FEDERATED CORE TRUST/PA, POS AMI, 2000-02-29

FEDERATED CORE TRUST/PA
POS AMI, 2000-02-29

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1940 Act File No.811-08519

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-------

Amendment No. 6 .................................... X
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FEDERATED CORE TRUST

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

Copies To:

Matthew G. Maloney, Esquire

Dickstein Shapiro Morin & Oshinsky LLP

2101 L. Street, NW

Washington, DC 20037-1526

FEDERATED CORE TRUST

Prospective Investor ____________________ Copy # ____________________

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

HIGH-YIELD BOND PORTFOLIO

February 29, 2000

INVESTMENT ADVISER

FEDERATED INVESTMENT MANAGEMENT COMPANY

PLACEMENT AGENT

FEDERATED SECURITIES CORP.

FEDERATED INVESTORS TOWER
1001 LIBERTY AVENUE
PITTSBURGH, PA 15222

DO NOT COPY OR CIRCULATE

FEDERATED CORE TRUST

HIGH-YIELD BOND PORTFOLIO

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

February 29, 2000

A Confidential Statement of Additional Information ("SAI") with respect to
High-Yield Bond Portfolio (the "Portfolio") with the same date has been filed
with the Securities and Exchange Commission (the "SEC"), and is incorporated
herein by reference. A copy of the SAI is available without charge by calling
the Portfolio's placement agent at 1-800-341-7400.

Shares of the Portfolio are not deposits or obligations of any bank, are not
endorsed or guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.

The securities described herein are offered pursuant to an exemption from the
registration requirements of the Securities Act of 1933 (the "1933 Act"), as
amended, and have not been registered with or approved or disapproved by the SEC
or any other regulatory authority of any jurisdiction, nor has the SEC passed
upon the accuracy or adequacy of this Memorandum. Any representation to the
contrary is a criminal offense.

Shares of the Portfolio are being offered for investment only to investment
companies, insurance company separate accounts, common or commingled trust funds
or similar organizations or entities that are "accredited investors" within the
meaning of Regulation D of the 1933 Act.

Investors will be required to represent that they meet certain financial
requirements and that they are familiar with and understand the terms, risks and
merits of an investment in the Portfolio.

No resale of shares may be made unless the shares are subsequently registered
under the Securities Act or an exemption from such registration is available.

This Confidential Private Offering Memorandum has been prepared on a
confidential basis solely for the information of the recipient and may not be
reproduced, provided to others or used for any other purpose.

No person has been authorized to make representations or give any information
with respect to the shares, except the information contained herein or in the
Trust's registration statement filed under the Investment Company Act of 1940.

HIGH-YIELD BOND PORTFOLIO

A Portfolio of Federated Core Trust

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

PART A

(INFORMATION REQUIRED IN A PROSPECTUS)

FEBRUARY 29, 2000

Please read this Confidential Private Offering Memorandum carefully before
investing and retain it for future reference. It contains important information
about the Portfolio that investors should know before investing.

A copy of a Subscription Agreement and Investor Questionnaire for use in
subscribing to purchase shares of the Portfolio accompanies delivery of this
Memorandum. In order to purchase shares of the Portfolio, a prospective investor
must satisfactorily complete, execute and deliver the Subscription Agreement and
Investor Questionnaire to the Portfolio's Placement Agent.

Items 1,2 3, 5 and 9 of Part A are omitted pursuant to Item B(2)(b)of the
General Instructions to Form N-1A.

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE

The investment objective of the Portfolio is to seek high current income. While
there is no assurance that the Portfolio will achieve its investment objective,
it endeavors to do so by following the strategies and policies described in this
offering memorandum.

INVESTMENT STRATEGY

The Portfolio provides exposure to the high-yield, lower-rated corporate bond
market. At least 65 percent of the Portfolio's assets are invested in corporate
bonds rated BBB or lower. The Adviser actively manages the Portfolio seeking to
realize the potentially higher returns of high-yield bonds (also known as "junk
bonds") compared to returns of high-grade securities by seeking to minimize
default risk and other risks through careful security selection and
diversification.

The Adviser selects securities seeking high yields, low relative credit risk,
and high portfolio diversification. If the issuer of a bond is unable to make
all coupon and principal payments as promised, realized yields will be less than
promised. The securities in which the Portfolio invests have high yields
primarily because of the market's greater uncertainty about the issuer's ability
to make all required interest and principal payments, and therefore about the
returns that will be in fact be realized by the Portfolio.

The Adviser attempts to select bonds for investment by the Portfolio which offer
superior potential returns for the default risks being assumed. The Adviser's
securities selection process consists of a credit-intensive, fundamental
analysis of the issuing firm. The Adviser's analysis focuses on the financial
condition of the issuing firm, together with the issuer's business and product
strength, competitive position, and management expertise. Further, the Adviser
considers current economic, financial market, and industry factors, which may
affect the issuer.

The Adviser attempts to minimize the Portfolio's credit risk through
diversification. The Adviser selects securities to maintain broad portfolio
diversification both by company and industry.

SECURITIES AND TECHNIQUES

FIXED INCOME SECURITIES

The Portfolio invests primarily in lower-rated corporate fixed income
securities. Corporate fixed income securities are debt securities issued by U.S.
or foreign businesses. Notes, bonds, debentures and commercial paper are the
most prevalent types of corporate debt securities. The Portfolio may also
purchase interests in bank loans to companies.

The Portfolio treats preferred stock which is redeemable by the issuer as a
fixed income security. Preferred stocks have the right to receive specified
dividends or distributions before the issuer makes payments on its common stock.
Some preferred stock also participates in dividends and distributions paid on
common stock.

The Portfolio may invest in fixed income securities of issuers based outside the
U.S. The securities of foreign issuers in which the Portfolio invests are
primarily traded in the U.S. and are predominantly denominated in U.S. dollars.

A security's yield to maturity will increase or decrease depending upon whether
it costs less (a discount) or more (a premium) than the principal amount.

The credit risks of corporate debt securities vary widely among issuers. In
addition, the credit risk of an issuer's debt securities may vary based on their
priority for repayment. For example, higher-ranking (senior) securities have a
higher priority than lower ranking (subordinated) securities. This means that
the issuer might not make payments on subordinated securities while continuing
to make payments on senior securities. Typically, both senior and subordinated
debt securities have a higher priority than redeemable preferred stock. Most of
the fixed income securities in which the Portfolio invests will be
uncollateralized and subordinated to other debt that a corporation has
outstanding.

Lower rated fixed income securities are securities rated below investment grade
(i.e., BB or lower) by a Nationally Recognized Rating Service. There is no
minimal acceptable rating for a security to be purchased or held by the
Portfolio and the Portfolio may purchase or hold unrated securities and
securities whose issuers are in default.

TEMPORARY DEFENSIVE INVESTMENTS

The Portfolio may temporarily depart from its principal investment strategies by
investing its assets in cash, cash items, and shorter-term, higher quality debt
securities and similar obligations. It may do this to minimize potential losses
and maintain liquidity to meet shareholder redemptions during adverse market
conditions. This may cause the Portfolio to give up greater investment returns
to maintain the safety of principal, that is, the original amount invested by
shareholders.

INVESTMENT RISKS

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Portfolio will lose money. The high yield bonds in which the Portfolio invests
have a higher default risk than investment grade securities. Low-grade bonds are
almost always uncollateralized and subordinated to other debt that a firm has
outstanding.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Portfolio must rely entirely upon the Adviser's credit assessment.

Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline relative to higher quality instruments.

LIQUIDITY RISKS

Trading opportunities are more limited for fixed income securities that have not
received any credit ratings, have received ratings below investment grade or are
not widely held. These features may make it more difficult to sell or buy a
security at a favorable price or time. Consequently, the Portfolio may have to
accept a lower price to sell a security, sell other securities to raise cash or
give up an investment opportunity, any of which could have a negative effect on
the Portfolio's performance. Infrequent trading of securities may also lead to
an increase in their price volatility.

BOND MARKET RISKS

Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices of
fixed income securities fall.

Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of a
fixed income security to changes in interest rates.

RISKS RELATED TO THE ECONOMY

Like equity securities, the prices of high-yield securities are affected by the
economy, which is keyed to current and anticipated developments in the U.S. and
global economy.

MANAGEMENT ORGANIZATION AND CAPITAL STRUCTURE

INVESTMENT ADVISER

A Board of Directors governs the Trust. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the
Portfolio's assets including buying and selling portfolio securities. The
Adviser's address is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
PA 15222-3779. The Adviser will not receive a fee for its investment advisory
services.

The Adviser and other subsidiaries of Federated advise more than 176 mutual
funds and private accounts, which total over $125 billion in assets as of
December 31, 1999. Federated was established in 1955 and is one of the largest
mutual fund investment managers in the United States with approximately 1,900
employees. Over 4,000 investment professionals make Federated Funds available to
their customers.

PORTFOLIO MANAGER

Mark E. Durbiano has been the Portfolio's portfolio manager since inception. He
is Vice President of the Trust. Mr. Durbiano joined Federated in 1982 and has
been a Senior Portfolio Manager and a Senior Vice President of the Portfolio's
Adviser since 1996. From 1988 through 1995, Mr. Durbiano was a Portfolio Manager
and a Vice President of the Portfolio's Adviser. Mr. Durbiano is a Chartered
Financial Analyst and received his M.B.A. in Finance from the University of
Pittsburgh.

SHAREHOLDER INFORMATION

Beneficial interests in the Portfolio are issued solely in private placement
transactions which do not involve any "public offering" within the meaning of
Section 4(2) of the Securities Act of 1933 (1933 Act). Investments in the
Portfolio may only be made by investment companies, insurance company separate
accounts, common or commingled trust funds or similar organizations or entities
that are "accredited investors" within the meaning of Regulation D of the 1933
Act. This Confidential Private Offering Memorandum does not constitute an offer
to sell, or the solicitation of an offer to buy, any "security" within the
meaning of the 1933 Act.

PRICING OF PORTFOLIO SHARES

The net asset value (NAV) of the Portfolio is determined as of the end of
regular trading (normally, 4:00 p.m., Eastern time) each day the NYSE is open.

The NAV per share of the Portfolio is computed by dividing the value of the
Portfolio's assets, less all liabilities, by the total number of shares
outstanding.

PURCHASE OF PORTFOLIO SHARES

Shares of the Portfolio may be purchased any day the New York Stock Exchange
(NYSE) is open.

Purchases should be made in accordance with procedures established by the
Transfer Agent.

Purchase orders for Shares of the Portfolio will receive the NAV next determined
after the purchase order is received in proper form by the Portfolio's Transfer
Agent, Federated Shareholder Services Company.

Payment by federal funds must be received by the Trust's custodian, State Street
Bank and Trust Company, by 3:00 p.m. (Eastern time) the next business day
following the receipt of the purchase order.

There is no minimum required initial or subsequent investment amount.

The Portfolio reserves the right to cease accepting investments in the Portfolio
at any time or to reject any investment order.

REDEMPTION OF PORTFOLIO SHARES

Shares of the Portfolio may be redeemed any day the NYSE is open.

Redemption requests should be made in accordance with procedures established by
the Transfer Agent.

Redemption requests will receive the NAV next determined after the request is
received in proper form by the Transfer Agent.

Redemption proceeds will normally be delivered within one business day after a
request is received in proper form. Payment may be delayed up to seven days:

o to allow a purchase order to clear;
o during periods of market volatility; or
o when a shareholder's trade activity or amount adversely impacts the
Portfolio's ability to manage its assets.

REDEMPTION IN KIND

Although the Portfolio intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Portfolio's portfolio securities.

CONFIRMATIONS AND ACCOUNT STATEMENTS

Shareholders will receive confirmation of purchases and redemptions. In
addition, shareholders will receive periodic statements reporting all account
activity including dividends paid. The Trust will not issue share certificates.

DIVIDENDS AND DISTRIBUTIONS

The Portfolio declares dividends daily and pays them monthly to shareholders.
Purchases made by wire begin earning dividends on the day the wire is received.
Purchases made by check begin earning dividends on the business day after the
Portfolio receives the check. In either case, dividends are earned through the
day a redemption request is received.

Dividends will be automatically reinvested in additional Shares unless the
shareholder has elected cash payments.

TAX CONSEQUENCES

Portfolio distributions are taxable to the shareholder whether paid in cash or
reinvested in the Portfolio. Dividends are taxable as ordinary income; capital
gains are taxable at different rates depending upon the length of time the
Portfolio holds its assets.

Portfolio distributions are expected to be both dividends and capital gains.
Redemptions are taxable sales.

DISTRIBUTION ARRANGEMENTS

Federated Securities Corp., is the Trust's Placement Agent. It receives no fee
for its services.

HIGH-YIELD BOND PORTFOLIO

A Portfolio of Federated Core Trust

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

PART B

(INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION)

FEBRUARY 29, 2000

This Part B is not a prospectus. Read this Part B in conjunction with the Part A
for High-Yield Bond Portfolio dated February 29, 2000. Obtain Part A without
charge by calling 1-800-341-7400.

