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Dreyfus Government Cash Management Funds – ‘N-CSR’ for 1/31/20

On:  Thursday, 3/26/20, at 3:18pm ET   ·   Effective:  3/26/20   ·   For:  1/31/20   ·   Accession #:  740766-20-5   ·   File #:  811-03964

Previous ‘N-CSR’:  ‘N-CSR’ on 4/1/19 for 1/31/19   ·   Next:  ‘N-CSR’ on 3/31/21 for 1/31/21   ·   Latest:  ‘N-CSR’ on 3/25/24 for 1/31/24   ·   33 References:   By:  Dreyfus Cash Management – ‘485BPOS’ on 5/26/21 By:  Dreyfus Tax Exempt Cash Management Funds – ‘485BPOS’ on 5/26/21 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 4/29/21 By:  Dreyfus Liquid Assets, Inc. – ‘485BPOS’ on 4/28/21 By:  BNY Mellon Large Cap Securities Fund, Inc. – ‘485BPOS’ on 4/26/21 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 3/30/21 By:  Dreyfus Institutional Liquidity Funds – ‘485BPOS’ on 3/29/21 By:  Bny Mellon Ultra Short Income Fund – ‘485BPOS’ on 3/26/21 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 1/29/21 By:  Bny Mellon Opportunity Funds – ‘485BPOS’ on 1/27/21 By:  Dreyfus Government Cash Management Funds – ‘497’ on 12/23/20 By:  Dreyfus Government Cash Management Funds – ‘N-14/A’ on 12/18/20 By:  BNY Mellon Large Cap Securities Fund, Inc. – ‘497’ on 11/30/20 By:  Bny Mellon Opportunity Funds – ‘485BPOS’ on 11/30/20 By:  BNY Mellon Investment Funds VII, Inc. – ‘485BPOS’ on 11/30/20 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 11/23/20 By:  Dreyfus Cash Management – ‘485BPOS’ on 11/20/20 By:  Dreyfus Government Cash Management Funds – ‘N-14’ on 11/18/20 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 11/16/20 By:  Dreyfus Government Cash Management Funds – ‘485BPOS’ on 11/16/20 By:  Dreyfus Treasury Obligations Cash Management – ‘485BPOS’ on 11/16/20 By:  Dreyfus Treasury Securities Cash Management – ‘485BPOS’ on 11/16/20 By:  Dreyfus Treasury Securities Cash Management – ‘485APOS’ on 11/13/20 By:  Dreyfus Government Cash Management Funds – ‘485APOS’ on 11/13/20 By:  Dreyfus Treasury Obligations Cash Management – ‘485APOS’ on 11/13/20 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 11/6/20 By:  Dreyfus Institutional Preferred Money Market Funds – ‘485BPOS’ on 11/5/20 By:  Dreyfus Cash Management – ‘485APOS’ on 9/24/20 By:  Dreyfus Treasury Securities Cash Management – ‘485APOS’ on 9/21/20 By:  Dreyfus Treasury Obligations Cash Management – ‘485APOS’ on 9/21/20 By:  Dreyfus Government Cash Management Funds – ‘485APOS’ on 9/21/20 By:  BNY Mellon Investment Funds VII, Inc. – ‘497’ on 9/15/20 By:  BNY Mellon Sustainable U.S. Equity Fund, Inc. – ‘485BPOS’ on 9/14/20 

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 3/26/20  Dreyfus Gov’t Cash Mgmt Funds     N-CSR       1/31/20    4:2.8M
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Document/Exhibit                   Description                      Pages   Size 

 1: N-CSR       Certified Annual Shareholder Report by an           HTML   1.52M 
                Investment Company                                               
 4: EX-99.906 CERT  Certification Required by Section 906           HTML      9K 
 3: EX-99.CERT  Certification Required by Rule 30A-2                HTML     16K 
 2: EX-99.CODE ETH  Code of Ethics                                  HTML     33K 

Dreyfus Cash Management Funds

ANNUAL REPORT January 31, 2020

Contents

T H E F U N D S

F O R  M O R E  I N F O R M AT I O N

Back Cover

LETTERS TO SHAREHOLDERS

Dear Shareholder:

This annual report for the Dreyfus Cash Management Funds (Taxable) covers the 12-month period ended January 31, 2020. Over the reporting period, these funds achieved the following yields and, taking into account the effects of compounding, the following effective yields:¹

Yields of money market instruments declined during the reporting period, in response to lower short-term interest rates from the Federal Reserve Board (the “Fed”).

