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Federated Investors
World-Class Investment Manager
John F. Donahue
Chairman
Federated Stock and Bond Fund, Inc.
Dear Shareholder:
I am pleased to present the Semi-Annual Report for Federated Stock and Bond Fund, Inc. This balanced fund had its origin in the Income Foundation Fund, which was created in the mid-1930s. For over six decades, the fund has maintained a balanced position with high-quality stocks and various grades of bonds--both U.S. government and corporate issues.
The report covers the six-month period from November 1, 1999 through April 30, 2000. First, you will find a discussion with the fund's co-portfolio managers, John Harris, Vice President, and Joseph Balestrino, Senior Vice President, both of Federated Investment Management Company. Following their discussions, which detail both the stock and bond markets and the fund's strategies, are a series of performance charts, a complete listing of the fund's holdings and the financial statements.
Federated Stock and Bond Fund, Inc. is managed to help you participate in two fundamental financial markets. This diversification between stocks and bonds helps provide a degree of protection of your capital in uncertain economic times as you pursue growth of capital and income. The fund's balanced portfolio of more than 160 stocks and bond issues reflects an emphasis on diversification and quality. At the end of the reporting period, approximately 56% of the fund's assets were allocated to stocks.
Amid a stock market that favored growth over value and a negative bond market due to a higher interest rate environment, the fund produced a slightly negative total return, though shareholders received good income distributions. Individual share class total return performance, including capital gains and income dividends, follows.1
|
|
|
Total Return |
|
Income |
|
Capital Gains |
|
Net Asset Value Decline |
|
Class A Shares |
|
(0.08%) |
|
$0.27 |
|
$0.42 |
|
$18.71 to $18.00 = (3.79%) |
|
Class B Shares |
|
(0.51%) |
|
$0.20 |
|
$0.42 |
|
$18.68 to $17.96 = (3.85%) |
|
Class C Shares |
|
(0.46%) |
|
$0.20 |
|
$0.42 |
|
$18.63 to $17.92 = (3.81%) |
1 Performance quoted is based on net asset value, represents past performance, and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total returns for the fund's Class A, B and C Shares based on offering price (i.e., less any applicable sales charge) were (5.58%), (5.80%), and (1.42%), respectively.
Thank you for participating in the growth and income potential of Federated Stock and Bond Fund, Inc. Remember, if you are not already doing so, it is easy to increase your participation in the performance potential of this diversified stock and bond portfolio by reinvesting your quarterly dividends automatically in additional fund shares.
As always, we welcome your comments, questions and suggestions.
Sincerely,
John F. Donahue
John F. Donahue
Chairman
June 15, 2000
John Harris
Vice President
Federated Investment Management Company
Joseph Balestrino
Senior Vice President
Federated Investment Management Company
The six-month reporting period ended April 30, 2000 provided equity investors with a volatile, although positive, period of returns as evidenced by the Standard & Poor's 500 ("S&P 500") Index,1 which returned 7.2%.
Technology shares continued to shine as investors poured money into the sector. The performance of the technology issues masked the weakness present in the rest of the market as only three of eleven sectors--technology, capital goods, and utilities--outperformed the S&P 500 Index during the six-month reporting period. In fact, just five stocks--Cisco (up 87%), Intel (up 64%), Oracle (up 236%), Nortel (up 81%) and Hewlett-Packard (up 82%)--accounted for the entire return of the S&P 500 Index during the reporting period. However, a divergence occurred among technology sector holdings over the past few months, as investors shunned Internet companies and sought out less speculative companies providing infrastructure for telecommunications and Internet buildout.
1 The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index.
Driven by a relative weakness in the basic materials, transportation and financial sectors, the fund's reporting period was a difficult one for value-oriented managers. For example, the Russell 1000 Value Index2 declined (1.0%) for the six-month reporting period that ended April 30, 2000, as investors continued to seek out less discovered names with better growth prospects and were willing to chase performance without regard to valuation. The valuation disparities between the market leaders and the rest of the world presented value-oriented buyers with many attractive opportunities--the average stock in the S&P 500 Index traded at 27.8 times earnings, while the average S&P 500 Index technology stock traded at 47.4 times earnings.