TABLE OF CONTENTS

Portfolio History 1

Investments, Techniques, Risks and Limitations 2

Management of the Trust 7

Investment Advisory and Other Services 10

Brokerage Allocation and Other Practices 11

Capital Stock and Other Securities 12

Shareholder Information 12

Taxation of the Portfolio 13

Financial Statements 13

Appendix 14

Addresses 16

PORTFOLIO HISTORY

The Portfolio is a diversified portfolio of Federated Core Trust (the Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on August 21, 1996. The
Trust may offer separate series of shares of beneficial interest representing
interests in separate portfolios of securities.

INVESTMENTS, TECHNIQUES, RISKS AND LIMITATIONS

SECURITIES IN WHICH THE PORTFOLIO INVESTS

Following is a table that indicates which types of securities are a:
o P= PRINCIPAL investment of the Portfolio; (shaded in chart)
o A= ACCEPTABLE (but not principal) investment of the Portfolio
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SECURITIES HIGH-YIELD
BOND

PORTFOLIO

- -----------------------------------------------------------
- -----------------------------------------------------------
FIXED INCOME SECURITIES P

- -----------------------------------------------
- -----------------------------------------------------------
CORPORATE DEBT SECURITIES P

- -----------------------------------------------
- -----------------------------------------------------------
ZERO COUPON SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
TREASURY SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
AGENCY SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
ASSET BACKED SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
COMMERCIAL PAPER A
- -----------------------------------------------------------
- -----------------------------------------------------------
EQUITY SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
COMMON STOCK A
- -----------------------------------------------
- -----------------------------------------------------------
PREFERRED STOCK P

- -----------------------------------------------------------
- -----------------------------------------------------------
INTERESTS IN OTHER LIMITED LIABILITY A
COMPANIES

- -----------------------------------------------------------
- -----------------------------------------------------------
REIT'S A
- -----------------------------------------------------------
- -----------------------------------------------------------
WARRANTS A
- -----------------------------------------------------------
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FOREIGN SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
DEPOSITARY RECEIPTS A
- -----------------------------------------------------------
- -----------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
CONVERTIBLE SECURITIES A
- -----------------------------------------------------------
- -----------------------------------------------------------
SPECIAL TRANSACTIONS A
- -----------------------------------------------------------
REPURCHASE AGREEMENTS A
- -----------------------------------------------------------
- -----------------------------------------------
REVERSE REPURCHASE AGREEMENTS A
- -----------------------------------------------
- -----------------------------------------------------------
WHEN ISSUED TRANSACTIONS A
- -----------------------------------------------------------
- -----------------------------------------------------------
SECURITIES LENDING A
- -----------------------------------------------
- -----------------------------------------------------------
ASSET COVERAGE A
- -----------------------------------------------------------

SECURITIES DESCRIPTIONS AND TECHNIQUES

In addition to the principal securities listed in Part A, the Portfolio may also
invest in the following:

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.

CORPORATE DEBT SECURITIES

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Portfolio may also purchase interests in bank
loans to companies. The credit risks of corporate debt securities vary widely
among issuers.

In addition, the credit risk of an issuer's debt security may vary based on
its priority for repayment. For example, higher ranking (senior) debt
securities have a higher priority than lower ranking (subordinated)
securities. This means that the issuer might not make payments on
subordinated securities while continuing to make payments on senior
securities. In addition, in the event of bankruptcy, holders of senior
securities may receive amounts otherwise payable to the holders of
subordinated securities. Some subordinated securities, such as trust
preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer
any payment that would reduce its capital below regulatory requirements.

ZERO COUPON SECURITIES are discount securities which pay interest or
principal only at final maturity, unlike debt securities that provide
periodic payments of interest (referred to as a coupon payment). A zero
coupon step-up security converts to a coupon security before final maturity.
The difference between the purchase price and amount paid at maturity
represents interest on the zero coupon security.

TREASURY SECURITIES are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest
credit risk.

AGENCY SECURITIES are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). Some
GSEs are supported by the full, faith and credit of the United States. Other
GSEs receive support through federal subsidies, loans or other benefits. A
few GSEs have no explicit financial support, but are regarded as having
implied support because the federal government sponsors their activities.
Investors regard agency securities as having low credit risk, but not as low
as Treasury securities.

The Portfolio treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risk, it does
not reduce the market and prepayment risks of these mortgage backed
securities.

ASSET BACKED SECURITIES are payable from pools of obligations other than
mortgages. Almost any type of fixed income assets (including other fixed
income securities) may be used to create an asset backed security. However,
most asset backed securities involve consumer or commercial debts with
maturities of less than ten years. Asset backed securities may take the form
of commercial paper or notes, in addition to pass through certificates. Asset
backed securities may also resemble some types of CMOs, such as Floaters,
Inverse Floaters, IOs and POs.

Historically, borrowers are more likely to refinance their mortgage than any
other type of consumer debt or short term commercial debt. In addition, some
asset backed securities use prepayments to buy addition assets, rather than
paying off the securities. Therefore, although asset backed securities may
have some prepayment risks, they generally do not present the same degree of
risk as mortgage backed securities.

COMMERCIAL PAPER is an issuer's draft or note with a maturity of less than
nine months. Companies typically issue commercial paper to Portfolio current
expenditures. Most issuers constantly reissue their commercial paper and use
the proceeds (or bank loans) to repay maturing paper. Commercial paper may
default if the issuer cannot continue to obtain liquidity in this fashion.
The short maturity of commercial paper reduces both the market and credit
risk as compared to other debt securities of the same issuer.

EQUITY SECURITIES

Equity securities represent a share of the issuer's earnings and assets, after
the issuer pays its liabilities. Generally, issuers have discretion as to the
payment of any dividends or distributions. As a result, investors cannot predict
the income they will receive from equity securities. However, equity securities
offer greater potential for appreciation than many other types of securities,
because their value increases directly with the value of the issuer's business.
The following describes the types of equity securities in which the Portfolio
invests.

COMMON STOCKS are the most prevalent type of equity security. Common
stockholders receive the residual value of the issuer's earnings and assets
after the issuer pays its creditors and any preferred stockholders. As a
result, changes in an issuer's earnings directly influence the value of its
common stock.

INTERESTS IN OTHER LIMITED LIABILITY COMPANIES. Corporations typically issue
stocks. Other types of entities may issue securities comparable to common or
preferred stocks. These entities include limited partnerships, limited
liability companies, business trusts and companies organized outside the
United States.

REITS are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax if
they limit their operations and distribute most of their income. Such tax
requirements limit a REIT's ability to respond to changes in the commercial
real estate market.

WARRANTS give the Portfolio the option to buy the issuer's stock or other
equity securities at a specified price. The Portfolio may buy the designated
shares by paying the exercise price before the warrant expires. Warrants may
become worthless if the price of the stock does not rise above the exercise
price by the expiration date.

RIGHTS are the same as warrants, except they are typically issued to existing
stockholders.

FOREIGN SECURITIES

Foreign Securities are securities of issuers based outside the U.S. The
Portfolio invests in foreign securities which are traded in the U.S. and are
denominated in U.S. dollars. In addition to the risks normally associated with
U.S. securities of the same type, Foreign Securities are subject to Risks of
Foreign Investing.

DEPOSITARY RECEIPTS represent interests in underlying securities issued by a
foreign company, but traded in another market than the underlying security.
The foreign securities underlying American Depositary Receipts (ADRs) are
traded in the U.S. ADRs provide a way to buy shares of foreign-based
companies in the U.S. rather than in overseas markets. ADRs are also traded
in U.S. dollars, eliminating the need for foreign exchange transactions. The
foreign securities underlying European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs), and International Depositary Receipts (IDRs), are
traded globally or outside the U.S. Depositary Receipts involve many of the
same risks of investing directly in foreign securities.

FOREIGN GOVERNMENT SECURITIES generally consist of fixed income securities
supported by national, state or provincial governments or similar political
subdivisions. Foreign government securities also include debt obligations of
supranational entities, such as international organizations designed or
supported by governmental entities to promote economic reconstruction or
development, international banking institutions and related government
agencies. Examples of these include, but are not limited to, the
International Bank for Reconstruction and Development (the World Bank), the
Asian Development Bank, the European Investment Bank and the Inter-American
Development Bank.

Foreign government securities also include fixed income securities of
"quasi-governmental agencies" which are either issued by entities that are
owned by a national, state or equivalent government or are obligations of a
political unit that are not backed by the national government's full faith
and credit and general taxing powers. Further, foreign government securities
include mortgage-related securities issued or guaranteed by national, state
or provincial governmental instrumentalities, including quasi-governmental
agencies.

CONVERTIBLE SECURITIES are fixed income securities that the Portfolio has the
option to exchange for equity securities at a specified conversion price. The
option allows the Portfolio to realize additional returns if the market price of
the equity securities exceeds the conversion price. For example, the Portfolio
may hold fixed income securities that are convertible into shares of common
stock at a conversion price of $10 per share. If the market value of the shares
of common stock reached $12, the Portfolio could realize an additional $2 per
share by converting its fixed income securities.

Convertible securities have lower yields than comparable fixed income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit the
Portfolio to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.

The Portfolio treats convertible securities as fixed income securities for
purposes of its investment policies and limitations.

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS are transactions in which a Portfolio buys a security
from a dealer or bank and agrees to sell the security back at a mutually
agreed upon time and price. The repurchase price exceeds the sale price,
reflecting an agreed upon interest rate effective for the period the
Portfolio owns the security subject to repurchase. The agreed upon interest
rate is unrelated to the interest rate on the underlying security. The
Portfolio will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Adviser to be creditworthy

The Portfolio's custodian or subcustodian is required to take possession of
the securities subject to repurchase agreements.. The Adviser or subcustodian
will monitor the value of the underlying security each day to ensure that the
value of the security always equals or exceeds the repurchase price.

Repurchase Agreements are subject to the Credit Risk that the original seller
will not repurchase the securities from the Portfolio, which could result in
the Portfolio receiving less than the purchase price on any sale of
securities.

REVERSE REPURCHASE AGREEMENTS are repurchase agreements in which the
Portfolio is the seller (rather than the buyer) of the securities, and agrees
to repurchase them at an agreed upon time and price. A reverse repurchase
agreement may be viewed as a type of borrowing by the Portfolio. Reverse
Repurchase Agreements are subject to Credit Risk. In addition, Reverse
Repurchase Agreements create Leverage Risk because the Portfolio must
repurchase the underlying security at a higher price, regardless of the
market value of the security at the time of repurchase.

WHEN ISSUED TRANSACTIONS are arrangements in which the Portfolio purchases
securities for a set price, with payment and delivery scheduled for a future
time. During the period between purchase and settlement, no payment is made
by the Portfolio to the issuer and no interest accrues to the Portfolio. The
Portfolio records the transaction when it agrees to purchase the securities
and reflects their value in determining the price of its shares. Settlement
dates may be a month or more after entering into these transactions, and the
market values of the securities purchased may vary from the purchase prices.
Therefore, when issued transactions create Market Risk for the Portfolio.
When issued transactions also involve Credit Risk in the event of a
counterparty default.

SECURITIES LENDING. The Portfolio may lend portfolio securities to firms that
the Adviser has determined are creditworthy. In return, it will receive
either cash or liquid securities as collateral from the borrower. The
Portfolio will reinvest cash collateral in securities that qualify as an
otherwise acceptable investment for the Portfolio. However, the Portfolio
must pay interest to the borrower for the use of any cash collateral. If the
market value of the loaned securities increases, the borrower must furnish
additional collateral. While portfolio securities are on loan, the borrower
pays the Portfolio the equivalent of any dividends or interest received on
them. Loans are subject to termination at the option of the Portfolio or the
borrower. The Portfolio will not have the right to vote on securities while
they are being lent, but it will terminate a loan in anticipation of any
important vote. The Portfolio may pay reasonable administrative and custodial
fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash collateral to a securities lending agent or
broker.

Securities lending activities are subject to Market Risk and Credit Risk.

INTER-FUND BORROWING AND LENDING ARRANGEMENTS

The SEC has granted an exemption that permits the Fund and all other funds
advised by subsidiaries of Federated Investors, Inc. ("Federated funds") to
lend and borrow money for certain temporary purposes directly to and from
other Federated funds. Participation in this inter-fund lending program is
voluntary for both borrowing and lending funds, and an inter-fund loan is
only made if it benefits each participating fund. Federated administers the
program according to procedures approved by the Fund's Board, and the Board
monitors the operation of the program. Any inter-fund loan must comply with
certain conditions set out in the exemption, which are designed to assure
fairness and protect all participating funds.

For example, inter-fund lending is permitted only (a) to meet shareholder
redemption requests, and (b) to meet commitments arising from "failed"
trades. All inter-fund loans must be repaid in seven days or less. The Fund's
participation in this program must be consistent with its investment policies
and limitations, and must meet certain percentage tests. Inter-fund loans may
be made only when the rate of interest to be charged is more attractive to
the lending fund than market-competitive rates on overnight repurchase
agreements (the "Repo Rate") and more attractive to the borrowing fund than
the rate of interest that would be charged by an unaffiliated bank for
short-term borrowings (the "Bank Loan Rate"), as determined by the Board. The
interest rate imposed on inter-fund loans is the average of the Repo Rate and
the Bank Loan Rate.

