FEDERATED BOND INDEX FUND
(A Portfolio of Federated Investment Trust)
Institutional Shares
Institutional Service Shares
Supplement to Prospectuses dated September 30, 1997
Federated Bond Index Fund (the "Fund") achieves its investment objective by
investing all of its assets in Bond Index Portfolio (the "Portfolio"), a
diversified series of Federated Investment Portfolios. Federated Research Corp.
(the "Adviser"), pursuant to a sub-advisory agreement (the "Sub-Advisory
Agreement"), delegated the daily management of the securities holdings of the
Portfolio to United States Trust Company of New York. Effective May 31, 1998,
the Sub-Advisory Agreement will terminate. Thereafter, the Adviser will continue
to be responsible for the management of the Portfolio's assets and will assume
the daily management of the Portfolio's securities holdings.
1. Please read all references to the "Investment Managers" as the "Investment
Manager."
2. Please replace the fourth paragraph on the cover page with the following:
Federated Research Corp. is the Portfolio's investment adviser. Federated
Research Corp. may hereinafter be referred to as the "Investment Manager."
For more information on the Investment Manager of the Fund, please refer to
the prospectus section herein entitled "Management of the Trust and
Federated Portfolios."
3. Please replace the fifth paragraph on the cover page of the Institutional
Shares prospectus with the following:
The Institutional Shares offered by this prospectus are not deposits or
obligations of any bank, are not endorsed or guaranteed by any bank, and are
not insured by the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other government agency. Investment in these shares involves
investment risks, including the possible loss of principal.
4. Please replace the fifth paragraph on the cover page of the Institutional
Service Shares prospectus with the following:
The Institutional Service Shares offered by this prospectus are not deposits
or obligations of any bank, are not endorsed or guaranteed by any bank, and
are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other government agency. Investment in these shares
involves investment risks, including the possible loss of principal.
5. Please delete the first paragraph under the heading entitled Investment
Philosophy and Strategies on page 4.
6. Please replace the sub-section entitled Investment Adviser on page 12 with
the following:
Investment Adviser
The Fund seeks to achieve its investment objective by investing all of its
Assets in the Portfolio, which has the same investment objective, policies,
and limitations as the Fund. Federated Research Corp. (the "Adviser") is
responsible for the management of the assets of the Portfolio, and the daily
management of the security holdings of the Portfolio, pursuant to an
investment advisory agreement (the "Advisory Agreement") with Federated
Portfolios on behalf of the Portfolio.
7. Please delete the sub-sections entitled Sub-Adviser, Sub-Advisory Fees,
Sub-Adviser's Background, and Certain Relationships and Activities on pages
12 through 14.
8. Please delete the section entitled Effect of Banking Laws on page 18.
9. Please delete the address for the Sub-Adviser for Bond Index Portfolio on the
back cover page.
May 21, 1998
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FEDERATED BOND INDEX FUND
(A Portfolio of Federated Investment Trust)
Institutional Shares
Institutional Service Shares
Supplement to Statement of Additional Information dated September 30, 1997
Federated Bond Index Fund (the "Fund") achieves its investment objective by
investing all of its assets in Bond Index Portfolio (the "Portfolio"), a
diversified series of Federated Investment Portfolios. Federated Research Corp.
(the "Adviser"), pursuant to a sub-advisory agreement (the "Sub-Advisory
Agreement"), delegated the daily management of the securities holdings of the
Portfolio to United States Trust Company of New York. Effective May 31, 1998,
the Sub-Advisory Agreement will terminate. Thereafter, the Adviser will continue
to be responsible for the management of the Portfolio's assets and will assume
the daily management of the Portfolio's securities holdings.
Please replace the section entitled Investment Advisory and Sub-Advisory
Services on page 17 with the following:
Investment Advisory Services
Adviser to the Portfolio
The Portfolio's investment adviser is Federated Research Corp. (the
"Adviser"). As of September 30, 1996, Federated Research Corp. replaced
Federated Management as the Adviser. In all other respects, the advisory
arrangements are identical. Both advisers are subsidiaries of Federated
Investors, Inc., are registered investment advisers and have common
directors/trustees, officers and employees. All of the voting securities of
Federated Investors, Inc. are owned by a trust, the trustees of which are
John F. Donahue, his wife, and his son, J. Christopher Donahue. For its
advisory services, the Adviser receives an annual investment advisory fee
as described in the prospectus.
The Adviser is responsible for the management of the Portfolio's assets,
making the day-to-day investment decisions for the Portfolio, and placing
the purchase and sales orders for securities transactions of the
Portfolio.
The Advisory Agreement will continue in effect with respect to the
Portfolio as long as such continuance is specifically approved at least
annually by the Trustees of Federated Portfolios or by a majority vote of
the investors in the Portfolio (with the vote of each being in proportion
to the respective values of their investments) and, in either case, by a
majority of the Trustees of Federated Portfolios who are not parties to
the Advisory Agreement, or interested persons of any such party, at a
meeting called for the purpose of voting on the Advisory Agreement. The
Advisory Agreement was approved by the Trustees of Federated Portfolios
and was effective on September 30, 1996. The terms of the contract under
which Federated Research Corp., as the current Adviser, presently performs
this service is identical to that previously performed by Federated
Management, as the former Adviser, and the Sub-Adviser. The Adviser and
administrator have agreed to waive certain fees.
The Advisory Agreement provides that the Adviser may render services to
others, and the agreement is terminable by the Portfolio without penalty
on not more than 60 days' nor less than 30 days' written notice when
authorized either by majority vote of the Fund and the other investors in
the Portfolio (with the vote of each being in proportion to the amount of
its investment), or by a vote of a majority of the Trustees of Federated
Portfolios, or by the Adviser on not more than 60 days' nor less than 30
days' written notice. The Advisory Agreement will automatically terminate
in the event of its assignment. The Advisory Agreement provides that
neither the Adviser nor its personnel shall be liable for any error of
judgment or mistake of law or for any loss arising out of any investment,
or for any act or omission in the execution of security transactions for
the Portfolio, except for willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties under the Advisory
Agreement.
For the fiscal year ended May 31, 1997, Federated Research Corp. and
Federated Management collectively earned investment advisory fees of
$73,686, all of which was voluntarily waived. For the period from January
2, 1996 to May 31, 1996, Federated Management and a previous Sub-Adviser
to the Portfolio, United States Trust Company, voluntarily waived all of
their fees which amounted to $17,632. United States Trust Company of the
Pacific Northwest ("U.S. Trust Pacific") was the investment adviser and
U.S. Trust Company of New York was the sub-adviser of the Predecessor
Portfolio. U.S. Trust Pacific and the Sub-Adviser voluntarily agreed to
waive all of their investment advisory fees and reimburse certain
operational expenses of the Predecessor Portfolio. The investment advisory
fee waivers and expense reimbursements totaled $23,111 and $55,998,
respectively, for the period from June 1, 1995 to January 2, 1996, and
$47,955 and $83,454, respectively, for the period from July 11, 1994 (date
of initial public investment) to May 31, 1995.
May 21, 1998
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