The stock portion of the fund declined (0.09%) for the reporting period and the leading sectors were: technology (up 36.4%), capital goods (up 10.8%) and utilities (up 8.7%). Lagging sectors included: financial (down 7.5%), basic materials (down 7.6%) and transportation (down 9.3%).
Positive influences on performance for the reporting period included favorable performance in the consumer cyclical sector (News Corp., 1.03% of portfolio, and TRW, Inc., 0.29% of portfolio), energy sector (ENSCO International, 0.83% of portfolio, and Tosco Corp., 0.61% of portfolio) and the communication services sector (Bell South, 0.78% of portfolio, and U.S. West, 1.04% of portfolio). More than offsetting these favorable influences were an underweight position and unfavorable security performance in the technology sector (Novell, Inc., 0.45% of portfolio, Unisys Corp., 0.48% of portfolio, and Eastman Kodak Co., 0.39% of portfolio), as well as unfavorable security performance in the utility sector (Entergy Corp., 0.66% of portfolio, and Public Service Enterprises Group, Inc., 0.57% of portfolio) and the finance sector (Conseco, Inc., 0.39% of portfolio and Loews Corp., 0.55% of portfolio).
The U.S. bond market's total return performance for the reporting period, as represented by the Lehman Brothers Government/Corporate Total Bond Index,3 was up a modest 1.51%, reflecting the negative price effect of a rising interest rate environment. Over the fund's six-month reporting period, the U.S. economy grew at a rate that was generally faster than expectations, causing the Federal Reserve Board (the "Fed") to continue the interest rate hikes which it had started in mid-1999. As a result, interest rates rose for all treasury maturities out to ten years. The longest maturity U.S. government bonds (i.e., 20-30 years) experienced interest rate declines due to the U.S. treasury announcing and executing a series of debt buybacks, using proceeds from the U.S. budget surplus. This had the effect of increasing demand and raising the prices for long maturity bonds. Thus, over the reporting period, short-to-intermediate yields rose, while long maturity yields fell to the degree that the yield curve became fully "inverted" (the absolute yield levels became lower as maturity increased). Historically, an inverted yield curve has proven to be a sign of coming economic weakness.
2 The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The index is unmanaged and investments cannot be made in an index.
3 Lehman Brothers Government/Corporate Total Bond Index is an unmanaged index of approximately 5,000 issues which include non-convertible bonds publicly issued by the U.S. government or its agencies; corporate bonds guaranteed by the U.S. government and quasi-federal corporations; and publicly issued, fixed-rate, non-convertible, domestic bonds of companies in industry, public utilities, and finance. The index is tracked by Lehman Brothers, Inc. Investments cannot be made in an index.
In terms of bond performance, higher rates for most maturities resulted in price declines and modest positive returns for most high-quality sectors. Pure U.S. treasuries represented the best relative performing sector, with the prominent "spread" sectors (mortgages, corporates) underperforming treasuries.
For the six-month reporting period, the fund's A, B, and C Share classes produced total returns of (0.08%), (0.51%), and (0.46%), respectively, based on net asset value.4 These returns were less than the 5.47% total return of the average balanced fund as represented by the Lipper Balanced Funds Average.5
Recent stock additions include the following companies:
Cendant Corp. (0.49% of net assets): Cendant is the world's leading franchiser of hotels and real estate brokerage offices. Trading at 18 times this year's earnings, the stock's valuation appears attractive on our valuation disciplines and the problems of two years ago have been resolved. The management team is focused on creating shareholder value.
PNC Bank Corp. (0.64% of net assets): We purchased PNC when it was trading at nine times this year's earnings. Company fundamentals are improving and the company is transforming itself into a high-fee income bank, but with the valuation of a spread income bank. This valuation gap, compared to other high quality peers, should close as investors understand the transformation going on at the company.
TRW, Inc. (0.29% of net assets): We acquired TRW after they had been unjustly beaten down by other auto parts suppliers. We believe the company's investments in technology--specifically telecommunications and Internet security--have the potential for future initial public offerings, which will unlock hidden value.
No dramatic duration changes were made over the fund's six-month reporting period. The bond portion of the fund more gradually decreased its average maturity/duration from start to finish within a period of rising rates.
4 Performance quoted is based on net asset value, represents past performance, and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total returns for the fund's Class A, B and C Shares based on offering price (i.e., less any applicable sales charge) were (5.58%), (5.80%), and (1.42%), respectively.
