[Graphic]
Bond Index Portfolio
Semi-Annual Report to Investors
November 30, 1997
[Graphic]
1-800-341-7400
www.federatedinvestors.com
Cusip 314204108
G01854-01 (1/98)
[Graphic]
PORTFOLIO OF INVESTMENTS
BOND INDEX PORTFOLIO
NOVEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
ASSET-BACKED SECURITIES--1.0%
AUTOMOBILE--0.1%
$ 56,299 Premier Auto Trust 1994-2, Class A3, 6.35%, 5/2/2000 $ 56,334
FINANCIAL INTERMEDIARIES--0.9%
750,000 Citibank Credit Card Master Trust 1997-6, Class A, 8/15/2006 489,375
Total Asset-Backed Securities (identified cost $531,737) 545,709
CORPORATE BONDS--16.8%
AUTOMOBILE--0.8%
475,000 Ford Motor Co., Deb., 7.125%, 11/15/2025 486,457
BANKING--1.6%
550,000 GreenPoint Bank, Sr. Note, 6.70%, 7/15/2002 550,589
300,000 Summit Bancorp, Bond, 8.40%, 3/15/2027 328,605
Total 879,194
BEVERAGE & TOBACCO--1.4%
275,000 Anheuser-Busch Cos., Inc., Note, 7.00%, 9/1/2005 278,746
150,000 PepsiCo, Inc., Deb., 7.625%, 12/18/1998 152,265
350,000 Philip Morris Cos., Inc., Note, 6.375%, 2/1/2006 341,040
Total 772,051
COMMUNICATIONS--0.6%
300,000 Lucent Technologies, Inc., Note, 7.25%, 7/15/2006 316,071
ECOLOGICAL SERVICES & EQUIPMENT--0.5%
300,000 USA Waste Services, Inc., Sr. Note, 7.00%, 10/1/2004 304,314
FINANCE - AUTOMOTIVE--0.5%
300,000 General Motors Acceptance Corp., Note, 5.625%, 2/15/2001 294,585
FINANCIAL INTERMEDIARIES--2.5%
400,000 Bankers Trust New York Corp., Sub. Note, 8.25%, 5/1/2005 434,636
400,000 FINOVA Capital Corp., Note, 7.40%, 6/1/2007 420,612
250,000 Lehman Brothers Holdings, Inc., Note, 8.50%, 8/1/2015 284,928
300,000 Salomon, Inc., Sr. Note, 7.75%, 5/15/2000 308,883
Total 1,449,059
</TABLE>
BOND INDEX PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CORPORATE BONDS--CONTINUED
FOOD PRODUCTS--1.5%
$ 500,000 Hershey Foods Corp., 6.95%, 8/15/2012 $ 515,910
350,000 Nabisco, Inc., Unsecd. Note, 8.00%, 1/15/2000 360,840
Total 876,750
INDUSTRIAL--0.9%
500,000 Du Pont (E.I.) de Nemours & Co., Note, 6.50%, 9/1/2002 505,300
INSURANCE--0.7%
400,000 Hartford Life, Inc., Note, 7.10%, 6/15/2007 412,970
METALS & MINING--0.5%
250,000 Barrick Gold Corp., Deb., 7.50%, 5/1/2007 261,838
OIL & GAS--0.5%
265,000 Occidental Petroleum Corp., Sr. Note, 10.125%, 11/15/2001 298,303
PHARMACEUTICAL--0.4%
250,000 American Home Products Corp., Note, 7.70%, 2/15/2000 256,825
RETAILERS--0.7%
400,000 Wal-Mart Stores, Inc., Unsecd. Note, 7.50%, 5/15/2004 424,136
SOVEREIGN--0.5%
300,000 Italy (Republic of), Deb., 6.875%, 9/27/2023 308,472
SOVEREIGN GOVERNMENT--1.4%
400,000 Colombia, Republic of, Bond, 7.625%, 2/15/2007 374,724
400,000 Quebec, Province of, Deb., Series NN, 7.125%, 2/9/2024 406,856
Total 781,580
TELECOMMUNICATIONS & CELLULAR--0.9%
500,000 Korea Telecom, Note, 7.40%, 12/1/1999 491,880
UTILITIES--0.9%
500,000 Pacific Gas & Electric Co., 1st Ref. Mtg., 7.875%, 3/1/2002 529,515
Total Corporate Bonds (identified cost $9,437,254) 9,649,300
GOVERNMENT AGENCIES--4.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION--1.6%
475,000 7.10%, 4/10/2007 504,018
200,000 7.23%, 12/17/2002 200,000
175,000 7.90%, 9/19/2001 185,966
Total 889,984
</TABLE>
BOND INDEX PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
GOVERNMENT AGENCIES--CONTINUED
FEDERAL NATIONAL MORTGAGE ASSOCIATION--1.6%
$ 500,000 6.75%, 7/30/2007 $ 504,530
390,000 7.50%, 2/11/2002 410,354
Total 914,884
GOVERNMENT AGENCY--1.2%
675,000 Private Export Funding Corp., 7.30%, 1/31/2002 705,872
