FTI
FUNDS
Supplement to Prospectus
dated December 22, 1995
FTI SMALL CAPITALIZATION
EQUITY FUND
FTI INTERNATIONAL EQUITY FUND
FTI INTERNATIONAL BOND FUND
FTI GLOBAL BOND FUND
June 30, 1996
[LOGO]
Cusip 302927108
Cusip 302927207
Cusip 302927306
Cusip 302927405
G01710-02 (6/96)
[LOGO]
A. Please insert the following "Financial Highlights" table as page 6 of the
prospectus:
FTI SMALL CAPITALIZATION EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
This table should be read in conjunction with the Fund's financial statements
and notes thereto, which may be obtained from the Fund.
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996(A)
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------
Net operating loss (0.02)
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 2.17
- -------------------------------------------------------------------------------------------- -------
Total from investment operations 2.15
- -------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 12.15
- -------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) 21.50%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------
Expenses 1.50%*
- --------------------------------------------------------------------------------------------
Net operating loss (0.89%)*
- --------------------------------------------------------------------------------------------
Expense reimbursement (c) 3.94%*
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 11,753
- --------------------------------------------------------------------------------------------
Average commission rate paid $ 0.0273
- --------------------------------------------------------------------------------------------
Portfolio turnover 31%
- --------------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from January 10, 1996 (date of initial
public investment) to May 31, 1996.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
B. Please insert the following "Financial Highlights" table as page 7 of the
prospectus:
FTI INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
This table should be read in conjunction with the Fund's financial statements
and notes thereto, which may be obtained from the Fund.
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996(A)
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------
Net investment income 0.06
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency 0.63
- -------------------------------------------------------------------------------------------- -------
Total from investment operations 0.69
- -------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 10.69
- -------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) 6.90%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------
Expenses 1.60%*
- --------------------------------------------------------------------------------------------
Net investment income 2.40%*
- --------------------------------------------------------------------------------------------
Expense reimbursement (c) 9.92%*
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 4,879
- --------------------------------------------------------------------------------------------
Average commission rate paid $ 0.0512
- --------------------------------------------------------------------------------------------
Portfolio turnover 11%
- --------------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from January 16, 1996 (date of initial
public investment) to May 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
C. Please insert the following "Financial Highlights" table as page 8 of the
prospectus:
FTI INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
This table should be read in conjunction with the Fund's financial statements
and notes thereto, which may be obtained from the Fund.
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996(A)
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------
Net investment income 0.14
- ----------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign currency (0.29)
- ---------------------------------------------------------------------------------------------- -------
Total from investment operations (0.15)
- ---------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 9.85
- ---------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) (1.50%)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------
Expenses 1.20%*
- ----------------------------------------------------------------------------------------------
Net investment income 4.15%*
- ----------------------------------------------------------------------------------------------
Expense reimbursement (c) 8.03%*
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $3,807
- ----------------------------------------------------------------------------------------------
Portfolio turnover 108%
- ----------------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from January 16, 1996 (date of initial
public investment) to May 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
D. Please insert the following "Financial Highlights" table as page 9 of the
prospectus:
FTI GLOBAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
This table should be read in conjunction with the Fund's financial statements
and notes thereto, which may be obtained from the Fund.
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996(A)
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------
Net investment income 0.18
- --------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign currency (0.34)
- -------------------------------------------------------------------------------------------- -------
Total from investment operations (0.16)
- -------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 9.84
- -------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) (1.60%)
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------
Expenses 1.20%*
- --------------------------------------------------------------------------------------------
Net investment income 5.69%*
- --------------------------------------------------------------------------------------------
Expense reimbursement (c) 61.28%*
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $989
- --------------------------------------------------------------------------------------------
Portfolio turnover 94%
- --------------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 8, 1996 (date of initial
public investment) to May 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
E. Please add the following information as a final sentence of the first
paragraph under the sub-heading "Voting Rights" under the heading
"Shareholder Information" which begins on page 33:
"As of June 4, 1996, Fiduciary Trust Company International may for certain
purposes be deemed to control the Funds because it is owner of record of certain
shares of the Funds."
FTI FUNDS
SUPPLEMENT TO THE COMBINED STATEMENT OF ADDITIONAL INFORMATION DATED
DECEMBER 22, 1995
A. Please add the following information to the sub-section entitled
"Officers and Trustees" which begins on page 11:
C. Christine Thomson
Federated Investors Tower
Pittsburgh, Pennsylvania
Birthdate: September 1, 1957
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services; Vice President and
Assistant Treasurer of some of the Federated Funds.