5 Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling into the category indicated. Lipper returns do not take sales charges into account.
The top ten holdings and sector weightings were as follows:
|
Name |
|
Percentage of |
|
Sun Microsystems, Inc. |
|
2.49% |
|
First Data Corp. |
|
1.87% |
|
Kimberly-Clark Corp. |
|
1.85% |
|
U.S. West, Inc. |
|
1.84% |
|
Morgan Stanley, Dean Witter & Co. |
|
1.84% |
|
News Corp. Ltd., ADR |
|
1.81% |
|
International Business Machines Corp. |
|
1.79% |
|
Viacom, Inc., Class A |
|
1.73% |
|
Koninklijke (Royal) Philips Electronics NV, ADR |
|
1.73% |
|
Pharmacia & Upjohn, Inc. |
|
1.73% |
|
TOTAL |
|
18.68% |
|
Sector |
|
Percentage of |
|
Percentage of |
|
Financial |
|
18.8% |
|
12.9% |
|
Technology |
|
16.7% |
|
32.0% |
|
Consumer Cyclicals |
|
12.2% |
|
8.3% |
|
Capital Goods |
|
10.6% |
|
8.6% |
|
Health Care |
|
9.8% |
|
10.1% |
|
Consumer Staples |
|
8.7% |
|
10.2% |
|
Energy |
|
8.6% |
|
5.3% |
|
Communication Services |
|
6.7% |
|
7.3% |
|
Utilities |
|
5.3% |
|
2.6% |
|
Basic Materials |
|
1.6% |
|
2.3% |
|
Transportation |
|
1.0% |
|
0.6% |
|
Name |
|
Percentage of |
|
U.S. Treasury Note, 5.875% due 11/15/2004 |
|
10.41% |
|
U.S. Treasury Note, 5.250% due 05/15/2004 |
|
6.61% |
|
U.S. Treasury Note, 5.625% due 05/15/2008 |
|
5.33% |
|
U.S. Treasury Note, 7.875% due 11/15/2004 |
|
5.10% |
|
U.S. Treasury Bond, 6.375% due 08/15/2027 |
|
3.01% |
|
Federal Home Loan Mortgage Corp., 5.750% due 04/15/2008 |
|
2.00% |
|
Shopko Stores Inc., Sr. Note, 9.25% due 03/15/2022 |
|
1.97% |
|
Unisys Corp., Sr. Note, 11.75% due 10/15/2004 |
|
1.92% |
|
Philip Morris Cos., Inc., Deb., 7.45% due 07/15/2001 |
|
1.83% |
|
U.S. Treasury Bond, 11.625% due 11/15/2004 |
|
1.76% |
|
TOTAL |
|
39.94% |
|
|
|
Percentage of |
|
AAA |
|
62.03% |
|
AA |
|
0.68% |
|
A |
|
10.34% |
|
BBB |
|
20.21% |
|
BB |
|
4.82% |
|
B |
|
1.81% |
|
CCC |
|
0.10% |
|
CC |
|
0.01% |
We have reduced our allocation in stocks from a neutral allocation of 60% of total net assets at the beginning of the period to a slightly defensive allocation of 56% of total net assets. Although the U.S. economy continues to exhibit strong growth and corporate profits are surprising on the upside, the risks to the stock market have increased. The Fed has been unequivocal in its belief that the economy is growing too fast for the maintenance of low inflation. On March 21, 2000, the Federal Open Market Committee increased rates for the fifth time in the last ten months. The extraordinary volatility, which has characterized domestic stocks in recent months, reflects investors uncertainty about how far rates will ultimately rise and about what the economic landscape will look like when the tightenings are finally finished. However, we believe our attractively valued stock portfolio could provide more stability for investors during this period.
Federated's outlook on bonds has become more positive, recommending that investors add to the overall fixed-income position within a diversified portfolio. There is a growing belief that the Fed's interest rate hikes to date are having the desired effect of slowing the economy to a more sustainable pace without excessive inflation. In addition, the relative value of the mortgage and corporate bond sectors has also increased given the significant outperformance of pure U.S. treasuries so far in the year 2000. Thus, it is anticipated that returns could improve for most bond sectors going forward.