Federal Reserve Cuts Interest Rates Amid Growth Concerns

At the beginning of the reporting period, the U.S. economy was relatively strong, and labor markets were healthy, while “core” inflation, which excludes food and energy prices, remained subdued. By the end of the period, concerns about the global economy and its possible effect on U.S. growth had prompted the Fed to cut the federal funds rate three times, bringing it to a range of 1.50%–1.75%, and expectations of an imminent slowdown had waned.

After the rate hike in December 2018, Fed Chairman Jerome Powell made it clear in January 2019 that the Fed would alter its tightening plans, if the outlook for growth were to weaken. While the U.S. economy continued to expand, global growth became sluggish, with particular weakness appearing in the manufacturing sector in Europe, as indicated by purchasing managers’ indexes.

By March 2019, a slowing global economy and mixed domestic economic data led the Fed to back off plans for further rate hikes during the year. Major central banks in other developed markets also favored more dovish monetary policies. Late in 2019, the European Central Bank reduced short-term interest rates and reimplemented quantitative easing, while the Bank of Japan remained accommodative. China also continued to add stimulus to its economy. As a result, signs of improvement appeared, especially in the manufacturing sector in Europe. Geopolitical concerns also waned somewhat later in the year, as the election in the UK resolved the Brexit issue, and trade tensions eased with the December 2019 announcement of a “Phase 1” deal between the U.S. and China.

Despite trade tensions with China, the U.S. economy remained strong relative to other developed markets but slowed versus 2018. Gross domestic product grew by 2.0% in the second quarter of 2019 and 2.1% in the third quarter. This followed growth rates of 3.1% in the first quarter of 2019 and 2.9% for full-year 2018.

The labor market generally remained strong throughout the 12-month reporting period, though somewhat weaker than in the previous 12-month period. Job creation averaged 171,000, down from 205,000 previously. The unemployment rate stayed steady, varying between 3.5% and 3.8%, and wage growth continued to be relatively strong, remaining at or above 3.0%, year-over-year, during the reporting period.

Despite solid economic growth, a strong labor market and rising wages, inflation remained subdued. The core personal consumption expenditure (PCE) price index, which excludes volatile food and energy prices, stayed below the Fed’s 2.0% target until the third quarter of 2019. As prospects brightened for an interim U.S.-China trade agreement, and the Fed cut interest rates, fears of a growth slowdown eased, economic data became more positive, and the core PCE price index hit 2.1%, the highest since the first quarter of 2018. However, inflation subsided in the fourth quarter, with the PCE declining to 1.3%.

Additional Interest Rate Cuts Appear Likely

Recent events have drastically changed both the market conditions and the Fed’s outlook for interest rates. Beginning with the coronavirus contagion and the subsequent selloff in the world equities, market participants now expect a cut in the federal funds rate of at least 25 basis points in March and more cuts at future FOMC meetings. Given this

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environment, we have extended the fund’s weighted-average maturity to capture higher yields in a declining interest rate environment. As always, we have retained our longstanding focus on quality and liquidity.

¹ Effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results. Yields fluctuate.

² Yields provided reflect the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an undertaking, which is voluntary and temporary, not contractual, and can be terminated at any time without notice.

³ You could lose money by investing in a money market fund. Because the share price of the fund will fluctuate, when you sell your shares, they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

⁴ You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

Short-term corporate, asset-backed securities holdings and municipal securities holdings (as applicable) involve credit and liquidity risks and risk of principal loss.

Sincerely,

Patricia A. Larkin
Chief Investment Officer
Dreyfus Cash Investment Strategies

February 18, 2020

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Dear Shareholder:

We are pleased to present the annual report for the Dreyfus Cash Management Funds (Tax Exempt). For the 12-month period ended January 31, 2020, these tax-exempt money market funds achieved the following yields and effective yields:¹

Yields of municipal money market instruments shrank during the period as a result of strong demand, a relative scarcity of new supply and three quarter-point interest rate reductions by the Federal Reserve Board (the “Fed”).

Effective May 31, 2019, Participant Shares were added to Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free New York Municipal Cash Management.⁵

Interest Rate Cuts and Strong Demand Pushed Yields Lower

The reporting period began soon after the Fed raised the federal funds rate in December 2018 and indicated it would be cautious about future interest rate reductions. However, concerns about domestic economic growth and the global economy led the Fed to implement three quarter-point cuts, beginning in July 2019. At the end of the period, the Fed left rates unchanged, but indicated it was too soon to assess the effect of the coronavirus on Chinese, U.S. and global economic growth.

Strong economic growth in 2018 led to robust revenue collection, leaving states in a healthy fiscal condition at the start of the reporting period. Despite some early concerns about personal income tax collection in 2019, especially in high-tax states such as California, many states met or exceeded their revenue expectations during this period.