ASSET COVERAGE. In order to secure its obligations in connection with
when-issued, and delayed-delivery transactions, the Portfolio will "cover"
such transactions, as required under applicable interpretations of the SEC,
either by owning the underlying securities; entering into an offsetting
transaction; or segregating, earmarking, or depositing into an escrow account
readily marketable securities in an amount at all times equal to or exceeding
the Portfolio's commitment with respect to these instruments or contracts. As
a result, use of these instruments will impede the Portfolio's ability to
freely trade the assets being used to cover them, which could result in harm
to the Portfolio.

INVESTMENT RISKS

There are many factors which may effect an investment in the Portfolio. The
Portfolio's principal risks are described in Part A. Risk factors of the
acceptable investments listed above are as follows.

FIXED INCOME RISKS

CREDIT RISK

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Portfolio will lose money.

RISKS OF FOREIGN INVESTING

Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.

Foreign companies may not provide information (including financial statements)
as frequently or to as great an extent as companies in the United States.
Foreign companies may also receive less coverage than United States companies by
market analysts and the financial press. In addition, foreign countries may lack
uniform accounting, auditing and financial reporting standards or regulatory
requirements comparable to those applicable to U.S. companies. These factors may
prevent the Portfolio and its Adviser from obtaining information concerning
foreign companies that is as frequent, extensive and reliable as the information
available concerning companies in the United States.

Foreign countries may have restrictions on foreign ownership of securities or
may impose exchange controls, capital flow restrictions or repatriation
restrictions which could adversely affect the liquidity of the Portfolio's
investments.

LEVERAGE RISKS

Leverage risk is created when an investment exposes the Portfolio to a level of
risk that exceeds the amount invested. Changes in the value of the investment
magnify the Portfolio's risk of loss and potential gain.

BOND MARKET RISKS

Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices of
fixed income securities fall.

EQUITY RISKS

STOCK MARKET RISKS

The value of equity securities in the Portfolio's portfolio will go up and down.
These fluctuations could be a sustained trend or a drastic movement. The
Portfolio's portfolio will reflect changes in prices of individual portfolio
stocks or general changes in stock valuations. Consequently, the Portfolio's
share price may decline and you could lose money.

INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN

The Portfolio will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for clearance
of purchases and sales of portfolio securities.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Portfolio will not issue senior securities except that the Portfolio may
borrow money directly or through reverse repurchase agreements as a temporary,
extraordinary, or emergency measure to facilitate management of the portfolio by
enabling the Portfolio to meet redemption requests when the liquidation of
portfolio securities is deemed to be inconvenient or disadvantageous, and then
only in amounts not in excess of one-third of the value of its total assets;
provided that, while borrowings and reverse repurchase agreements outstanding
exceed 5% of the Portfolio's total assets, any such borrowings will be repaid
before additional investments are made. The Portfolio will not borrow money or
engage in reverse repurchase agreements for investment leverage purposes.

PLEDGING ASSETS

The Portfolio will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge or
hypothecate assets having a market value not exceeding the lesser of the dollar
amounts borrowed or 15% of the value of its total assets at the time of
borrowing.

CONCENTRATION OF INVESTMENTS

The Portfolio will not purchase securities if, as a result of such purchase, 25%
or more of its total assets would be invested in any one industry. However, the
Portfolio may at any time invest 25% or more of its assets in cash or cash items
and securities issued and/or guaranteed by the U.S. government, its agencies or
instrumentalities.

INVESTING IN COMMODITIES

The Portfolio will not purchase or sell commodities, commodity contracts, or
commodity futures contracts.

INVESTING IN REAL ESTATE

The Portfolio will not purchase or sell real estate, although it may invest in
securities of companies whose business involves the purchase or sale of real
estate or in securities secured by real estate or interests in real estate.

LENDING CASH OR SECURITIES

The Portfolio will not lend any of its assets, except portfolio securities up to
one-third of its total assets. This shall not prevent the Portfolio from
purchasing or holding corporate or U.S. government bonds, debentures, notes,
certificates of indebtedness or other debt securities of an issuer, entering
into repurchase agreements, or engaging in other transactions which are
permitted by the Portfolio's investment objective and policies or the Trust's
Declaration of Trust.

UNDERWRITING

The Portfolio will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection with
the sale of securities in accordance with its investment objective, policies,
and limitations.

DIVERSIFICATION OF INVESTMENTS

With respect to 75% of its total assets, the Portfolio will not purchase the
securities of any one issuer (other than cash, cash items, or securities issued
and/or guaranteed by the U.S. government, its agencies or instrumentalities, and
repurchase agreements collateralized by such securities) if, as a result, more
than 5% of its total assets would be invested in the securities of that issuer.
Also, the Portfolio will not purchase more than 10% of any class of the
outstanding voting securities of any one issuer. For these purposes, the
Portfolio considers common stock and all preferred stock of an issuer each as a
single class, regardless of priorities, series, designations, or other
differences.

The above limitations cannot be changed unless authorized by the Board and by
the "vote of a majority of its outstanding voting securities," as defined by the
Investment Company Act of 1940 (1940 Act). The following limitations, however,
may be changed by the Trustees without shareholder approval. Shareholders will
be notified before any material change in these limitations becomes effective.

RESTRICTED AND ILLIQUID SECURITIES

The Portfolio will not invest more than 15% of its total assets in illiquid
securities, including repurchase agreements providing for settlement in more
than seven days after notice and certain restricted securities not determined by
the Trustees to be liquid.

Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value of total or net assets will not result in a violation
of such restriction.

MANAGEMENT OF THE TRUST

BOARD OF TRUSTEES, MANAGEMENT INFORMATION, COMPENSATION

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and other notable positions held,
total compensation received as a Trustee from the Trust for its most recent
fiscal year, and the total compensation received from the Federated Fund Complex
for the most recent calendar year. The Trust is comprised of two portfolios and
the Federated Fund Complex is comprised of 43 investment companies, whose
investment advisers are affiliated with the Portfolio's Adviser.

NAME TOTAL
BIRTHDATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST 5 YEARS FROM TRUST AND FUND

COMPLEX

JOHN F. DONAHUE*+# Chief Executive Officer and Director $0 $0 for the
Birthdate: July 28, or Trustee of the Federated Fund Trust and 43
1924 Complex; Chairman and Director, other
Federated Investors Federated Investors, Inc.; Chairman, investment
Tower Federated Investment Management companies in
1001 Liberty Avenue Company, Federated Global Investment the Fund
Pittsburgh, PA Management Corp. and Passport Complex
CHAIRMAN AND TRUSTEE Research, Ltd.; formerly: Trustee,
Federated Investment Management

Company and Chairman and Director,
Federated Investment Counseling.
THOMAS G. BIGLEY Director or Trustee of the Federated $1,367.67 $116,760.63
Birthdate: February Fund Complex; Director, Member of for the
3, 1934 Executive Committee, Children's Trust/ and
15 Old Timber Trail Hospital of Pittsburgh; Director, 43 other
Pittsburgh, PA Robroy Industries, Inc. (coated investment
TRUSTEE steel conduits/computer storage companies in
equipment); formerly: Senior the Fund
Partner, Ernst & Young LLP; Complex
Director, MED 3000 Group, Inc.
(physician practice management);
Director, Member of Executive

Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated $1,285.75 $128,455.37
Birth Date: June 23, Fund Complex; President, Investment for the
1937 Properties Corporation; Senior Vice Trust and 43
Grubb & President, John R. Wood and other
Ellis/Investment Associates, Inc., Realtors; Partner investment
Properties or Trustee in private real estate companies in
Corporation ventures in Southwest Florida; the Fund
3201 Tamiami Trail formerly: President, Naples Property Complex
North Management, Inc. and Northgate
Naples, FL Village Development Corporation.
TRUSTEE

NICHOLAS P. Director or Trustee of the Federated $1,367.67 $73,191.21
CONSTANTAKIS Fund Complex; Director, Michael for the
Birth Date: Baker Corporation (engineering, Trust and 37
September 3, 1939 construction, operations and other
175 Woodshire Drive technical services); formerly: investment
Pittsburgh, PA Partner, Andersen Worldwide SC. companies in
TRUSTEE the Fund
Complex

JOHN F. CUNNINGHAM Director or Trustee of some of the $1,367.67 $93,190.48
Birthdate: March 5, Federated Fund Complex; Chairman, for the
1943 President and Chief Executive Trust and 37
353 El Brillo Way Officer, Cunningham & Co., Inc. other
Palm Beach, FL (strategic business consulting); investment
TRUSTEE Trustee Associate, Boston College; companies in
Director, Iperia Corp. the Fund
(communications/software); formerly: Complex
Director, Redgate Communications and
EMC Corporation (computer storage
systems).

Previous Positions: Chairman of the

Board and Chief Executive Officer,

Computer Consoles, Inc.; President

and Chief Operating Officer, Wang

Laboratories; Director, First

National Bank of Boston; Director,
Apollo Computer, Inc.

LAWRENCE D. ELLIS, Director or Trustee of the Federated $1,367.67 $116,760.63
M.D.* Fund Complex; Professor of Medicine, for the
Birth Date: October University of Pittsburgh; Medical Trust and 43
11, 1932 Director, University of Pittsburgh other
3471 Fifth Avenue Medical Center - Downtown; investment
Suite 1111 Hematologist, Oncologist, and companies in
Pittsburgh, PA Internist, University of Pittsburgh the Fund
TRUSTEE Medical Center; Member, National Complex
Board of Trustees, Leukemia Society
of America.

PETER E. MADDEN Director or Trustee of the Federated $1,285.75 $109,153.60
Birth Date: March Fund Complex; formerly: for the
16, 1942 Representative, Commonwealth of Trust and 43
One Royal Palm Way Massachusetts General Court; other
100 Royal Palm Way President, State Street Bank and investment
Palm Beach, FL Trust Company and State Street companies in
TRUSTEE Corporation. the Fund
Complex

Previous Positions: Director, VISA

USA and VISA International; Chairman

and Director, Massachusetts Bankers

Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.

CHARLES F. Director or Trustee of some of the $1,439.36 $102,153.60
MANSFIELD, JR. Federated Fund Complex; Executive for the
Birth Date: April Vice President, Legal and External Trust and 43
10, 1945 Affairs, Dugan Valva Contess, Inc. other
80 South Road (marketing, communications, investment
Westhampton Beach, technology and consulting).; companies in
NY TRUSTEE formerly Management Consultant. the Fund
Complex

Previous Positions: Chief Executive Officer, PBTC
International Bank; Partner, Arthur Young & Company (now
Ernst & Young LLP); Chief Financial Officer of Retail
Banking Sector, Chase Manhattan Bank; Senior Vice
President, Marine Midland Bank; Vice President,
Citibank; Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra University.

JOHN E. MURRAY, JR., Director or Trustee of the Federated $1,285.75 $128,455.37
J.D., S.J.D.# Fund Complex; President, Law for the
Birth Date: December Professor, Duquesne University; Trust and 43
20, 1932 Consulting Partner, Mollica & other
President, Duquesne Murray; Director, Michael Baker investment
University Corp. (engineering, construction, companies in
Pittsburgh, PA operations and technical services). the Fund
TRUSTEE Complex
Previous Positions: Dean and

Professor of Law, University of

Pittsburgh School of Law; Dean and

Professor of Law, Villanova
University School of Law.
MARJORIE P. SMUTS Director or Trustee of the Federated $1,367.67 $116,760.63
Birthdate: June 21, Fund Complex; Public for the
1935 Relations/Marketing/Conference Trust and 43
4905 Bayard Street Planning. other
Pittsburgh, PA investment
TRUSTEE Previous Positions: National companies in
Spokesperson, Aluminum Company of the Fund America;
television producer; Complex business owner.

JOHN S. WALSH Director or Trustee of some of the $1,367.67 $94,536.85
Birthdate: November Federated Fund Complex; President for the
28, 1957 and Director, Heat Wagon, Inc. Trust and
2007 Sherwood Drive (manufacturer of construction 39 other
Valparaiso, IN temporary heaters); President and investment
TRUSTEE Director, Manufacturers Products, companies in
Inc. (distributor of portable the Fund
construction heaters); President, Complex
Portable Heater Parts, a division of

Manufacturers Products, Inc.;
Director, Walsh & Kelly, Inc. (heavy

highway contractor); formerly: Vice
President, Walsh & Kelly, Inc.

J. CHRISTOPHER President or Executive Vice $0 $0 for the
DONAHUE+ President of the Federated Fund Trust and
Birthdate: April 11, Complex; Director or Trustee of some 30 other
1949 of the Funds in the Federated Fund investment
Federated Investors Complex; President, Chief Executive companies in
Tower Officer and Director, Federated the Fund
1001 Liberty Avenue Investors, Inc.; President, Chief Complex
Pittsburgh, PA Executive Officer and Trustee,
PRESIDENT Federated Investment Management
Company; Trustee, Federated
Investment Counseling; President,
Chief Executive Officer and
Director, Federated Global
Investment Management Corp.;
President and Chief Executive
Officer, Passport Research, Ltd.;
Trustee, Federated Shareholder
Services Company; Director,
Federated Services Company;
formerly: President, Federated
Investment Counseling.