If you had made an initial investment of $32,000 in the Class A Shares of Federated Stock and Bond Fund, Inc. on 12/31/68, reinvested your dividends and capital gains, and did not redeem any shares, your account would have been worth $430,274 on 4/30/00. You would have earned an 8.62%1 average annual total return for the investment life span.
One key to investing wisely is to reinvest all distributions in fund shares. This increases the number of shares on which you can earn future dividends, and you gain the benefit of compounding.
As of 3/31/00, Class A Shares' average annual 1-year, 5-year, and 10-year total returns were (4.81%), 12.18% and 10.05%, respectively. Class B Shares' average annual 1-year and since inception (8/30/96) total returns were (5.35%) and 11.29%, respectively. Class C Shares' average annual 1-year, 5-year, and since inception (4/19/93) total returns were (1.05%), 12.57% and 10.09%, respectively.2
[Graphic Representation Omitted - See Appendix]
1 Total return represents the change in the value of an investment after reinvesting all income and capital gains, and takes into account the 5.50% sales charge applicable to an initial investment in Class A Shares. Data quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
2 The total returns stated take into account all applicable sales charges. The maximum sales charges and contingent deferred sales charges for the fund are as follows: Class A Shares, 5.50% sales charge; Class B Shares, 5.50% contingent deferred sales charge; Class C Shares, 1.00% contingent deferred sales charge.
$1,000 initial investment and subsequent investments of $1,000 each year for 31 years (reinvesting all dividends and capital gains) grew to $227,779.
With this approach, the key is consistency.
If you had started investing $1,000 annually in the Class A Shares of Federated Stock and Bond Fund, Inc. on 12/31/68, reinvested your dividends and capital gains, and did not redeem any shares, you would have invested only $32,000, but your account would have reached a total value of $227,7791 by 4/30/00. You would have earned an average annual total return of 10.44%.
A practical investment plan helps you pursue long term growth of capital and income through a balanced portfolio of stocks and bonds. Through systematic investing, you buy shares on a regular basis and reinvest all earnings. An investment plan can work for you when you invest only $1,000 annually. You can take it one step at a time. Put time, money and compounding to work.
[Graphic Representation Omitted - See Appendix]
1 This chart assumes that the subsequent annual investments are made on the last day of each anniversary month. No method of investing can guarantee a profit or protect against loss in down markets.
David and Joan Rice are a fictional couple who, like many shareholders, are searching for a way to make their money grow over time.
David and Joan are planning for the college education of their third child. On April 30, 1990, they invested $5,000 in the Class A Shares of Federated Stock and Bond Fund, Inc. Since then, David and Joan have made additional investments of $250 every month.
As this chart shows, over 10 years, the original $5,000 investment along with their additional monthly $250 investments totaling $35,000 has grown to $62,944. This represents a 10.00% average annual total return. For the Rices, a dedicated program of monthly investing has really paid off.
[Graphic Representation Omitted - See Appendix]
This hypothetical scenario is provided for illustrative purposes only and does not represent the result obtained by any particular shareholder. Past performance does not guarantee future results.