Total Government Agencies (identified cost $2,479,119) 2,510,740
MORTGAGE BACKED SECURITIES--27.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION--8.9%
302,999 6.00%, 10/1/2012 296,748
399,153 6.50%, 2/1/2011 399,775
503,634 6.50%, 2/1/2027 494,503
419,917 7.00%, 1/1/2012 425,514
260,939 7.00%, 5/1/2024 263,222
288,266 7.00%, 6/1/2024 290,606
366,235 7.00%, 1/1/2027 367,491
291,435 7.50%, 11/1/2011 298,490
478,096 7.50%, 6/1/2026 488,207
287,320 7.50%, 11/1/2026 293,692
392,347 7.50%, 5/1/2027 400,684
279,764 8.00%, 6/1/2027 289,030
215,819 8.00%, 7/1/2002 220,431
336,699 8.50%, 3/1/2025 351,642
222,527 9.00%, 4/1/2022 239,006
Total 5,119,041
FEDERAL NATIONAL MORTGAGE ASSOCIATION--10.5%
221,814 6.00%, 7/1/2012 217,100
340,891 6.50%, 7/1/2012 339,718
596,419 6.50%, 5/1/2027 584,860
294,342 7.00%, 5/1/2004 297,559
212,030 7.00%, 6/1/2009 215,211
250,000 7.00%, 11/1/2012 252,733
371,760 7.00%, 5/1/2024 374,199
212,083 7.00%, 6/1/2024 213,475
490,394 7.00%, 3/1/2027 491,311
</TABLE>
BOND INDEX PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
MORTGAGE BACKED SECURITIES--CONTINUED
FEDERAL NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 276,178 7.50%, 6/1/2011 $ 282,823
227,007 7.50%, 2/1/2026 231,761
450,528 7.50%, 11/1/2026 459,962
297,804 7.50%, 9/1/2027 303,760
297,000 7.50%, 11/1/2027 302,940
463,775 8.00%, 3/1/2026 480,002
360,502 8.50%, 8/1/2023 379,832
274,434 8.50%, 12/1/2026 286,695
273,725 9.00%, 6/1/2025 291,345
Total 6,005,286
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--8.1%
210,729 6.50%, 5/15/2011 211,386
298,468 6.50%, 5/15/2027 293,710
408,048 7.00%, 5/15/2026 409,194
344,105 7.00%, 4/15/2027 345,072
401,905 7.50%, 6/15/2024 410,948
465,754 7.50%, 6/15/2026 475,069
442,033 8.00%, 8/15/2026 457,088
371,239 8.00%, 1/15/2027 383,883
303,000 8.00%, 6/15/2027 313,320
361,520 8.50%, 5/15/2027 378,125
333,535 9.00%, 6/15/2025 355,421
353,499 9.00%, 10/15/2027 376,477
84,724 9.50%, 1/15/2019 91,993
125,352 9.50%, 10/15/2020 136,076
Total 4,637,762
Total Mortgage-Backed Securities (identified cost 15,762,089
$15,440,934)
U.S. TREASURY SECURITIES--60.8%
U.S. TREASURY BONDS--13.8%
1,900,000 6.00%, 2/15/2026 1,870,018
950,000 7.125%, 2/15/2023 1,069,938
575,000 7.25%, 5/15/2004 617,136
2,950,000 7.25%, 5/15/2016 3,318,278
370,000 9.375%, 2/15/2006 452,266
</TABLE>
BOND INDEX PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY SECURITIES--CONTINUED
U.S. TREASURY BONDS--CONTINUED
$ 400,000 11.75%, 11/15/2014 $ 591,376
Total 7,919,012
U.S. TREASURY NOTES--33.2%
2,805,000 6.25%, 2/15/2003 2,852,320
1,800,000 6.50%, 5/31/2001 1,836,558
850,000 6.50%, 5/15/2005 880,413
1,050,000 6.50%, 10/15/2006 1,091,832
5,050,000 7.00%, 4/15/1999 5,131,255
2,350,000 7.75%, 12/31/1999 2,438,501
300,000 7.75%, 2/15/2001 316,548
125,000 8.875%, 5/15/2000 4,413,090
Total 18,960,517
Total U.S. Treasury Securities (identified cost $26,215,449) 26,879,529
(A)REPURCHASE AGREEMENTS--4.5%
2,590,000 BT Securities Corp., 5.73%, dated 11/28/1997, due 12/1/1997 2,590,000
Total Investments (identified cost $56,694,493)(b) $ 57,937,367
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(b) The cost of investments for federal tax purposes amounts to $56,694,493. The
net unrealized appreciation/depreciation of investments on a federal tax basis
amounts to $1,242,870 which is comprised of $1,295,462 appreciation and $52,592
depreciation at November 30, 1997.