EDWARD C. GONZALES President, Executive Vice President $0 $0 for the
Birthdate: October and Treasurer of some of the Funds Trust and
22, 1930 in the Federated Fund Complex; Vice 42 other
Federated Investors Chairman, Federated Investors, Inc.; investment
Tower Trustee, Federated Administrative companies
1001 Liberty Avenue Services; formerly, Trustee or in the Fund
Pittsburgh, PA Director of some of the Funds in the Complex
EXECUTIVE VICE Federated Fund Complex; Vice
PRESIDENT President, Federated Financial
Services, Inc., CEO and Chairman,
Federated Administrative Services;
Director, Vice President and
Treasurer, Federated Investors
Management Company; Federated
Investment Management Company,
Federated Investment Counseling,
Federated Global Investment
Management Corp. and Passport
Research, Ltd.; Director and
Executive Vice President, Federated
Securities Corp.; Director,
Federated Services Company; Trustee,
Federated Shareholder Services
Company.
JOHN W. MCGONIGLE Executive Vice President and $0 $0 for the
Birthdate: October Secretary of the Federated Fund Trust and
26, 1938 Complex; Executive Vice President, 43 other
Federated Investors Secretary and Director, Federated investment
Tower Investors, Inc.; Trustee, Federated companies in
1001 Liberty Avenue Investment Management Company and the Fund
Pittsburgh, PA Federated Investment Counseling; Complex
EXECUTIVE VICE Director, Federated Global
PRESIDENT AND Investment Management Corp,
SECRETARY Federated Services Company and
Federated Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated Fund $0 $0 for the
Birthdate: June 17, Complex; Vice President - Funds Trust and
1954 Financial Services Division, 43 other
Federated Investors Federated Investors, Inc.; Formerly: investment
Tower various management positions within companies in
1001 Liberty Avenue Funds Financial Services Division of the Fund
Pittsburgh, PA Federated Investors, Inc. Complex
TREASURER

RICHARD B. FISHER President or Vice President of some $0 $0 for the
Birthdate: May 17, of the Funds in the Federated Fund Trust and
1923 Complex; Vice Chairman, Federated 41 other
Federated Investors Investors, Inc.; Chairman, Federated investment
Tower Securities Corp.; formerly: Director companies in
1001 Liberty Avenue or Trustee of some of the Funds in the Fund
Pittsburgh, PA the Federated Fund Complex,; Complex
VICE PRESIDENT Executive Vice President, Federated
Investors, Inc. and Director and

Chief Executive Officer, Federated
Securities Corp.

MARK E. DURBIANO Mark E. Durbiano has been the $0 $0 for the
Birthdate: September Portfolio Manager of High Yield Bond Trust and
21, 1959 Portfolio since its inception. He 2 other
Federated Investors is a Vice President of the Trust. investment
Tower Mr. Durbiano joined Federated companies in
1001 Liberty Avenue Investors, Inc. in 1982 and has been the Fund
Pittsburgh, PA a Senior Portfolio Manager and a Complex
VICE PRESIDENT Senior Vice President of the
Portfolio's investment adviser since
1996. From 1998 through 1995, Mr.
Durbiano was a Portfolio Manager and
a Vice President of the Portfolio's
Adviser. Mr. Durbiano is a Chartered
Financial Analyst and received his
M.B.A. in Finance from the
University of Pittsburgh.
KATHLEEN M. Kathleen M. Foody-Malus has been the $0 $0 for the
FOODY-MALUS Portfolio Manager of Federated Trust and
Birth Date: March Mortgage Core Portfolio since its 2 other
26, 1960 inception. She is Vice President of investment
Federated Investors the Trust. Ms. Foody-Malus joined companies in
Tower Federated in 1983 and has been a the Fund
1001 Liberty Avenue Senior Portfolio Manager since 1996 Complex
Pittsburgh, PA and a Vice President of the Fund's
VICE PRESIDENT Adviser since 1993. She was a
Portfolio Manager and a Vice
President of the Fund's Adviser from
1993 to 1996. Ms. Foody-Malus
received her M.B.A. in
Accounting/Finance from the
University of Pittsburgh.
WILLIAM D. DAWSON, Chief Investment Officer of this $0 $0 for the
III Fund and various other Funds in the Trust and
Birth Date: March 3, Federated Fund Complex; Executive 27 other
1949 Vice President, Federated Investment investment
Federated Investors Counseling, Federated Global companies in
Tower Investment Management Corp., the Fund
1001 Liberty Avenue Federated Investment Management Complex
Pittsburgh, PA Company and Passport Research, Ltd.;
CHIEF INVESTMENT Registered Representative, Federated
OFFICER Securities Corp.; Portfolio Manager,
Federated Administrative Services;

Vice President, Federated Investors,

Inc.; formerly: Executive Vice

President and Senior Vice President, $0
Federated Investment Counseling

Institutional Portfolio Management

Services Division; Senior Vice $0 for the
THOMAS MADDEN President, Federated Investment Trust and
Birthdate: October Management Company and Passport 11 other
22, 1945 Research, Ltd. investment
Federated Investors companies in
Tower Chief Investment Officer of this the Fund
1001 Liberty Avenue Fund and various other Funds in the Complex
Pittsburgh, PA Federated Fund Complex; Executive
CHIEF INVESTMENT Vice President, Federated Investment
OFFICER Counseling, Federated Global
Research Corp., Federated Advisers,
Federated Management, Federated
Research, and Passport Research,
Ltd.; Vice President, Federated
Investors, Inc.; Formerly: Executive
Vice President and Senior Vice
President, Federated Investment
Counseling Institutional Portfolio
Management Services Division; Senior
Vice President, Federated Research
Corp., Federated Advisers, Federated
Management, Federated Research, and
Passport Research, Ltd.
</TABLE>

- --------------------------------------------------------------------------------
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the 1940 Act.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, President of the Trust.

As of February 1, 2000 the Portfolio's Board and Officers as a group owned less
than 1% of the Portfolio's outstanding Shares.

INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Portfolio. The Adviser is a wholly-owned subsidiary of Federated Investors, Inc.
(Federated).

The Adviser shall not be liable to the Trust or any Portfolio shareholder for
any losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.

The Adviser will provide investment advisory services at no fee.

PRINCIPAL UNDERWRITER

The Portfolio's placement agent is Federated Securities Corp., located at
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Portfolio. Federated Services Company
provides these services at the following annual rate of the average daily net
assets of all Federated Funds as specified below:

MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS OF THE

FEDERATED FUNDS

0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750
million

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Portfolio's portfolio investments for a fee based
on Portfolio assets plus out-of-pocket expenses.

Federated Services Company will voluntarily waive all or a portion of the
administrative fee paid by the Portfolio. Federated Services Company may
terminate this voluntary waiver at any time.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Portfolio.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Portfolio pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by shareholders.

INDEPENDENT AUDITOR

Ernst & Young LLP is the independent auditor for the Portfolio.

BROKERAGE ALLOCATION AND OTHER PRACTICES

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling Shares of the
Portfolio and other funds distributed by the Distributor and its affiliates. The
Adviser makes decisions on portfolio transactions and selects brokers and
dealers subject to review by the Portfolio's Board.

RESEARCH SERVICES

Research services may include advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services. Research
services may be used by the Adviser or by affiliates of Federated in advising
other accounts. To the extent that receipt of these services may replace
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise
reasonable business judgment in selecting those brokers who offer brokerage and
research services to execute securities transactions. They determine in good
faith that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided.

Investment decisions for the Portfolio are made independently from those of
other accounts managed by the Adviser. When the Portfolio and one or more of
those accounts invests in, or disposes of, the same security, available
investments or opportunities for sales will be allocated among the Portfolio and
the account(s) in a manner believed by the Adviser to be equitable. While the
coordination and ability to participate in volume transactions may benefit the
Portfolio, it is possible that this procedure could adversely impact the price
paid or received and/or the position obtained or disposed of by the Portfolio.

CAPITAL STOCK AND OTHER SECURITIES

CAPITAL STOCK

Holders of the Portfolio's shares of beneficial interest will have equal rights
to participate in distributions made by the Portfolio, equal rights to the
Portfolio's assets upon dissolution and equal voting rights; the Portfolio does
not allow cumulative voting. Investors will have no preemptive or other right to
subscribe to any additional shares of beneficial interest or other securities
issued by the Trust. Shares may be redeemed at any time at NAV with no charge.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.

In the unlikely event a shareholder is held personally liable for the Trust
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.

SHAREHOLDER INFORMATION

Beneficial interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act.

OFFERING PRICE

The Portfolio's net asset value (NAV) per Share fluctuates and is based on the
market value of all securities and other assets of the Portfolio.

Market values of the Portfolio's portfolio securities are determined as follows:

o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;

for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as determined
in good faith by the Board; and

for all other securities, at fair value as determined in good faith by the
Board.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities.

The Portfolio values futures contracts and options at their market values
established by the exchanges on which they are traded at the close of trading on
such exchanges. The Board may determine in good faith that another method of
valuing such investments is necessary to appraise their fair market value.

REDEMPTION IN KIND

Although the Portfolio intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Portfolio's portfolio securities.

Because the Portfolio has elected to be governed by Rule 18f-1 under the 1940
Act, the Portfolio is obligated to pay Share redemptions to any one shareholder
in cash only up to the lesser of $250,000 or 1% of the net assets represented by
such Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Portfolio's Board determines that payment should be in kind. In such
a case, the Portfolio will pay all or a portion of the remainder of the
redemption in portfolio securities, valued in the same way as the Portfolio
determines its NAV. The portfolio securities will be selected in a manner that
the Portfolio's Board deems fair and equitable and, to the extent available,
such securities will be readily marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

TAXATION OF THE PORTFOLIO

The Portfolio intends to meet requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies. If these requirements
are not met, it will not receive special tax treatment and will pay federal
income tax.

FINANCIAL STATEMENTS

Investors of record will receive annual reports audited by the Portfolio's
independent auditor and unaudited semi-annual reports.

APPENDIX

STANDARD & POOR'S LONG-TERM DEBT RATING DEFINITIONS

AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB--Debt rated BB has less near-term, vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB-rating.

B--Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.

CCC--Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B-rating.

CC--The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC debt rating.

C--The rating C typically is applied to debt subordinated to senior debt which
is assigned an actual or implied CCC-debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

MOODY'S INVESTORS SERVICE, INC. LONG-TERM BOND RATING DEFINITIONS AAA--Bonds
which are rated AAA are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as gilt edged.
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

AA--Bonds which are rated AA are judged to be of high quality by all standards.
Together with the AAA group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in AAA securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in AAA securities.

A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

BAA--Bonds which are rated BAA are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

BA--Bonds which are BA are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class. B--Bonds which are rated B generally lack characteristics
of the desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small. CAA--Bonds which are rated CAA are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest. CA--Bonds which are rated CA represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C--Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

FITCH IBCA, INC. LONG-TERM DEBT RATING DEFINITIONS

AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+.

A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB--Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

BB--Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.

B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue. CCC--Bonds have certain identifiable characteristics which,
if not remedied, may lead to default. The ability to meet obligations requires
an advantageous business and economic environment.

CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time. C--Bonds are imminent default in payment of
interest or principal.

ADDRESSES

HIGH-YIELD BOND PORTFOLIO

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

PLACEMENT AGENT
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue

Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT PUBLIC ACCOUNTANTS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

Cusip 31409N101
(2/00)

FEDERATED CORE TRUST

Prospective Investor ____________________ Copy # ____________________

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

FEDERATED MORTGAGE CORE PORTFOLIO

February 29, 2000

INVESTMENT ADVISER

FEDERATED INVESTMENT MANAGEMENT COMPANY

PLACEMENT AGENT

FEDERATED SECURITIES CORP.

FEDERATED INVESTORS TOWER
1001 LIBERTY AVENUE
PITTSBURGH, PA 15222

DO NOT COPY OR CIRCULATE

FEDERATED CORE TRUST

FEDERATED MORTGAGE CORE PORTFOLIO

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

February 29, 2000

A Confidential Statement of Additional Information ("SAI") with respect to
Federated Mortgage Core Portfolio (the "Portfolio") with the same date has been
filed with the Securities and Exchange Commission (the "SEC"), and is
incorporated herein by reference. A copy of the SAI is available without charge
by calling the Portfolio's placement agent at 1-800-341-7400.

Investors will be required to represent that they meet certain financial
requirements and that they are familiar with and understand the terms, risks and
merits of an investment in the Portfolio.

No resale of shares may be made unless the shares are subsequently registered
under the Securities Act or an exemption from such registration is available.

FEDERATED MORTGAGE CORE PORTFOLIO

A Portfolio of Federated Core Trust

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

PART A

(INFORMATION REQUIRED IN A PROSPECTUS)

FEBRUARY 29, 2000

Please read this Confidential Private offering Memorandum carefully before
investing and retain it for future reference. It contains important information
about the Portfolio that investors should know before investing.

A copy of a Subscription Agreement for use in subscribing to purchase shares of
the Portfolio accompanies delivery of this Memorandum. In order to purchase
shares of the Portfolio, a prospective investor must satisfactorily complete,
execute and deliver the Subscription Agreement to the Portfolio's Transfer
Agent.