APRIL 30, 2000 (UNAUDITED)
|
Shares |
|
|
|
Value |
||
|
|
|
|
COMMON STOCKS--55.6% |
|
|
|
|
|
|
|
Basic Materials--0.9% |
|
|
|
|
|
215,100 |
|
LTV Corp. |
|
$ |
766,294 |
|
|
26,900 |
|
PPG Industries, Inc. |
|
|
1,462,687 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,228,981 |
|
|
||||||
|
|
|
|
Capital Goods--5.9% |
|
|
|
|
|
32,600 |
|
Honeywell International, Inc. |
|
|
1,825,600 |
|
|
31,600 |
|
Ingersoll-Rand Co. |
|
|
1,483,225 |
|
|
27,500 |
|
Johnson Controls, Inc. |
|
|
1,741,094 |
|
|
55,392 |
|
Koninklijke (Royal) Philips Electronics NV, ADR |
|
|
2,471,868 |
|
|
25,300 |
|
Northrop Grumman, Corp. |
|
|
1,793,137 |
|
|
42,000 |
|
Parker-Hannifin Corp. |
|
|
1,953,000 |
|
|
20,700 |
|
Textron, Inc. |
|
|
1,282,106 |
|
|
43,712 |
|
Tyco International, Ltd. |
|
|
2,008,020 |
|
|
34,100 |
|
Waste Management, Inc. |
|
|
541,338 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
15,099,388 |
|
|
||||||
|
|
|
|
Communication Services--3.8% |
|
|
|
|
|
48,250 |
|
AT&T Corp. |
|
|
2,252,672 |
|
|
25,600 |
|
Bell Atlantic Corp. |
|
|
1,516,800 |
|
|
40,000 |
|
BellSouth Corp. |
|
|
1,947,500 |
|
|
18,800 |
|
GTE Corp. |
|
|
1,273,700 |
|
|
36,800 |
|
U.S. West, Inc. |
|
|
2,619,700 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
9,610,372 |
|
|
||||||
|
|
|
|
Consumer Cyclicals--6.8% |
|
|
|
|
|
34,600 |
|
Block (H&R), Inc. |
|
|
1,446,712 |
|
|
80,500 |
1 |
Cendant Corp. |
|
|
1,242,719 |
|
|
89,600 |
|
Cooper Tire & Rubber Co. |
|
|
1,209,600 |
|
|
33,604 |
|
Delphi Automotive |
|
|
642,676 |
|
|
33,000 |
1 |
Federated Department Stores, Inc. |
|
|
1,122,000 |
|
|
30,500 |
|
Ford Motor Co. |
|
|
1,667,969 |
|
|
23,000 |
|
General Motors Corp. |
|
|
2,153,375 |
|
|
58,000 |
|
Hasbro, Inc. |
|
|
924,375 |
|
|
92,400 |
1 |
K Mart Corp. |
|
|
750,750 |
|
|
29,100 |
|
Knight-Ridder, Inc. |
|
|
1,427,719 |
|
Shares |
|
|
|
Value |
||
|
|
|
|
COMMON STOCKS--continued |
|
|
|
|
|
|
|
Consumer Cyclicals--continued |
|
|
|
|
|
58,600 |
|
News Corp. Ltd., ADR |
|
$ |
2,578,400 |
|
|
12,500 |
|
TRW, Inc. |
|
|
731,250 |
|
|
27,500 |
|
Wal-Mart Stores, Inc. |
|
|
1,522,813 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
17,420,358 |
|
|
||||||
|
|
|
|
Consumer Staples--4.9% |
|
|
|
|
|
34,164 |
|
CBS Corp. |
|
|
2,007,135 |
|
|
47,200 |
|
General Mills, Inc. |
|
|
1,716,900 |
|
|
45,500 |
|
Kimberly-Clark Corp. |
|
|
2,641,844 |
|
|
46,900 |
|
Nabisco Group Holdings Corp. |
|
|
603,837 |
|
|
44,000 |
|
Philip Morris Cos., Inc. |
|
|
962,500 |
|
|
82,400 |
|
Sara Lee Corp. |
|
|
1,236,000 |
|
|
53,800 |
|
UST, Inc. |
|
|
807,000 |
|
|
45,100 |
1 |
Viacom, Inc., Class A |
|
|
2,472,044 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
12,447,260 |
|
|
||||||
|
|
|
|
Energy--4.8% |
|
|
|
|
|
1 |
|
Arch Coal, Inc. |
|
|
4 |
|
|
43,600 |
|
Ashland, Inc. |
|
|
1,487,850 |
|
|
17,100 |
|
Chevron Corp. |
|
|
1,455,637 |
|
|
62,600 |
|
ENSCO International, Inc. |
|
|
2,077,537 |
|
|
22,500 |
|