Note: The categories of investments are shown as a percentage of net assets
($57,375,593) at November 30, 1997.
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
BOND INDEX PORTFOLIO
NOVEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Total investments in securities, at value (identified
and tax cost $56,694,493) $ 57,937,367
Cash 276
Income receivable 685,021
Deferred organizational costs 3,730
Total assets 58,626,394
Liabilities:
Payable for investments purchased 1,250,801
Net Assets $ 57,375,593
Net Assets Consist of:
Paid-in capital for beneficial interests $ 57,375,593
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
BOND INDEX PORTFOLIO
SIX MONTHS ENDED NOVEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 1,640,425
EXPENSES:
Investment advisory fee $62,000
Administrative personnel and services fee 30,000
Custodian fees 3,671
Directors'/Trustees' fees 4,073
Auditing fees 9,915
Legal fees 3,765
Portfolio accounting fees 38,053
Share registration costs 227
Printing and postage 2,996
Insurance premiums 1,505
Miscellaneous 1,973
Total expenses 158,178
Waivers and reimbursements--
Waiver of investment advisory fee $(62,000)
Reimbursement of other operating expenses (46,579)
Total waivers and reimbursements (108,579)
Net expenses 49,599
Net investment income 1,590,826
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 83,903
Net change in unrealized appreciation (depreciation)
of investments 1,280,541
Net realized and unrealized gain on investments 1,364,444
Change in net assets resulting from operations $ 2,955,270
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
BOND INDEX PORTFOLIO
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, MAY 31,
1997 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income/operating loss $ 1,590,826 $ 2,058,104
Net realized gain on investments 83,903 54,299
Net change in unrealized appreciation/depreciation 1,280,541 65,788
Change in net assets resulting from operations 2,955,270 2,178,191
TRANSACTIONS IN INVESTOR'S BENEFICIAL INTEREST--
Additions 32,487,561 34,754,102
Reductions (18,297,583) (19,301,390)
Net increase from transactions in Investor's beneficial 14,189,978 15,452,712
interest
Change in net assets 17,145,248 17,630,903
NET ASSETS:
Beginning of period 40,230,345 22,599,442
End of period $ 57,375,593 $ 40,230,345
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
FEDERATED INVESTMENT PORTFOLIOS
BOND INDEX PORTFOLIO
NOVEMBER 30, 1997
ORGANIZATION
Federated Investment Portfolios (the "Portfolio Series") was organized as a
Massachusetts business trust under a Declaration of Trust dated September 29,
1995. The Portfolio Series is currently comprised of one portfolio, the Bond
Index Portfolio (the "Portfolio"). The Declaration of Trust permits the
Portfolio Series to issue an unlimited number of beneficial interests in the
Portfolio. The Portfolio, which began operations on January 2, 1996, is an
open-end, diversified management, investment company under the Investment
Company Act of 1940 (the "Act"). The investment objective of the Portfolio is to
provide investment results that correspond to the investment performance of the
Lehman Brothers Aggregate Bond Index.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
Listed corporate bonds and other fixed-income and asset-backed securities are
valued at the last sale price reported on national securities exchanges.