Items 1,2 3, 5 and 9 of Part A are omitted pursuant to Item B(2)(b)of the
General Instructions to Form N-1A.

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE

The investment objective of the Portfolio is to provide total return. While
there is no assurance that the Portfolio will achieve its investment objective,
it endeavors to do so by following the strategies and policies described in this
offering memorandum.

INVESTMENT STRATEGY

The Portfolio pursues its investment objective by investing primarily in
mortgage backed securities, including collateralized mortgage obligations
(CMOs).

The Adviser manages the portfolio by targeting a dollar weighted average
duration relative to that of the Lehman Brothers Mortgage Backed Securities
Index. Duration measures the price sensitivity of a portfolio of fixed income
securities to changes in interest rates. The Adviser targets this range based
upon its interest rate outlook. The Adviser formulates its interest rate outlook
by analyzing a variety of factors, such as:

o current and expected U.S. economic growth,

o current and expected interest rates and inflation,

o the Federal Reserve Board's monetary policy, and

o changes in the supply of or demand for U.S. government securities.

The Adviser generally shortens the portfolio's average duration when it
expects interest rates to rise and extends the duration when it expects interest
rates to fall.

The Adviser selects securities used to lengthen or shorten the portfolio's
average duration by comparing the returns currently offered by different
investments to their historical and expected returns. In selecting mortgage
backed securities, including CMOs, the analysis also focuses on the expected
cash flows from the pool of mortgage obligations supporting the security. The
Adviser attempts to assess the relative returns and risks of these securities by
analyzing how the timing, amount and division of cash flows from the pool might
change in response to changing economic and market conditions. The Adviser may
use CMOs with more predictable cash flows (such as sequential pay, planned
amortization class and targeted amortization class) to improve the Portfolio's
performance in volatile markets. The Adviser may also use combinations of CMOs
or CMOs and pass-through certificates to provide a higher yielding investment
with market risks similar to a pass-through certificate or a Treasury security.
The combination may involve different mortgage pools. Unanticipated differences
in prepayment rates of the pools may reduce the return of the combined
investment. Combinations may also include CMOs (such as IOs, POs, and inverse
floaters) that have complex terms or less predictable cash flows.

In addition to buying mortgage backed securities outright, the Portfolio may
acquire securities on a "to be announced" basis in order to enhance yield. The
Portfolio engages in dollar roll transactions to increase income. The Portfolio
uses repurchase agreements to secure its obligations in these transactions.

SECURITIES AND TECHNIQUES

FIXED INCOME SECURITIES

The following describes the types of fixed income securities in which the
Portfolio principally invests:

AGENCY SECURITIES

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The
United States supports some GSEs with its full, faith and credit. Other GSEs
receive support through federal subsidies, loans or other benefits. A few
GSEs have no explicit financial support, but are regarded as having implied
support because the federal government sponsors their activities. Agency
securities are generally regarded as having low credit risks, but not as low
as treasury securities.

The Portfolio treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does
not reduce the MARKET AND PREPAYMENT RISKS of these mortgage backed
securities.

MORTGAGE BACKED SECURITIES

Mortgage backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates,
maturities and other terms. Mortgages may have fixed or adjustable interest
rates. Interests in pools of adjustable rate mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage backed securities are
pass-through certificates. An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer
deducts its fees and expenses and passes the balance of the payments onto the
certificate holders once a month. Holders of pass-through certificates
receive a pro rata share of all payments and pre-payments from the underlying
mortgages. As a result, the holders assume all the PREPAYMENT RISKS of the
underlying mortgages.

The Portfolio may invest in both agency mortgage backed securities and in
mortgage backed securities that are issued by a private entity. Securities
issued by private entities must be rated investment grade by one or more
nationally recognized rating services. The ability to invest in securities
issued by a private entity creates CREDIT RISK.

COLLATERALIZED MORTGAGE OBLIGATIONS

CMOs, including interests in real estate mortgage investment conduits
(REMICs), allocate payments and prepayments from an underlying
pass-through certificate among holders of different classes of mortgage
backed securities. This creates different PREPAYMENT AND MARKET RISKS for
each CMO class.

SEQUENTIAL CMOS

In a sequential pay CMO, one class of CMOs receives all principal payments
and prepayments. The next class of CMOs receives all principal payments
after the first class is paid off. This process repeats for each
sequential class of CMO. As a result, each class of sequential pay CMOs
reduces the prepayment risks of subsequent classes.

PACS, TACS AND COMPANION CLASSES

More sophisticated CMOs include planned amortization classes (PACs) and
targeted amortization classes (TACs). PACs and TACs are issued with
companion classes. PACs and TACs receive principal payments and
prepayments at a specified rate. The companion classes receive principal
payments and prepayments in excess of the specified rate. In addition,
PACs will receive the companion classes' share of principal payments, if
necessary, to cover a shortfall in the prepayment rate. This helps PACs
and TACs to control prepayment risks by increasing the risks to their
companion classes.

IOS AND POS

CMOs may allocate interest payments to one class (Interest Only or IOs)
and principal payments to another class (Principal Only or POs). POs
increase in value when prepayment rates increase. In contrast, IOs
decrease in value when prepayments increase, because the underlying
mortgages generate less interest payments. However, IOs tend to increase
in value when interest rates rise (and prepayments decrease), making IOs a
useful hedge against market risks.

FLOATERS AND INVERSE FLOATERS

Another variant allocates interest payments between two classes of CMOs.
One class (Floaters) receives a share of interest payments based upon a
market index such as LIBOR. The other class (Inverse Floaters) receives
any remaining interest payments from the underlying mortgages. Floater
classes receive more interest (and Inverse Floater classes receive
correspondingly less interest) as interest rates rise. This shifts
PREPAYMENT AND MARKET RISKS from the Floater to the Inverse Floater class,
reducing the price volatility of the Floater class and increasing the
price volatility of the Inverse Floater class.

Z CLASSES

CMOs must allocate all payments received from the underlying mortgages to
some class. To capture any unallocated payments, CMOs generally have an
accrual (Z) class. Z classes do not receive any payments from the
underlying mortgages until all other CMO classes have been paid off. Once
this happens, holders of Z class CMOs receive all payments and
prepayments. Similarly, REMICs have residual interests that receive any
mortgage payments not allocated to another REMIC class.

The degree of increased or decreased prepayment risks depends upon the
structure of the CMOs. However, the actual returns on any type of mortgage
backed security depend upon the performance of the underlying pool of
mortgages, which no one can predict and will vary among pools.

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which the Portfolio buys a security
from a dealer or bank and agrees to sell the security back at a mutually
agreed upon time and price. The repurchase price exceeds the sale price,
reflecting the Portfolio's return on the transaction. This return is
unrelated to the interest rate on the underlying security. The Portfolio will
enter into repurchase agreements only with banks and other recognized
financial institutions, such as securities dealers, deemed creditworthy by
the Adviser.

The Portfolio's custodian or subcustodian will take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian will
monitor the value of the underlying security each day to ensure that the
value of the security always equals or exceeds the repurchase price.

Repurchase agreements are subject to CREDIT RISKS.

DELAYED DELIVERY TRANSACTIONS

Delayed delivery transactions, including when issued transactions, are
arrangements in which the Portfolio buys securities for a set price, with
payment and delivery of the securities scheduled for a future time. During
the period between purchase and settlement, no payment is made by the
Portfolio to the issuer and no interest accrues to the Portfolio. The
Portfolio records the transaction when it agrees to buy the securities and
reflects their value in determining the price of its shares. Settlement dates
may be a month or more after entering into these transactions so that the
market values of the securities bought may vary from the purchase prices.
Therefore, delayed delivery transactions create market risks for the
Portfolio. Delayed delivery transactions also involve CREDIT RISKS in the
event of a counterparty default.

TO BE ANNOUNCED SECURITIES (TBAS)

As with other delayed delivery transactions, a seller agrees to issue a
TBA security at a future date. However, the seller does not specify the
particular securities to be delivered. Instead, the Portfolio agrees to
accept any security that meets specified terms. For example, in a TBA
mortgage backed transaction, the Portfolio and the seller would agree upon
the issuer, interest rate and terms of the underlying mortgages. The
seller would not identify the specific underlying mortgages until it
issues the security. TBA mortgage backed securities increase market risks
because the underlying mortgages may be less favorable than anticipated by
the Portfolio.

DOLLAR ROLLS

Dollar rolls are transactions where the Portfolio sells mortgage-backed
securities with a commitment to buy similar, but not identical,
mortgage-backed securities on a future date at a lower price. Normally,
one or both securities involved are TBA mortgage backed securities. Dollar
rolls are subject to market risks and credit risks.

SECURITIES LENDING

The Portfolio may lend portfolio securities to borrowers that the Adviser
deems creditworthy. In return, the Portfolio receives cash or liquid
securities from the borrower as collateral. The borrower must furnish
additional collateral if the market value of the loaned securities increases.
Also, the borrower must pay the Portfolio the equivalent of any dividends or
interest received on the loaned securities.

The Portfolio will reinvest cash collateral in securities that qualify as an
acceptable investment for the Portfolio. However, the Portfolio must pay
interest to the borrower for the use of cash collateral.

Loans are subject to termination at the option of the Portfolio or the
borrower. The Portfolio will not have the right to vote on securities while
they are on loan, but it will terminate a loan in anticipation of any
important vote. The Portfolio may pay administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest
earned on the cash collateral to a securities lending agent or broker.

Securities lending activities are subject to market risks and credit risks.

ASSET COVERAGE

In order to secure its obligations in connection with derivatives contracts
or special transactions, the Portfolio will either own the underlying assets,
enter into an offsetting transaction or set aside readily marketable
securities with a value that equals or exceeds the Portfolio's obligations.
Unless the Portfolio has other readily marketable assets to set aside, it
cannot trade assets used to secure such obligations entering into an
offsetting derivative contract or terminating a special transaction. This may
cause the Portfolio to miss favorable trading opportunities or to realize
losses on derivative contracts or special transactions.

PORTFOLIO TURNOVER

Prepayment of mortgage backed securities owned by the Portfolio could result in
a high portfolio turnover rate, which is likely to generate shorter-term gains
(losses) for its shareholders. Short-term gains are taxed at a higher rate than
longer-term gains. High portfolio turnover increases the Portfolio's trading
costs and may have an adverse impact on the Portfolio's performance.

TEMPORARY DEFENSIVE INVESTMENTS

INVESTMENT RISKS

BOND MARKET RISKS

o Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

o Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of
a fixed income security to changes in interest rates.

CREDIT RISKS

o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Portfolio will lose money.

PREPAYMENT RISKS

o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate mortgages
when mortgage rates fall. This results in the prepayment of mortgage backed
securities with higher interest rates. Conversely, prepayments due to
refinancings decrease when mortgage rates increase. This extends the life of
mortgage backed securities with lower interest rates. As a result, increases
in prepayments of high interest rate mortgage backed securities, or decreases
in prepayments of lower interest rate mortgage backed securities, may reduce
their yield and price. This relationship between interest rates and mortgage
prepayments makes the price of mortgage backed securities more volatile than
most other types of fixed income securities with comparable credit risks.

o Mortgage backed securities generally compensate for greater prepayment risk
by paying a higher yield. The difference between the yield of a mortgage
backed security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk. Spreads
may increase generally in response to adverse economic or market conditions.
A security's spread may also increase if the security is perceived to have
increased prepayment risk or less market demand. An increase in the spread
may cause the price of the security to decline.

o If a fixed income security is called, the Portfolio may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.

LIQUIDITY RISKS

o Trading opportunities are more limited for CMOs that have complicated terms
or that are not widely held. These features may make it more difficult to
sell or buy a security at a favorable price or time. Consequently, the
Portfolio may have to accept a lower price to sell a security, sell other
securities to raise cash or give up an investment opportunity, any of which
could have a negative effect on the Portfolio's performance. Infrequent
trading of securities may also lead to an increase in their price volatility.

o Liquidity risk also refers to the possibility that the Portfolio may not be
able to sell a security when it wants to. If this happens, the Portfolio will
be required to continue to hold the security, and the Portfolio could incur
losses.

RISKS ASSOCIATED WITH COMPLICATED CMOS

o CMOs with complicated terms, such as companion classes, IOs, POs and Inverse
Floaters, generally entail greater market, prepayment and liquidity risks
than other mortgage backed securities. For example, their prices are more
volatile and their trading market may be more limited.

INVESTMENT RATINGS FOR INVESTMENT GRADE SECURITIES

The Adviser will determinate whether a security is investment grade based upon
the credit ratings given by one or more nationally recognized rating services.
For example, Standard and Poor's, a rating service, assigns ratings to
investment grade securities (AAA, AA, A, and BBB) based on their assessment of
the likelihood of the issuer's inability to pay interest or principal (default)
when due on each security. Lower credit ratings correspond to higher credit
risk. If a security has not received a rating, the Portfolio must rely entirely
upon the Adviser's credit assessment that the security is comparable to
investment grade.