Exxon Mobil Corp. |
|
|
1,747,969 |
|
|
31,400 |
|
Royal Dutch Petroleum Co., ADR |
|
|
1,801,575 |
|
|
18,400 |
|
Texaco, Inc. |
|
|
910,800 |
|
|
47,500 |
|
Tosco Corp. |
|
|
1,522,969 |
|
|
50,700 |
|
USX Corp. |
|
|
1,181,944 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
12,186,285 |
|
|
||||||
|
|
|
|
Financials--10.1% |
|
|
|
|
|
22,950 |
2, 3 |
ABB AB, ADR |
|
|
2,406,078 |
|
|
27,400 |
|
Allmerica Financial Corp. |
|
|
1,483,025 |
|
|
58,000 |
|
Allstate Corp. |
|
|
1,370,250 |
|
|
35,800 |
|
Bank of America Corp. |
|
|
1,754,200 |
|
|
38,078 |
|
Bear Stearns Cos., Inc. |
|
|
1,632,594 |
|
|
19,500 |
|
CIGNA Corp. |
|
|
1,555,125 |
|
|
102,200 |
|
CIT Group, Inc., Class A |
|
|
1,731,012 |
|
|
178,700 |
|
Conseco, Inc. |
|
|
971,681 |
|
|
39,200 |
|
First Union Corp. |
|
|
1,249,500 |
|
Shares |
|
|
|
Value |
||
|
|
|
|
COMMON STOCKS--continued |
|
|
|
|
|
|
|
Financials--continued |
|
|
|
|
|
39,000 |
|
Lincoln National Corp. |
|
$ |
1,357,687 |
|
|
24,900 |
|
Loews Corp. |
|
|
1,372,612 |
|
|
30,500 |
|
MBIA Insurance Corp. |
|
|
1,507,844 |
|
|
14,900 |
|
Marsh & McLennan Cos., Inc. |
|
|
1,468,581 |
|
|
34,100 |
|
Morgan Stanley, Dean Witter & Co. |
|
|
2,617,175 |
|
|
37,500 |
|
PNC Bank Corp. |
|
|
1,635,937 |
|
|
59,500 |
|
Washington Mutual, Inc. |
|
|
1,520,969 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
25,634,270 |
|
|
||||||
|
|
|
|
Health Care--5.5% |
|
|
|
|
|
43,200 |
|
Abbott Laboratories |
|
|
1,660,500 |
|
|
27,300 |
|
Baxter International, Inc. |
|
|
1,777,912 |
|
|
177,200 |
1 |
Beverly Enterprises, Inc. |
|
|
598,050 |
|
|
43,300 |
|
Bristol-Myers Squibb Co. |
|
|
2,270,544 |
|
|
167,000 |
1 |
HEALTHSOUTH, Corp. |
|
|
1,346,437 |
|
|
25,200 |
|
Merck & Co., Inc. |
|
|
1,751,400 |
|
|
49,313 |
|
Pharmacia & Upjohn, Inc. |
|
|
2,462,568 |
|
|
30,800 |
|
United Healthcare Corp. |
|
|
2,053,975 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
13,921,386 |
|
|
||||||
|
|
|
|
Technology--9.4% |
|
|
|
|
|
21,100 |
|
Compaq Computer Corp. |
|
|
617,175 |
|
|
27,200 |
1 |
Computer Sciences Corp. |
|
|
2,218,500 |
|
|
17,400 |
|
Eastman Kodak Co. |
|
|
973,312 |
|
|
34,700 |
|
Electronic Data Systems Corp. |
|
|
2,385,625 |
|
|
54,600 |
|
First Data Corp. |
|
|
2,658,337 |
|
|
60,200 |
|
Galileo International, Inc. |
|
|
1,392,125 |
|
|
22,900 |
|
International Business Machines Corp. |
|
|
2,556,212 |
|
|
18,100 |
1 |
Lexmark Intl. Group, Class A |
|
|
2,135,800 |
|
|
57,800 |
1 |
Novell, Inc. |
|
|
1,134,325 |
|
|
38,300 |
1 |
Seagate Technology, Inc. |
|
|
1,946,119 |
|
|
84,300 |
1 |
Storage Technology Corp. |
|
|
1,095,900 |
|
|
38,600 |
1 |
Sun Microsystems, Inc. |
|
|
3,548,787 |
|
|
51,400 |
1 |
Unisys Corp. |
|
|
1,191,837 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
23,854,054 |
|
|
||||||
|
|
|
|
Transportation--0.5% |
|
|
|
|
|
33,200 |
|
Union Pacific Corp. |
|
|
1,398,550 |
|
|
||||||
|
Shares or |
|
|
|
Value |
||
|
|
|
|
COMMON STOCKS--continued |
|
|
|
|
|