Assets in tax-free money market funds seesawed when the industry saw large outflows towards the end of April 2019, as payments for the 2018 tax bills came into play. Large inflows back into the funds in May 2019 pushed rates on variable-rate demand notes lower, but they ratcheted up again in June 2019, before declining in July 2019 in anticipation of a change in Fed policy. These securities are highly liquid and are used to meet redemptions and to react to changes in the federal funds rates. Assets stabilized later in the reporting period, as interest rates on variable-rate demand notes remained relatively attractive when they Treasury yield curve inverted.

Reductions in the federal funds rate, in addition to robust demand for tax-free, fixed-income securities, helped reduce money market yields during the period. The Securities Industry and Financial Markets Association (SIFMA) Index reached a high of 2.30% in April 2019 and declined toward the end of the reporting period, as demand strengthened, and reinvestment cash entered the market. The SIFMA Index is a weekly, high-grade index produced by Bloomberg LP and comprised of seven-day, tax-exempt, variable-rate demand notes. Demand remained strong due to the continued flattening of the Treasury yield curve and the strong inflows into tax-exempt funds, particularly longer-dated portfolios. The SIFMA Index averaged 1.42% during the reporting period, down from 1.71% at the end of 2018.

Longer-dated tax-exempt money market yields were also affected. While the one-year yield on the Municipal Market Analytics yield curve was 2.00% at the end of 2018, it fell to 1.12% by the end of 2019 and to 1.00% by the end of the reporting period.

Spending priorities among the states during the period included augmenting reserves, increasing teacher salaries, funding pension liabilities and meeting infrastructure needs. States and municipalities continued to await progress on a federal infrastructure program, but in the meantime, they considered hikes in state gas taxes to fund serious needs.

Better-than-expected tax collections enabled many states to improve their fiscal condition and increase their “rainy day” funds. However, concerns remain about infrastructure needs, underfunded pension and retiree health care liabilities, and Medicaid spending pressures.

Maintaining a Prudent Investment Posture

In this inverted yield-curve environment, in which short-term yields exceed long-term yields, most municipal money market funds have maintained short-weighted, average maturities, with a focus on liquidity. The funds were no exception, as we set their weighted-average maturities in a range that is consistent with industry averages.

We have continued to identify what we believe to be low credit-risk opportunities among certain state general obligation bonds; essential service revenue bonds issued by water, sewer and electric enterprises; select local credits with strong financial positions and stable tax bases; and various health care and education issuers.

Federal Reserve Ready to Respond to Coronavirus

On March 15, 2020 the Federal Open Market Committee (the “Committee”) released the following statement: “The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the

5

target range for the federal funds rate to 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions and inflation”. We will continue to manage the Funds keeping liquidity and credit quality our focus.

¹ Effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results. Yields fluctuate.

² Yields provided reflect the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an undertaking, which is voluntary and temporary, not contractual, and can be terminated at any time without notice. Had these expenses not been absorbed, the yield for Dreyfus AMT-Free Municipal Cash Management Plus, Participant shares would have been lower and, in some cases, seven-day yield during the reporting period would have been negative absent the expense absorption.

³ You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

⁴ You could lose money by investing in a money market fund. Because the share price of the fund will fluctuate, when you sell your shares, they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

⁵ Yields for Participant shares are annualized.

Short-term corporate, asset-backed securities holdings and municipal securities holdings (as applicable) involve credit and liquidity risks and risk of principal loss.

Sincerely,

Colleen Meehan
Senior Portfolio Manager

February 18, 2020

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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 each class of each fund from August 1, 2019 to January 31, 2020. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

^† Expenses are equal to each fund’s annualized expense ratios as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited) (continued)

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 are equal to each fund’s annualized expense ratios as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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STATEMENT OF INVESTMENTS

January 31, 2020

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STATEMENT OF INVESTMENTS (continued)

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^a Security 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 January 31, 2020, these securities amounted to $2,203,465,836 or 21.02% of net assets.
^b Security is a discount security. Income is recognized through the accretion of discount.
^c Variable rate security—rate shown is the interest rate in effect at period end. Date shown represents the earlier of the next interest reset date or ultimate maturity date.
^d Illiquid security; investment has a put feature and a variable or floating rate. The interest rate shown is the current rate as of January 31, 2020 and changes periodically. The due date shown reflects early termination date and the amount due represents the receivable of the fund as of the next interest payment date. At January 31, 2020, these securities amounted to $200,000,000 or 1.91% of net assets.

11

STATEMENT OF INVESTMENTS (continued)

^† Based on net assets.

See notes to financial statements.

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