00 | b,c | 9,056 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .20 | .06 | .00 | b | 6,990 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .20 | .08 | .00 | b | 43,442 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .20 | .08 | .00 | b | 24,633 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .20 | .13 | .00 | b | 41,899 | ||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .01 | .21 | .17 | .02 | 11,462 | ||||
| Premier Shares | |||||||||||||||
| Six Months Ended June 30, 2014 (Unaudited) | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b,c | .45 | c | .04 | c | .00 | b,c | 347,267 |
| Year Ended December 31, | |||||||||||||||
| 2013 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .45 | .05 | .00 | b | 422,077 | ||
| 2012 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .45 | .08 | .00 | b | 332,522 | ||
| 2011 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .45 | .07 | .00 | b | 244,127 | ||
| 2010 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .45 | .13 | .00 | b | 255,513 | ||
| 2009 | 1.00 | .000 | a | (.000 | )a | 1.00 | .00 | b | .46 | .18 | .00 | b | 290,749 | ||
a Amount represents less than $.001 per share.
b Amount represents less than .01%.
c Annualized.
See notes to financial statements.
20
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Institutional Reserves Money Fund, Dreyfus Institutional Reserves Treasury Fund and Dreyfus Institutional Reserves Treasury Prime Fund (each, a “fund”), each a separate series of Dreyfus Institutional Reserves Funds (the “Company”), are registered under the Investment Company Act of 1940, as amended (the “Act”). Each fund is a diversified open-end management investment company. Each fund’s investment objective is to provide investors with as high a level of current income 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 funds’ investment adviser.
MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of each fund’s shares, which are sold to the public without a sales charge. Each fund offers Institutional shares, Hamilton shares and Premier shares. In addition, Dreyfus Institutional Reserves Money Fund and Dreyfus Institutional Reserves Treasury Fund also offer Agency shares and Classic shares. Each fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest. Hamilton shares, Agency shares, Premier shares and Classic shares are subject to a Service Plan adopted pursuant to Rule 12b-1 under the Act. 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.
It is each fund’s policy to maintain a continuous net asset value per share of $1.00; the funds have adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so.There is no assurance, however, that the funds will be able to maintain a stable net asset value per share of $1.00.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants.The funds’ 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 funds’ maximum exposure under these arrangements is unknown. The funds do not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. If amortized cost is determined not to approximate market value, the fair value of the portfolio securities will be determined by procedures established by and under the general supervision of the Company’s Board of Trustees (the “Board”).
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The Funds 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 each 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 funds’ 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 within Level 2 of the fair value hierarchy.
At June 30, 2014, all of the securities in each fund were considered Level 2 of the fair value hierarchy.
At June 30, 2014, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.
(b) Securities transactions and investment income:
Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and is 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.
Dreyfus Institutional Reserves Money Fund and Dreyfus Institutional Reserves Treasury Fund may enter into repur-
chase agreements with financial institutions, deemed to be creditworthy by the Manager, subject to the seller’s agreement to repurchase and the funds’ agreement to resell such securities at a mutually agreed upon price. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the funds will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the funds maintain the right to sell the underlying securities at market value and may claim any resulting loss against the seller. Each fund may also jointly enter into one or more repurchase agreements with other Dreyfus managed funds in accordance with an exemptive order granted by the SEC pursuant to section 17(d) and Rule 17d-1 under the Act.Any joint repurchase agreements must be collateralized fully by U.S. Government securities.
(c) Dividends to shareholders: It is the policy of each 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 each 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 each fund not to distribute such gains.
(d) Federal income taxes: It is the policy of each fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal tax purposes, each fund is treated as a separate entity for the purpose of determining such qualification.
As of and during the period ended June 30, 2014, the funds did not have any liabilities for any uncertain tax positions. Each fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the
22
Statements of Operations. During the period ended June 30, 2014, the funds did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2013 remains subject to examination by the Internal Revenue Service and state taxing authorities.
Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), each fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”). As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.
Table 1 summarizes each fund’s accumulated capital loss carryover available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to December 31, 2013.
The tax character of distributions paid to shareholders for each fund during the fiscal year ended December 31, 2013 was all ordinary income. The tax character of current year distributions will be determined at the end of the current fiscal year.
At June 30, 2014, the cost of investments for federal income tax purposes for each fund was substantially the same as the cost for financial reporting purposes (see the Statements of Investments).
NOTE 2—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee for Dreyfus Institutional Reserves Money Fund, Dreyfus Institutional Reserves Treasury Fund and Dreyfus Institutional Reserves Treasury Prime Fund is computed at the annual rates of .14%, .14% and .16%, respectively, of the value of each fund’s average daily net assets and is payable monthly. Pursuant to each fund’s management agreement, the Manager has agreed to reduce its management fee in an amount equal to theTrustees’ fees and expenses of independent counsel of each fund. During the period ended June 30, 2014, fees reimbursed by the Manager amounted to $41,868 for Dreyfus Institutional Reserves Money Fund, $19,711 for Dreyfus Institutional Reserves Treasury Fund and $10,997 for Dreyfus Institutional Reserves Treasury Prime Fund.