MANAGEMENT ORGANIZATION AND CAPITAL STRUCTURE

INVESTMENT ADVISER

A Board of Directors governs the Trust. The Board selects and oversees the
Adviser, Federated Research Corp. The Adviser manages the Portfolio's assets
including buying and selling portfolio securities. The Adviser's address is
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The
Adviser will not receive a fee for its investment advisory services.

PORTFOLIO MANAGERS

The Portfolio's managers are: Kathleen Foody-Malus, Edward Tiedge and Todd
Abraham.

Kathleen M. Foody-Malus has been the Portfolio's portfolio manager since
inception. Ms. Foody-Malus joined Federated Investors in 1983 and has been a
Vice President of the Adviser since 1993. Ms. Foody-Malus served as an Assistant
Vice President of the investment adviser from 1990 until 1992. Ms. Foody-Malus
received her M.B.A. in Accounting/Finance from the University of Pittsburgh.

Edward J. Tiedge has been the Portfolio's portfolio manager since inception. Mr.
Tiedge joined Federated Investors in 1993 and has been a Vice President of the
Adviser since January 1996. He served as an Assistant Vice President of the
Portfolio's investment adviser in 1995, and an Investment Analyst during 1993
and 1994. Mr. Tiedge served as Director of Investments at Duquesne Light Company
from 1990 to 1993. Mr. Tiedge is a Chartered Financial Analyst and received his
M.S. in Industrial Administration from Carnegie Mellon University.

Todd A. Abraham has been the Portfolio's portfolio manager since inception. Mr.
Abraham has been a Vice President of the Adviser since July 1997. Mr. Abraham
joined Federated Investors in 1993 as an Investment Analyst and served as
Assistant Vice President from 1995 to 1997. Mr. Abraham served as a Portfolio
Analyst at Ryland Mortgage Co. from 1992 to 1993. Mr. Abraham is a Chartered
Financial Analyst and received his M.B.A. in finance from Loyola College.

SHAREHOLDER INFORMATION

Beneficial interests in the Portfolio are issued solely in private placement
transactions which do not involve any "public offering" within the meaning of
Section 4(2) of the Securities Act of 1933 (1933 Act). Investments in the
Portfolio may only be made by investment companies, insurance company separate
accounts, common or commingled trust funds or similar organizations or entities
that are "accredited investors" within the meaning of Regulation D of the 1933
Act. This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.

PRICING OF PORTFOLIO SHARES

The net asset value (NAV) of the Portfolio is determined as of the end of
regular trading (normally, 4:00 p.m., Eastern time) each day the NYSE is open.

The NAV per share of the Portfolio is computed by dividing the value of the
Portfolio's assets, less all liabilities, by the total number of shares
outstanding.

PURCHASE OF PORTFOLIO SHARES

Shares of the Portfolio may be purchased any day the New York Stock Exchange
(NYSE) is open.

Purchases should be made in accordance with procedures established by the
Transfer Agent.

Payment by federal funds must be received by the Trust's custodian, State Street
Bank and Trust Company, by 3:00 p.m. (Eastern time) the next business day
following the receipt of the purchase order.

There is no minimum required initial or subsequent investment amount.

The Portfolio reserves the right to cease accepting investments in the Portfolio
at any time or to reject any investment order.

REDEMPTION OF PORTFOLIO SHARES

Shares of the Portfolio may be redeemed any day the NYSE is open.

Redemption requests should be made in accordance with procedures established by
the Transfer Agent.

Redemption requests will receive the NAV next determined after the request is
received in proper form by the Transfer Agent.

Redemption proceeds will normally be delivered within one business day after a
request is received in proper form. Payment may be delayed up to seven days:

o to allow a purchase order to clear;
o during periods of market volatility; or
o when a shareholder's trade activity or amount adversely impacts the
Portfolio's ability to manage its assets.

REDEMPTION IN KIND

Although the Portfolio intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Portfolio's portfolio securities.

CONFIRMATIONS AND ACCOUNT STATEMENTS

DIVIDENDS AND DISTRIBUTIONS

Dividends will be automatically reinvested in additional Shares unless the
shareholder has elected cash payments.

TAX CONSEQUENCES

Portfolio distributions are expected to be both dividends and capital gains.
Redemptions are taxable sales.

DISTRIBUTION ARRANGEMENTS

Federated Securities Corp., is the Trust's Placement Agent. It receives no fee
for its services.

FEDERATED MORTGAGE CORE PORTFOLIO

A Portfolio of Federated Core Trust

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

PART B

(INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION)

FEBRUARY 29, 2000

This Part B is not a prospectus. Read this Part B in conjunction with the Part A
for Federated Mortgage Core Portfolio dated February 29, 2000. Obtain Part A
without charge by calling 1-800-341-7400.

TABLE OF CONTENTS

Portfolio History 1

Investments, Techniques, Risks and Limitations 2

Management of the Trust 7

Investment Advisory and Other Services 11

Brokerage Allocation and Other Practices 12

Capital Stock and Other Securities 13

Shareholder Information 13

Taxation of the Portfolio 14

Financial Statements 14

Appendix 15

Addresses 17

PORTFOLIO HISTORY

INVESTMENTS, TECHNIQUES, RISKS AND LIMITATIONS

SECURITIES IN WHICH THE PORTFOLIO INVESTS

Following is a table that indicates which types of securities are a:
o P= PRINCIPAL investment of the Portfolio; (shaded in chart)
- ----------------------------------------------------------
SECURITIES MORTGAGE
CORE
PORTFOLIO

- ----------------------------------------------------------
- ----------------------------------------------------------
FIXED INCOME SECURITIES P

- ----------------------------------------------------------
- ----------------------------------------------------------
TREASURY SECURITIES A
- -----------------------------------------------
- ----------------------------------------------------------
AGENCY SECURITIES P

- ----------------------------------------------------------
- ----------------------------------------------------------
ZERO COUPON SECURITIES A
- ----------------------------------------------------------
- -----------------------------------------------
MORTGAGE BACKED SECURITIES P

- -----------------------------------------------
- ----------------------------------------------------------
CMOS P

- -----------------------------------------------
- ----------------------------------------------------------
ASSET BACKED SECURITIES (home equity, A
manufactured housing)
- -----------------------------------------------
- ----------------------------------------------------------
CREDIT ENHANCEMENT (home equity, A
manufactured housing)
- ----------------------------------------------------------
- ----------------------------------------------------------
DERIVATIVE CONTRACTS A
- ----------------------------------------------------------
- ----------------------------------------------------------
FUTURES CONTRACTS A
- ----------------------------------------------------------
- ----------------------------------------------------------
OPTIONS A
- ----------------------------------------------------------
- ----------------------------------------------------------
SWAPS A
- ----------------------------------------------------------
- ----------------------------------------------------------
INTEREST RATE SWAPS A
- ----------------------------------------------------------
- ----------------------------------------------------------
CAPS AND FLOORS A
- ----------------------------------------------------------
SPECIAL TRANSACTIONS P

- ----------------------------------------------------------
- -----------------------------------------------
REPURCHASE AGREEMENTS P

- -----------------------------------------------
- ----------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS A
- ----------------------------------------------------------
- ----------------------------------------------------------
WHEN ISSUED TRANSACTIONS P

- ----------------------------------------------------------
- ----------------------------------------------------------
TO BE ANNOUNCED SECURITIES P

- ----------------------------------------------------------
- ----------------------------------------------------------
DOLLAR ROLLS P

- -----------------------------------------------
- ----------------------------------------------------------
SECURITIES LENDING P

- ----------------------------------------------------------
- ----------------------------------------------------------
SECURITIES OF OTHER INVESTMENT COMPANIES A

- -----------------------------------------------
- ----------------------------------------------------------
ASSET COVERAGE P

- ----------------------------------------------------------

o A= ACCEPTABLE (but not principal) investment of the Portfolio

SECURITIES DESCRIPTIONS AND TECHNIQUES

In addition to the principal securities listed in Part A, the Portfolio may also
invest in the following:

FIXED INCOME SECURITIES

The following describes the types of fixed income securities in which the
Portfolio invests:

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the
lowest CREDIT RISKS.

ZERO COUPON SECURITIES

Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred
to as a coupon payment). Investors buy zero coupon securities at a price
below the amount payable at maturity. The difference between the purchase
price and the amount paid at maturity represents interest on the zero coupon
security. Investors must wait until maturity to receive interest and
principal, which increases the market and credit risks of a zero coupon
security.

There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created from interest bearing bonds by separating the right to receive the
bond's coupon payments from the right to receive the bond's principal due at
maturity, a process known as coupon stripping. Treasury STRIPs, IOs and POs
are the most common forms of stripped zero coupon securities. In addition,
some securities give the issuer the option to deliver additional securities
in place of cash interest payments, thereby increasing the amount payable at
maturity. These are referred to as pay-in-kind or PIK securities.

MORTGAGE RELATED ASSET BACKED SECURITIES

Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts.
The Portfolio will purchase only mortgage-related asset backed securities
such as home equity loans, second mortgages and manufactured housing
obligations. Asset backed securities have PREPAYMENT RISKS. Like CMOs, asset
backed securities may be structured like Floaters, Inverse Floaters, IOs and
POs.

Like mortgage backed securities, asset backed securities may be issued by a
private entity and, although these securities must be rated investment grade,
they present CREDIT RISK.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees to
pay amounts due on a fixed income security if the issuer defaults. In some
cases the company providing credit enhancement makes all payments directly to
the security holders and receives reimbursement from the issuer. Normally,
the credit enhancer has greater financial resources and liquidity than the
issuer. For this reason, the Adviser usually evaluates the credit risk of a
fixed income security based solely upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit,
bond insurance and surety bonds. Credit enhancement also includes
arrangements where securities or other liquid assets secure payment of a
fixed income security. If a default occurs, these assets may be sold and the
proceeds paid to security's holders. Either form of credit enhancement
reduces credit risks by providing another source of payment for a fixed
income security.

DERIVATIVE CONTRACTS

Derivative contracts are financial instruments that require payments based upon
changes in the values of designated (or underlying) securities, currencies,
commodities, financial indices or other assets. Some derivative contracts (such
as futures, forwards and options) require payments relating to a future trade
involving the underlying asset. Other derivative contracts (such as swaps)
require payments relating to the income or returns from the underlying asset.
The other party to a derivative contract is referred to as a counterparty.

Many derivative contracts are traded on securities or commodities exchanges. In
this case, the exchange sets all the terms of the contract except for the price.
Investors make payments due under their contracts through the exchange. Most
exchanges require investors to maintain margin accounts through their brokers to
cover their potential obligations to the exchange. Parties to the contract make
(or collect) daily payments to the margin accounts to reflect losses (or gains)
in the value of their contracts. This protects investors against potential
defaults by the counterparty. Trading contracts on an exchange also allows
investors to close out their contracts by entering into offsetting contracts.

For example, the Portfolio could close out an open contract to buy an asset at a
future date by entering into an offsetting contract to sell the same asset on
the same date. If the offsetting sale price is more than the original purchase
price, the Portfolio realizes a gain; if it is less, the Portfolio realizes a
loss. Exchanges may limit the amount of open contracts permitted at any one
time. Such limits may prevent the Portfolio from closing out a position. If this
happens, the Portfolio will be required to keep the contract open (even if it is
losing money on the contract), and to make any payments required under the
contract (even if it has to sell portfolio securities at unfavorable prices to
do so). Inability to close out a contract could also harm the Portfolio by
preventing it from disposing of or trading any assets it has been using to
secure its obligations under the contract.

The Portfolio may trade in the following types of derivative contracts:

FUTURES CONTRACTS

Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a specified
price, date, and time. Entering into a contract to buy an underlying asset is
commonly referred to as buying a contract or holding a long position in the
asset. Entering into a contract to sell an underlying asset is commonly
referred to as selling a contract or holding a short position in the asset.
Futures contracts are considered to be commodity contracts.

The Portfolio may buy/sell financial futures contracts.

OPTIONS

Options are rights to buy or sell an underlying asset for a specified price
(the exercise price) during, or at the end of, a specified period. A call
option gives the holder (buyer) the right to buy the underlying asset from
the seller (writer) of the option. A put option gives the holder the right to
sell the underlying asset to the writer of the option. The writer of the
option receives a payment, or premium, from the buyer, which the writer keeps
regardless of whether the buyer uses (or exercises) the option.

The Portfolio may:
o Buy put options on financial futures contracts in anticipation of a
decrease in the value of the underlying asset; and
o Buy or write options to close out existing options positions.

The Portfolio may also write call options on financial futures contracts to
generate income from premiums, and in anticipation of a decrease or only
limited increase in the value of the underlying asset. If a call written by
the Portfolio is exercised, the Portfolio foregoes any possible profit from
an increase in the market price of the underlying asset over the exercise
price plus the premium received.

When the Portfolio writes options on futures contracts, it will be subject to
margin requirements similar to those applied to futures contracts.