B. Please add the following information to the section "Trust Ownership"
which appears on page 12:
"As of June 4, 1996, the following shareholder of record owned 5% or
more of the outstanding shares of FTI Small Capitalization Equity Fund:
Fiduciary Trust Company International, New York, New York, on behalf of
certain underlying accounts, owned approximately 960,818 shares
(98.14%).
As of June 4, 1996, the following shareholders of record owned 5% or
more of the outstanding shares of FTI International Equity Fund:
Fiduciary Trust Company International, New York, New York, on behalf of
certain underlying accounts, owned approximately 450,583 shares
(94.52%); Northern Trust Bank of Florida, N.A., Miami, Florida, on
behalf of certain underlying accounts, owned approximately 26,115 shares
(5.48%).
As of June 4, 1996, the following shareholder of record owned 5% or more
of the outstanding shares of FTI International Bond Fund: Fiduciary
Trust Company International, New York, New York, on behalf of certain
underlying accounts, owned approximately 386,385 shares (100%).
As of June 4, 1996, the following shareholders of record owned 5% or
more of the outstanding shares of FTI Global Bond Fund: Fiduciary Trust
Company International, New York, New York, on behalf of certain
underlying accounts, owned approximately 90,521 shares (85.70%);
Federated Administrative Systems, Pittsburgh, Pennsylvania, owned
approximately 10,000 shares (9.47%)."
C.Please add the following as the second paragraph of the section entitled
"Advisory Fees" which appears on page 13:
"For the period from January 10, 1996 (date of initial public
investment) to May 31, 1996, the Adviser earned from FTI Small
Capitalization Equity Fund $19,674. For the period from January 16, 1996
(date of initial public investment) to May 31, 1996, the Adviser earned
from FTI International Equity Fund $11,935. For the period from January
16, 1996 (date of initial public investment) to May 31, 1996, the
Adviser earned from FTI International Bond Fund $9,135. For the period
from February 8, 1996 (date of initial public investment) to May 31,
1996, the Adviser earned from FTI Global Bond Fund $1,019."
D.Please add the following as the first paragraph of the section entitled
"Administrative Services" which appears on page 14:
"For the period from January 10, 1996 (date of initial public
investment) to May 31, 1996, Federated Administrative Services earned
from FTI Small Capitalization Equity Fund $30,943. For the period from
January 16, 1996 (date of initial public investment) to May 31, 1996,
Federated Administrative Services earned from FTI International Equity
Fund $30,328. For the period from January 16, 1996 (date of initial
public investment) to May 31, 1996, Federated Administrative Services
earned from FTI International Bond Fund $28,894. For the period from
February 8, 1996 (date of initial public investment) to May 31, 1996,
Federated Administrative Services earned from FTI Global Bond Fund $23,
361."
E.Please add the following as the second paragraph of the section entitled
"Determining Net Asset Value" which begins on page 15:
"Dividend income is recorded on the ex-dividend date, except certain
dividends from foreign securities where the ex-dividend date may have
passed, are recorded as soon as the Trust is informed of the ex-dividend
date."
F.Please add the following as the second paragraph of the section entitled
"Total Return" which appears on page 17:
"Cumulative total return reflects total performance over a specific
period of time. Total return assumes and is reduced by the payment of
the maximum sales charge and contingent deferred sales charge, if
applicable. The cumulative total return for FTI Small Capitalization
Equity Fund for the period between January 10, 1996 (date of initial
public investment) to May 31, 1996, was 21.50%. The cumulative total
return for FTI International Equity Fund for the period between January
16, 1996 (date of initial public investment) to May 31, 1996, was 6.90%.
The cumulative total return for FTI International Bond Fund for the
period between January 16, 1996 (date of initial public investment) to
May 31, 1996, was (1.50%). The cumulative total return for FTI Global
Bond Fund for the period between February 8, 1996 (date of initial
public investment) to May 31, 1996, was (1.60%)."
G.Please add the following as the third paragraph of the section entitled
"Yield" which appears on page 17:
"The SEC yield for the 30-day period ended May 31, 1996 was: 5.42% for
FTI International Bond Fund and 5.02% for FTI Global Bond Fund."
June 30, 1996
Cusip 302927108
Cusip 302927207
Cusip 302927306
Cusip 302927405
G01598-07 (6/96)
EDGEWOOD SERVICES, INC.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