As to each fund, unless the Manager gives a fund’s investors 90 days notice to the contrary, the Manager, and not the fund, will be liable for fund expenses (exclusive of taxes, brokerage commissions and extraordinary expenses) other than the following expenses, which will be borne by the fund: the management fee, and with respect to the funds’ Hamilton shares, Agency shares, Premier shares and Classic shares, Service Plan expenses.
The Manager has also undertaken to waive receipt of the management fee and/or reimburse operating expenses in order to facilitate a daily yield at or above a certain level which may change from time to time. This undertaking is
| Table 1—Capital Loss Carryover | ||||||||||||
| Post-Enactment | ||||||||||||
| Short-Term | ||||||||||||
| 2014($)† | 2015($)† | 2016($)† | 2017($)† | 2018($)† | Losses ($)†† | Total | ||||||
| Dreyfus Institutional Reserves Money Fund | — | 14,477 | — | — | — | 88,818 | 103,295 | |||||
| Dreyfus Institutional Reserves Treasury Fund | 214,682 | 112,276 | — | — | — | — | 326,958 | |||||
| Dreyfus Institutional Reserves Treasury Prime Fund | — | — | 3,548 | — | 16 | — | 3,564 | |||||
† If not applied, the carryovers expire in the above fiscal years.
The Funds 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
voluntary and not contractual, and may be terminated at any time. Table 2 summarizes the reduction in expenses for each relevant class of each fund pursuant to the undertakings during the period ended June 30, 2014.
(b) Under each fund’s Service Plan adopted pursuant to Rule 12b-1 under the Act, with respect to each fund’s applicable Hamilton shares, Agency shares, Premier shares and Classic shares, each fund pays the Distributor for distributing such classes of shares, for servicing and/or maintaining shareholder accounts and for advertising and marketing. For Dreyfus Institutional Reserves Money Fund and Dreyfus Institutional Reserves Treasury Fund, the Service Plan provides for payments to be made at annual rates of .05%, .15%, .30% and .55% of the value of such class’ average daily net assets of the Hamilton,Agency, Premier and Classic shares, respectively.The Service Plan provides for payments to be made at annual rates of .04% and .29% for Dreyfus Institutional Reserves Treasury Prime Fund’s Hamilton and Premier shares’ average daily net assets, respectively.The fees payable under the Service Plan are payable without regard to actual expenses incurred. Table 3
summarizes the amount each fund was charged pursuant to the Service Plan during the period ended June 30, 2014.
Table 4 summarizes the components of “Due to The Dreyfus Corporation and affiliates” in the Statements of Assets and Liabilities for each fund.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex.Annual retainer fees are allocated to each fund based on net assets.
NOTE 3—Subsequent Event:
On July 23, 2014, the SEC adopted amendments to the rules that govern money market mutual funds. In part, the amendments will require structural changes to most types of money market funds to one extent or another; however, the SEC provided for an extended 2-year transition period to comply with such structural requirements.At this time, management is evaluating the reforms adopted and the manner for implementing these reforms over time and its impact on the financial statements.
| Table 2—Expense Reductions | ||||||
| Institutional | Hamilton | Agency | Premier | Classic | ||
| Shares ($) | Shares ($) | Shares ($) | Shares ($) | Shares ($) | ||
| Dreyfus Institutional Reserves Money Fund | 983 | 197,289 | 7,339 | 521,812 | 342,977 | |
| Dreyfus Institutional Reserves Treasury Fund | 60,182 | 133,823 | 4,084 | 1,345,968 | 786,184 | |
| Dreyfus Institutional Reserves Treasury Prime Fund | 215,241 | 5,926 | — | 842,565 | — | |
| Table 3—Service Plan Fees | ||||||
| Hamilton | Agency | Premier | Classic | |||
| Shares ($) | Shares ($) | Shares ($) | Shares ($) | |||
| Dreyfus Institutional Reserves Money Fund | 352,093 | 8,635 | 562,607 | 357,575 | ||
| Dreyfus Institutional Reserves Treasury Fund | 48,559 | 2,599 | 1,031,255 | 678,950 | ||
| Dreyfus Institutional Reserves Treasury Prime Fund | 1,426 | — | 590,520 | — | ||
| Table 4—Due to The Dreyfus Corporation and Affiliates | ||||||
| Management | Service Plan | Less Expense | ||||
| Fees ($) | Fees ($) | Reimbursement ($) | ||||
| Dreyfus Institutional Reserves Money Fund | 339,050 | 195,889 | (158,798 | ) | ||
| Dreyfus Institutional Reserves Treasury Fund | 131,969 | 277,461 | (349,726 | ) | ||
| Dreyfus Institutional Reserves Treasury Prime Fund | 84,038 | 83,067 | (151,167 | ) | ||
24
INFORMATION ABOUT THE RENEWAL OF THE
FUNDS’ MANAGEMENT AGREEMENT (Unaudited)
At a meeting of the funds’ Board of Trustees held on April 24, 2014, the Board considered the renewal of each fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (each, 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 funds, 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 each 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 Funds.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. For each fund, 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 funds.