SWAPS

Swaps are contracts in which two parties agree to pay each other (swap) the
returns derived from underlying assets with differing characteristics. Most
swaps do not involve the delivery of the underlying assets by either party,
and the parties might not own the assets underlying the swap. The payments
are usually made on a net basis so that, on any given day, the Portfolio
would receive (or pay) only the amount by which its payment under the
contract is less than (or exceeds) the amount of the other party's payment.
Swap agreements are sophisticated instruments that can take many different
forms, and are known by a variety of names including caps, floors, and
collars. Common swap agreements that the Portfolio may use include:

INTEREST RATE SWAPS

Interest rate swaps are contracts in which one party agrees to make
regular payments equal to a fixed or floating interest rate times a stated
principal amount of fixed income securities, in return for payments equal
to a different fixed or floating rate times the same principal amount, for
a specific period. For example, a $10 million LIBOR swap would require one
party to pay the equivalent of the London Interbank Offer Rate of interest
(which fluctuates) on $10 million principal amount in exchange for the
right to receive the equivalent of a stated fixed rate of interest on $10
million principal amount.

CAPS AND FLOORS

Caps and Floors are contracts in which one party agrees to make payments
only if an interest rate or index goes above (Cap) or below (Floor) a
certain level in return for a fee from the other party.

SPECIAL TRANSACTIONS

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which the
Portfolio is the seller (rather than the buyer) of the securities, and agrees
to repurchase them at an agreed upon time and price. A reverse repurchase
agreement may be viewed as a type of borrowing by the Portfolio. Reverse
repurchase agreements are subject to CREDIT RISKS. In addition, reverse
repurchase agreements create LEVERAGE RISKS because the Portfolio must
repurchase the underlying security at a higher price, regardless of the
market value of the security at the time of repurchase.

INTER-FUND BORROWING AND LENDING ARRANGEMENTS

SECURITIES OF OTHER INVESTMENT COMPANIES

The Portfolio may invest its assets in securities of other investment companies,
as an efficient means of carrying out its investment policies and managing its
uninvested cash. It should be noted that investment companies incur certain
expenses, such as management fees, and, therefore, any investment by the
Portfolio in shares of other investment companies may be subject to such
duplicate expenses. The Portfolio will limit its investment in other investment
companies to not more than 3% of the total outstanding voting stock of any
investment company, will invest no more than 5% of its total assets in any one
investment company, and will invest no more than 10% of its total assets in
investment companies in general.

INVESTMENT RISKS

BOND MARKET RISKS

o Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

CREDIT RISKS

o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Portfolio will lose money.

o Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not
received a rating, the Portfolio must rely entirely upon the Adviser's credit
assessment.

o Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable maturity
(the spread) measures the additional interest paid for risk. Spreads may
increase generally in response to adverse economic or market conditions. A
security's spread may also increase if the security's rating is lowered, or
the security is perceived to have an increased credit risk. An increase in
the spread will cause the price of the security to decline.

o Credit risk includes the possibility that a party to a transaction involving
the Portfolio will fail to meet its obligations. This could cause the
Portfolio to lose the benefit of the transaction or prevent the Portfolio
from selling or buying other securities to implement its investment strategy.

LIQUIDITY RISKS

o Trading opportunities are more limited for fixed income securities that have
not received any credit ratings, have received ratings below investment grade
or are not widely held. These features may make it more difficult to sell or
buy a security at a favorable price or time. Consequently, the Portfolio may
have to accept a lower price to sell a security, sell other securities to
raise cash or give up an investment opportunity, any of which could have a
negative effect on the Portfolio's performance. Infrequent trading of
securities may also lead to an increase in their price volatility.

o Liquidity risk also refers to the possibility that the Portfolio may not be
able to sell a security or close out a derivative contract when it wants to.
If this happens, the Portfolio will be required to continue to hold the
security or keep the position open, and the Portfolio could incur losses.

SECTOR RISKS

o A substantial part of the Portfolio's portfolio may be comprised of
securities issued or credit enhanced by companies in similar businesses, or
with other similar characteristics. As a result, the Portfolio will be more
susceptible to any economic, business, political, or other developments which
generally affect these issuers.

LEVERAGE RISKS

o Leverage risk is created when an investment exposes the Portfolio to a level
of risk that exceeds the amount invested. Changes in the value of such an
investment magnify the Portfolio's risk of loss and potential for gain.

o The Portfolio may invest in instruments whose returns are based on a multiple
of a specified index, security, or other benchmark. Such performance
multiplication may increase leverage risks.

INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN

ISSUING SENIOR SECURITIES

The Portfolio will not issue senior securities, except as permitted by its
investment objective and policies.

BORROWING MONEY

The Portfolio will not borrow money, except to the extent permitted under the
1940 Act (which currently limits borrowings to no more than 33 1/3% of the value
of the Portfolio's total assets). For purposes of this investment restriction,
the entry into options, futures contracts and dollar roll transactions shall not
constitute borrowing.

PLEDGING ASSETS

CONCENTRATION OF INVESTMENTS

INVESTING IN COMMODITIES

The Portfolio will not purchase or sell commodities, commodity contracts, or
commodity futures contracts except to the extent that the Portfolio may engage
in transactions involving futures contracts and related options.

INVESTING IN REAL ESTATE

LENDING CASH OR SECURITIES

UNDERWRITING

DIVERSIFICATION OF INVESTMENTS

RESTRICTED AND ILLIQUID SECURITIES

The Portfolio has no present intention to borrow money in excess of 5% of the
value of its net assets during the coming fiscal year.

MANAGEMENT OF THE TRUST

BOARD OF TRUSTEES, MANAGEMENT INFORMATION, COMPENSATION

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years and other notable positions held,
total compensation received as a Trustee from the Trust for its most recent
fiscal year, and the total compensation received from the Federated Fund Complex
for the most recent calendar year. The Trust is comprised of two portfolios and
the Federated Fund Complex is comprised of 43 investment companies, whose
investment advisers are affiliated with the Portfolio's Adviser.

NAME TOTAL
BIRTHDATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST 5 YEARS FROM TRUST AND FUND

COMPLEX

Company and Chairman and Director,
Federated Investment Counseling.
THOMAS G. BIGLEY Director or Trustee of the Federated $1,367.67 $116,760.63
Birthdate: February Fund Complex; Director, Member of for the
3, 1934 Executive Committee, Children's Trust and 43
15 Old Timber Trail Hospital of Pittsburgh; Director, other
Pittsburgh, PA Robroy Industries, Inc. (coated investment
TRUSTEE steel conduits/computer storage companies in
equipment); formerly: Senior the Fund
Partner, Ernst & Young LLP; Complex
Director, MED 3000 Group, Inc.
(physician practice management);
Director, Member of Executive

Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated $1,504.67 $128,455.37
Birth Date: June 23, Fund Complex; President, Investment for the
1937 Properties Corporation; Senior Vice Trust and 43
Grubb & President, John R. Wood and other
Ellis/Investment Associates, Inc., Realtors; Partner investment
Properties or Trustee in private real estate companies in
Corporation ventures in Southwest Florida; the Fund
3201 Tamiami Trail formerly: President, Naples Property Complex
North Management, Inc. and Northgate
Naples, FL Village Development Corporation.
TRUSTEE

Previous Positions: Chairman of the

Board and Chief Executive Officer,

Computer Consoles, Inc.; President

and Chief Operating Officer, Wang

Laboratories; Director, First

National Bank of Boston; Director,
Apollo Computer, Inc.

Previous Positions: Director, VISA

USA and VISA International; Chairman

and Director, Massachusetts Bankers

Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.

JOHN E. MURRAY, JR., Director or Trustee of the Federated $1,504.67 $128,455.37
J.D., S.J.D.# Fund Complex; President, Law for the
Birth Date: December Professor, Duquesne University; Trust and 43
20, 1932 Consulting Partner, Mollica & other
President, Duquesne Murray; Director, Michael Baker investment
University Corp. (engineering, construction, companies in
Pittsburgh, PA operations and technical services). the Fund
TRUSTEE Complex
Previous Positions: Dean and

Professor of Law, University of

Pittsburgh School of Law; Dean and

Manufacturers Products, Inc.;
Director, Walsh & Kelly, Inc. (heavy

highway contractor); formerly: Vice
President, Walsh & Kelly, Inc.

EDWARD C. GONZALES President, Executive Vice President $0 $0 for the
Birthdate: October and Treasurer of some of the Funds Trust and
22, 1930 in the Federated Fund Complex; Vice 42 other
Federated Investors Chairman, Federated Investors, Inc.; investment
Tower Trustee, Federated Administrative companies
1001 Liberty Avenue Services; formerly: Trustee or in the Fund
Pittsburgh, PA Director of some of the Funds in the Complex
EXECUTIVE VICE Federated Fund Complex; CEO and
PRESIDENT Chairman, Federated Administrative
Services; Vice President, Federated
Investment Management Company,
Federated Investment Counseling,
Federated Global Investment
Management Corp. and Passport
Research, Ltd.; Director and
Executive Vice President, Federated
Securities Corp.; Director,
Federated Services Company; Trustee,
Federated Shareholder Services
Company.
JOHN W. MCGONIGLE Executive Vice President and $0 $0 for the
Birthdate: October Secretary of the Federated Fund Trust and
26, 1938 Complex; Executive Vice President, 43 other
Federated Investors Secretary and Director, Federated investment
Tower Investors, Inc.; formerly, Trustee, companies in
1001 Liberty Avenue Federated Investment Management the Fund
Pittsburgh, PA Company and Federated Investment Complex
EXECUTIVE VICE Counseling; Director, Federated
PRESIDENT AND Global Investment Management Corp,
SECRETARY Federated Services Company and
Federated Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated Fund $0 $0 for the
Birthdate: June 17, Complex; Vice President - Funds Trust and
1954 Financial Services Division, 43 other
Federated Investors Federated Investors, Inc.; Formerly: investment
Tower various management positions within companies in
1001 Liberty Avenue Funds Financial Services Division of the Fund
Pittsburgh, PA Federated Investors, Inc. Complex
TREASURER

Chief Executive Officer, Federated
Securities Corp.

MARK E. DURBIANO Mark E. Durbiano has been the $0 $0 for the
Birthdate: September Portfolio Manager of High Yield Bond Trust and
21, 1959 Portfolio since the Fund's 2 other
Federated Investors inception. He is a Vice President investment
Tower of the Trust. Mr. Durbiano joined companies in
1001 Liberty Avenue Federated Investors, Inc. in 1982 the Fund
Pittsburgh, PA and has been a Senior Portfolio Complex
VICE PRESIDENT Manager and a Senior Vice President
of the Portfolio's investment
adviser since 1996. From 1998
through 1995, Mr. Durbiano was a
Portfolio Manager and a Vice
President of the Portfolio's
Adviser. Mr. Durbiano is a Chartered
Financial Analyst and received his
M.B.A. in Finance from the
University of Pittsburgh.
KATHLEEN M. Kathleen M. Foody-Malus has been the $0 $0 for the
FOODY-MALUS Portfolio Manager of Federated Trust and
Birth Date: March Mortgage Core Portfolio since the 2 other
26, 1960 Fund's inception. She is Vice investment
Federated Investors President of the Trust. Ms. companies in
Tower Foody-Malus joined Federated in 1983 the Fund
1001 Liberty Avenue and has been a Senior Portfolio Complex
Pittsburgh, PA Manager since 1996 and a Vice
VICE PRESIDENT President of the Fund's Adviser
since 1993. She was a Portfolio
Manager and a Vice President of the
Fund's Adviser from 1993 to 1996.
Ms. Foody-Malus received her M.B.A.
in Accounting/Finance from the
University of Pittsburgh.
WILLIAM D. DAWSON, Chief Investment Officer of this $0 $0 for the
III Fund and various other Funds in the Trust and
Birth Date: March 3, Federated Fund Complex; Executive 27 other
1949 Vice President, Federated Investment investment
Federated Investors Counseling, Federated Global companies in
Tower Investment Management Corp., the Fund
1001 Liberty Avenue Federated Investment Management Complex
Pittsburgh, PA Company and Passport Research, Ltd.;
CHIEF INVESTMENT Registered Representative, Federated
OFFICER Securities Corp.; Portfolio Manager,
Federated Administrative Services;

Vice President, Federated Investors,
Inc.; formerly: Executive Vice $0
President and Senior Vice President,
Federated Investment Counseling
Institutional Portfolio Management $0 for the
Services Division; Senior Vice Trust and
THOMAS MADDEN President, Federated Investment 11 other
Birthdate: October Management Company and Passport investment
22, 1945 Research, Ltd. companies in
Federated Investors the Fund
Tower Chief Investment Officer of this Complex
1001 Liberty Avenue Fund and various other Funds in the
Pittsburgh, PA Federated Fund Complex; Executive
CHIEF INVESTMENT Vice President, Federated Investment
OFFICER Counseling, Federated Global
Research Corp., Federated Advisers,
Federated Management, Federated
Research, and Passport Research,
Ltd.; Vice President, Federated
Investors, Inc.; Formerly: Executive
Vice President and Senior Vice
President, Federated Investment
Counseling Institutional Portfolio
Management Services Division; Senior
Vice President, Federated Research
Corp., Federated Advisers, Federated
Management, Federated Research, and
Passport Research, Ltd.
- --------------------------------------------------------------------------------
</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the1940 Act.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, President of the Trust.

As of February 1, 2000 the Portfolio's Board and Officers as a group owned less
than 1% of the Portfolio's outstanding Shares.

INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Portfolio. The Adviser is a wholly-owned subsidiary of Federated Investors, Inc.
(Federated).

The Adviser will provide investment advisory services at no fee.

PRINCIPAL UNDERWRITER

The Portfolio's placement agent is Federated Securities Corp., located at
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

ADMINISTRATOR

MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS OF THE

FEDERATED FUNDS

0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750
million

Federated Services Company will voluntarily waive all or a portion of the
administrative fee paid by the Portfolio. Federated Services Company may
terminate this voluntary waiver at any time.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Portfolio.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

INDEPENDENT AUDITOR

Ernst & Young LLP is the independent auditor for the Portfolio.

BROKERAGE ALLOCATION AND OTHER PRACTICES

BROKERAGE TRANSACTIONS

RESEARCH SERVICES

CAPITAL STOCK AND OTHER SECURITIES

CAPITAL STOCK

MASSACHUSETTS PARTNERSHIP LAW

SHAREHOLDER INFORMATION

Beneficial interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act.

OFFERING PRICE

The Portfolio's net asset value (NAV) per Share fluctuates and is based on the
market value of all securities and other assets of the Portfolio.

Market values of the Portfolio's portfolio securities are determined as follows:

o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;

for all other securities, at fair value as determined in good faith by the
Board.

REDEMPTION IN KIND

TAXATION OF THE PORTFOLIO

FINANCIAL STATEMENTS

Investors of record will receive annual reports audited by the Portfolio's
independent auditor and unaudited semi-annual reports.

APPENDIX

STANDARD & POOR'S LONG-TERM DEBT RATING DEFINITIONS

AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.

CC--The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC debt rating.

FITCH IBCA, INC. LONG-TERM DEBT RATING DEFINITIONS

CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time. C--Bonds are imminent default in payment of
interest or principal.

ADDRESSES

FEDERATED MORTGAGE CORE PORTFOLIO

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

PLACEMENT AGENT
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue

Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT PUBLIC ACCOUNTANTS

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

Cusip 31409N 20 0
(2/00)

PART C. OTHER INFORMATION.

ITEM 23. EXHIBITS:

(a) Conformed copy of Declaration of Trust of the Registrant;
1 (b) Copy of By-Laws of the Registrant; 1 (c) Not
applicable; (d) Conformed copy of Investment Advisory
Contract of the Registrant

with Exhibits A & B attached thereto; 5
(i) Assignment of Registrant's Investment Advisory Contract to
Federated Investment Management Company; 5
(e) (i) Conformed copy of Placement Agent Agreement of High Yield Bond
Portfolio; 2
(ii) Conformed copy of Exclusive Placement Agent Agreement of
Federated Mortgage Core Portfolio; 5
(f) Not applicable;
(g) Conformed copy of Custodian Agreement of the Registrant; 1
(h) Conformed copy of Agreement for Fund Accounting Services,
Administrative Services, Shareholder Transfer Agency Services and
Custody Services Procurement; 2
(i) Not applicable;
(j) Not applicable;
(k) Not applicable;
(l) Form of Written Assurances from Initial Shareholders; 2
(m) Not applicable; (n) Not applicable; (o) (i) Conformed Copy
of Power of Attorney; +

(ii) Conformed Copy of Limited Power of Attorney; 3
(iii)Schedule 1 to Limited Power of Attorney. 5

- --------------------------------
+ Exhibits have been filed electronically.

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed December 30, 1997 (File No. 811-08519).

2. Response is incorporated by reference to Registrant's Amendment No. 1 on
Form N-1A filed January 30, 1998 (File No. 811-08519).

3. Response is incorporated by reference to Registrant's Amendment No. 3 on
Form N-1A filed April 16, 1999 (File No. 811-08519).

5. Response is incorporated by reference to Registrant's Amendment No. 5 on
Form N-1A filed November 22, 1999 (File No. 811-08519).

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None

ITEM 25. INDEMNIFICATION:

Indemnification is provided to Officers and Trustees of the
Registrant pursuant to Section 2 of Article XII of Registrant's
Declaration of Trust. The Investment Advisory Contract between the
Registrant and Federated Investment Management Company ("Adviser")
provides that, in the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the obligations or duties
under the Investment Advisory Contract on the part of Adviser,
Adviser shall not be liable to the Registrant or to any shareholder
for any act or omission in the course of or connected in any way
with rendering services or for any losses that may be sustained in
the purchase, holding, or sale of any security. Registrant's
Trustees and Officers are covered by an Investment Trust Errors and
Omissions Policy.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, Officers, and
controlling persons of the Registrant by the Registrant pursuant to
the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by Trustees), Officers,
or controlling persons of the Registrant in connection with the
successful defense of any act, suit, or proceeding) is asserted by
such Trustees, Officers, or controlling persons in connection with
the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final
adjudication of such issues.

Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940 for Trustees,
Officers, and controlling persons of the Registrant by the
Registrant pursuant to the Declaration of Trust or otherwise, the
Registrant is aware of the position of the Securities and Exchange
Commission as set forth in Investment Company Act Release No.
IC-11330. Therefore, the Registrant undertakes that in addition to
complying with the applicable provisions of the Declaration of Trust
or otherwise, in the absence of a final decision on the merits by a
court or other body before which the proceeding was brought, that an
indemnification payment will not be made unless in the absence of
such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of non-party
Trustees who are not interested persons of the Registrant or (ii) by
independent legal counsel in a written opinion that the indemnitee
was not liable for an act of willful misfeasance, bad faith, gross
negligence, or reckless disregard of duties. The Registrant further
undertakes that advancement of expenses incurred in the defense of a
proceeding (upon undertaking for repayment unless it is ultimately
determined that indemnification is appropriate) against an Officer,
Trustee, or controlling person of the Registrant will not be made
absent the fulfillment of at least one of the following conditions:
(i) the indemnitee provides security for his undertaking; (ii) the
Registrant is insured against losses arising by reason of any lawful
advances; or (iii) a majority of a quorum of disinterested non-party
Trustees or independent legal counsel in a written opinion makes a
factual determination that there is reason to believe the indemnitee
will be entitled to indemnification.

Item 26. Business and Other Connections of Investment Adviser:

For a description of the other business of the investment adviser, see
the section entitled "Who Manages the Fund?" in Part A. The
affiliations with the Registrant of four of the Trustees and one of the
Officers of the investment adviser are included in Part B of this
Registration Statement under "Who Manages and Provides Services to the
Fund?" The remaining Trustees of the investment adviser and, in
parentheses, their principal occupations are: Thomas R. Donahue, (Chief
Financial Officer, Federated Investors, Inc.), 1001 Liberty Avenue,
Pittsburgh, PA, 15222-3779 and Mark D. Olson (Partner, Wilson, Halbrook
& Bayard), 107 W. Market Street, Georgetown, Delaware 19947.

The remaining Officers of the investment adviser are:

Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden

Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Jonathan C. Conley
Deborah A. Cunningham
Michael P. Donnelly
Linda A. Duessel
Mark E. Durbiano
James E. Grefenstette
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski
Bernard A. Picchi
Peter Vutz

Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
Micheal W. Casey
Robert E. Cauley
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Donald T. Ellenberger
Eamonn G. Folan
Kathleen M. Foody-Malus
Thomas M. Franks
Marc Halperin
John W. Harris
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Item 26. Business and Other Connections of Investment Adviser (continued):
Constantine J. Kartsonas
Robert M. Kowit
Richard J. Lazarchic
Steven J. Lehman
Marian R. Marinack
Christopher Matyszewski
William M. Painter
Jeffrey A. Petro

Vice Presidents Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Edward J. Tiedge
Leonardo A. Vila
Paige M. Wilhelm
Lori A. Wolff
George B. Wright
Assistant Vice Presidents: Catherine A. Arendas
Arminda Aviles
Nancy J. Belz
James R. Crea, Jr.
Karol M. Krummie
Lee R. Cunningham, II
James H. Davis, II
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Falwell
John T. Gentry
Nikola A. Ivanov
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Natalie F. Metz
Thomas Mitchell
Joseph M. Natoli
Trent Nevills
Bob Nolte
Mary Kay Pavuk
John Quartarolo
Rae Ann Rice
Roberto Sanchez-Dahl, Sr.
Sarath Sathkumara
James W. Schaub
John Sidawi
Matthew K. Stapen
Diane R. Startari
Diane Tolby
Timothy G. Trebilcock
Leonarda A. Vila
Steven J. Wagner
Item 26. Business and Other Connections of Investment Adviser (continued):

Secretary: G. Andrew Bonnewell

Treasurer: Thomas R. Donahue

Assistant Secretaries: C. Grant Anderson
Karen M. Brownlee
Leslie K. Ross

Assistant Treasurer: Denis McAuley, III

The business address of each of the Officers of the investment adviser
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3779. These individuals are also officers of a
majority of the investment advisers to the investment companies in the
Federated Fund Complex described in Part B of this Registration
Statement.

ITEM 27. PRINCIPAL UNDERWRITERS:

(a)...Federated Securities Corp. the Distributor for shares of the
Registrant, acts as principal underwriter for the following open-end
investment companies, including the Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fixed Income Securities, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income Securities, Inc.;
Federated High Income Bond Fund, Inc.; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Insurance Series; Federated Investment
Series Funds, Inc.; Federated Managed Allocation Portfolios; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Securities Income Trust; Federated Short-Term Municipal Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; FirstMerit Funds; Hibernia Funds;
Independence One Mutual Funds; Intermediate Municipal Trust; International
Series, Inc.; Marshall Funds, Inc.; Money Market Obligations Trust; Regions
Funds; RIGGS Funds; SouthTrust Funds; Tax-Free Instruments Trust; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; and World
Investment Series, Inc.;

............(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard B. Fisher Chairman, Vice President
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Arthur L. Cherry Director,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales
Federated Investors Tower and Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Treasurer,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ronald M. Petnuch Senior Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Dennis M. Laffey Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Amy Michalisyn Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peter III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Donald C. Edwards Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kirk A. Montgomery Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy S. Johnson Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Victor R. Siclari Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Denis McAuley III Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 1522-3779

(Notices should be sent to the Agent of Service at above address)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Federated Shareholder Federated Investors Tower
Services Company 1001 Liberty Avenue

("Transfer Agent and Dividend Pittsburgh, PA 15222-3779
Disbursing Agent")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Federated Investment Management Federated Investors Tower
Company ("Adviser") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600

ITEM 29. MANAGEMENT SERVICES:

Not applicable.

ITEM 30. UNDERTAKINGS:

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant, Federated Core Trust, has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of Pittsburgh and Commonwealth of Pennsylvania, on the 29th day of February
2000.

FEDERATED CORE TRUST

BY: /s/ C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue

February 29, 2000

Exhibit o(i) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretaries of _FEDERATED CORE TRUST ___ and each of
them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 19 11 11,
the Securities Exchange Act of 19 114 and the Investment Company Act of 1940, by
means of the Securities and Exchange Commission's electronic disclosure system
known as EDGAR; and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to sign and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ JOHN F. DONAHUE Chairman and Trustee February 11, 2000
------------------
John F. Donahue (Chief Executive Officer)

/S/ J. CHRISTOPHER DONAHUE

J. Christopher Donahue President February 11, 2000

/S/ RICHARD J. THOMAS Treasurer February 11, 2000
- ---------------------
Richard J. Thomas (Principal Financial and
Accounting Officer)

/S/ T. G. BIGLEY Trustee February 11, 2000
- ----------------
Thomas G. Bigley

/S/ JOHN T. CONROY Trustee February 11, 2000
-----------------
John T. Conroy

/S/ LAWRENCE D. ELLIS Trustee February 11, 2000
- ---------------------
Lawrence D. Ellis

/S/ PETER E. MADDEN Trustee February 11, 2000
- -------------------
Peter E. Madden

/S/ JOHN E. MURRAY Trustee February 11, 2000
- ------------------
John E. Murray, Jr.

/S/ MARJORIE P. SMUTS Trustee February 11, 2000
- ---------------------
Marjorie P. Smuts

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ J. THOMAS MADDEN Chief Investment Officer February 11, 2000
-------------------
J. Thomas Madden

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ J. THOMAS MADDEN Chief Investment Officer February 11, 2000
-------------------
J. Thomas Madden

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ WILLIAM D. DAWSON Chief Investment Officer February 11, 2000
--------------------
William D. Dawson, III

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ NICHOLAS P. CONTANTAKIS Trustee February 11, 2000
--------------------------
Nicholas P. Constantakis

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ JOHN S. WALSH Trustee February 11, 2000
----------------
John S. Walsh

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ CHARLES F. MANSFIELD Trustee February 11, 2000
-----------------------
Charles F. Mansfield

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ JOHN F. CUNNINGHAM Trustee February 11, 2000
--------------------------
John F. Cunningham

Sworn to and subscribed before me this _ 16TH___ day of _FEBRUARY, 2000
----- ---------

/s/ Janice L. Berger

- ----------------------------------------------------
Janice L. Berger
Notary Public

Notarial Seal
Janice L. Berger, Notary Public

Pittsburgh, Allegheny County
My Commission expires July 4, 2000
Member, Pennsylvania Association of Notaries