Unlisted bonds and securities and short-term obligations are valued at the
prices provided by an independent pricing service. Short-term securities
obtained with remaining maturities of sixty days or less may be stated at
amortized cost, which approximates market value.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to investors are recorded on the ex-dividend date.
Distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles.
REPURCHASE AGREEMENTS
The Portfolio may purchase portfolio securities from financial institutions
deemed to be creditworthy by the investment adviser subject to the seller's
agreement to repurchase and the Portfolio's agreement to resell such securities
at mutually agreed-upon prices. Securities purchased subject to such repurchase
agreements are deposited with the Portfolio's custodian or are maintained in the
Federal Reserve/Treasury book-entry system and must have, at all times, an
aggregate market value of not less than 102% of the repurchase price (including
accrued interest).
If the value of the underlying security, including accrued interest, falls below
102% of the repurchase price plus accrued interest, the Portfolio will require
the seller to deposit additional collateral by the next business day. Default or
bankruptcy of the seller may, however, expose the Portfolio to a risk of loss in
the event that the Portfolio is delayed or prevented from exercising its right
to dispose of the underlying collateral securities or to the extent that
proceeds from a sale of the underlying securities were less than the repurchase
price under the agreement.
DEFERRED ORGANIZATION EXPENSES
Organization expenses incurred by the Portfolio in connection with its
organization have been deferred and are being amortized over a period not to
exceed sixty months beginning with the commencement of operations of the
Portfolio.
FEDERAL INCOME TAXES
The Portfolio will be treated as a partnership for federal income tax purposes.
As such, each investor in the Portfolio will be subject to taxation on its share
of the Portfolio's ordinary income and capital gains. It is intended that the
Portfolio's assets will be managed in such a way that an investor in the
Portfolio will be able to satisfy the requirements of Subchapter M of the
Internal Revenue Code.
OTHER
Investment transactions are accounted for on the trade date.
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Research Corp., the Portfolio's investment adviser (the "Adviser"), is
entitled to receive for its services an annual investment advisory fee equal to
0.25% of the Portfolio's average daily net assets. The Adviser has entered into
a sub-advisory contract with the United States Trust Company of Connecticut
("U.S. Trust"). Under the terms of the contract, the Adviser is obligated to pay
U.S. Trust an annual investment advisory fee equal to 0.12% of the Portfolio's
average daily net assets. For the six-month period ended November 30, 1997, the
Adviser and U.S. Trust have voluntarily agreed to waive all of their fees.
ADMINISTRATIVE FEE
Federated Administrative Services, Inc. ("FAS"), provides the Portfolio with
administrative services and personnel. The FAS fee is based upon 0.05% on the
first $1 billion of average aggregate daily net assets of the Portfolio, subject
to an annual minimum fee of $60,000.
PORTFOLIO ACCOUNTING FEE
Federated Services Company ("FServ"), an affiliate of FAS, maintains the
Portfolio's accounting records for which it receives a fee. The fee is based on
the level of the Portfolio's average daily net assets for the period, plus
out-of-pocket expenses
GENERAL
Certain of the Officers and Directors of the Portfolio Series are Officers and
Directors or Trustees of the above companies.
INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term investments, for the
six months ended November 30, 1997, were as follows:
COST OF PURCHASES $ 14,846,827
PROCEEDS FROM SALES $ 7,453,565
SELECTED FINANCIAL DATA
For the years ended May 31:
1997(A) 1997 1996 1995(B)
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.20%* 0.20% 0.09% 0.00%
Net investment income 6.41%* 7.06% 7.00% 7.45%
Expense waiver/reimbursement(c) 0.44%* 0.75% 0.89% 0.69%
SUPPLEMENTAL DATA:
Portfolio turnover 24% 49% 43% 67%
* Computed on an annualized basis.
(a) For the six months ended November 30, 1997 (unaudited).
(b) Reflects operations for the period from July 11, 1994 (date of initial
public investment) to May 31, 1995.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
Anthony R. Bosch
Assistant Secretary