The Board also considered research support available to, and portfolio management capabilities of, each 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 Funds’ Performance and Management Fee and Expense Ratio. For each fund, the Board reviewed reports prepared by Lipper, Inc. (“Lipper”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended March 31, 2014, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Lipper as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Lipper used to select the Performance Groups and Performance Universes and the Expense Groups and Expense Universes.
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 each fund and its comparison funds.
DREYFUS INSTITUTIONAL RESERVES TREASURY PRIME FUND
The Board discussed the results of the comparisons and noted that the fund’s total return performance was below (by one or two basis points) the Performance Group medians and below (by one basis point) the Performance Universe medians for all periods.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
The Funds 25
INFORMATION ABOUT THE RENEWAL OF THE FUNDS’ MANAGEMENT AGREEMENT (Unaudited) (continued)
of the comparisons.Taking into account the fund’s “unitary” fee structure, the Board noted that the fund’s contractual management fee was below the Expense Group median and the fund’s actual management fee and total expenses were below the Expense Group and Expense Universe medians (lowest total expenses in the Expense Group and Expense Universe). The Board also considered the current fee waiver arrangement undertaken by Dreyfus.
DREYFUS INSTITUTIONAL RESERVES TREASURY FUND
The Board discussed the results of the comparisons and noted that the fund’s total return performance was variously above, at or below (by one basis point) the Performance Group and Performance Universe medians, including several periods in the first quartiles of the Performance Group and Performance Universe.
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. Taking into account the fund’s “unitary” fee structure, the Board noted that the fund’s contractual management fee was below the Expense Group median and the fund’s actual management fee and total expenses were below the Expense Group and Expense Universe medians. The Board also considered the current fee waiver arrangement undertaken by Dreyfus.
DREYFUS INSTITUTIONAL RESERVES MONEY FUND
The Board discussed the results of the comparisons and noted that the fund’s total return performance was variously above, at or below (by two basis points) the Performance Group medians and above the Performance Universe medians for all periods.
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. Taking into account the fund’s “unitary” fee structure, the Board noted that the fund’s contractual management fee was below the Expense Group median (lowest in the Expense Group), the fund’s actual management fee was at the
Expense Group median and below the Expense Universe median and the fund’s total expenses were below the Expense Group and Expense Universe medians.
Other Dreyfus Fund Fees. For each fund, Dreyfus representatives reviewed with the Board the management or investment advisory fees paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund (the “Similar Funds”), and explained the nature of the Similar Funds.They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors, noting the fund’s “unitary” fee structure. The Board considered the relevance of the fee information provided for the Similar Funds to evaluate the appropriateness and reasonableness of the fund’s management fee.
Analysis of Profitability and Economies of Scale. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage for managing each 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. With respect to Dreyfus Institutional Reserves Treasury Prime Fund and Dreyfus Institutional Reserves Treasury Fund, the Board also noted the fee waiver 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 each Agreement bear a reasonable relationship to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, and (2) in light of the relevant circumstances for each fund and the extent to which economies
26
of scale would be realized if a fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Dreyfus representatives noted that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that Dreyfus may have realized any economies of scale would be less. Dreyfus representatives also noted that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in a 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 funds’ 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 each Agreement. Based on the discussions and considerations as described above, the Board concluded and determined, as to each fund, as follows.
-
The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
-
The Board generally was satisfied with the fund’s relative performance.
-
The Board concluded that the fee paid to Dreyfus was reasonable 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 consid- ered 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 each 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 each 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 each fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years. The Board determined that renewal of each Agreement was in the best interests of the fund and its respective shareholders.
The Funds 27
For More Information
| Telephone Call your Dreyfus Cash Investment Services Division representative or 1-800-346-3621 |
| E-mail Access Dreyfus Cash Investment Services Division at www.dreyfus.com. |
| You can obtain product information and E-mail requests for information or literature. |
| Mail Dreyfus Cash Investment Services Division, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 |
Each fund will disclose daily, on www.dreyfus.com, the complete schedule of each fund’s holdings as of the end of the previous business day.
The schedule of holdings will remain on the website until the fund files its Form N-Q or Form N-CSR for the period that includes the date
of the posted holdings.
Each 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. Each fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be
reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may
be obtained by calling 1-800-SEC-0330.
Information regarding how each fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is
available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable. [CLOSED END FUNDS ONLY]
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(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 Institutional Reserves Funds
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak,
President
Date: August 21, 2014
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak,
President
Date: August 21, 2014
By: /s/ James Windels
James Windels,
Treasurer
Date: August 21, 2014
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)