|
|
Utilities--3.0% |
|
|
|
|
|
64,700 |
|
Entergy Corp. |
|
$ |
1,645,806 |
|
|
30,500 |
|
FPL Group, Inc. |
|
|
1,378,219 |
|
|
56,400 |
|
P G & E Corp. |
|
|
1,462,875 |
|
|
40,100 |
|
Public Service Enterprises Group, Inc. |
|
|
1,438,587 |
|
|
63,400 |
|
Reliant Energy, Inc. |
|
|
1,688,025 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
7,613,512 |
|
|
||||||
|
|
|
|
TOTAL COMMON STOCKS (IDENTIFIED COST $121,548,308) |
|
|
141,414,416 |
|
|
||||||
|
|
|
|
PREFERRED STOCKS--0.4% |
|
|
|
|
|
|
|
Financial--0.4% |
|
|
|
|
|
1,000 |
|
Highwoods Properties, Inc., REIT Perpetual Pfd. Stock, Series A, $86.25 |
|
|
695,810 |
|
|
15,802 |
|
TCI Communications, 10.00%, Pfd., $2.50 |
|
|
406,902 |
|
|
||||||
|
|
|
|
TOTAL PREFERRED STOCKS (IDENTIFIED COST $1,415,102) |
|
|
1,102,712 |
|
|
||||||
|
|
|
|
ASSET-BACKED SECURITIES--0.6% |
|
|
|
|
$ |
1,250,000 |
2, 3 |
125 Home Loan Owner Trust 1998-1A, Class B1, 9.26%, 02/15/2029 |
|
|
1,084,960 |
|
|
43,772 |
|
Green Tree Home Equity Loan Trust 1999-A, Class B2A, 7.44%, 02/15/2029 |
|
|
43,833 |
|
|
108,985 |
2, 3 |
Merrill Lynch Mortgage Investors, Inc. 1998-FF3, Class BB, 5.50%, 11/20/2029 |
|
|
103,332 |
|
|
276,432 |
2 |
SMFC Trust Asset-Backed Certificates, Series 1997-A, Class B1-4, 7.3565%, 01/28/2025 |
|
|
231,080 |
|
|
||||||
|
|
|
|
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $1,651,427) |
|
|
1,463,205 |
|
|
||||||
|
|
|
|
CORPORATE BONDS--14.8% |
|
|
|
|
|
|
|
Banking--0.6% |
|
|
|
|
|
500,000 |
2, 3 |
Den Danske Bank Group, Note, 7.40% 6/15/2010 |
|
|
491,050 |
|
|
1,000,000 |
2, 3 |
Regional Diversified Funding, 9.25%, 3/15/2030 |
|
|
992,181 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,483,231 |
|
|
||||||
|
|
|
|
Basic Industry--0.6% |
|
|
|
|
|
1,000,000 |
|
Barrick Gold Corp., Deb., 7.50%, 5/1/2007 |
|
|
986,530 |
|
|
500,000 |
2, 3 |
Normandy Finance Ltd., Company Guarantee, 7.50%, 7/15/2005 |
|
|
454,145 |
|
|
150,000 |
|
Pope & Talbot, Inc., Deb., 8.375%, 6/1/2013 |
|
|
134,895 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,575,570 |
|
|
||||||
|
|
|
|
Chemicals and Plastic--0.1% |
|
|
|
|
|
400,000 |
2, 3 |
Fertinitro Finance, Company Guarantee, 8.29%, 4/01/2020 |
|
|
243,506 |
|
|
||||||
|
|
|
|
Communications Services--0.2% |
|
|
|
|
|
500,000 |
|
LCI International, Inc., Sr. Note, 7.25%, 6/15/2007 |
|
|
475,235 |
|
|
150,000 |
|
Qwest Communications International, Sr. Note, Series B, 7.50%, 11/01/2008 |
|
|
145,313 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
620,548 |
|
|
||||||
|
Principal |
|
|
|
Value |
||
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Consumer Durables--0.4% |
|
|
|
|
$ |
1,000,000 |
|
Arvin Capital, 9.50%, 2/1/2027 |
|
$ |
944,510 |
|
|
||||||
|
|
|
|
Consumer Non-Durables--0.9% |
|
|
|
|
|
125,000 |
|
Meyer (Fred), Inc., Company Guarantee, 7.45%, 3/01/2008 |
|
|
118,233 |
|
|
1,281,000 |
|
Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 |
|
|
1,241,955 |
|
|
1,015,000 |
|
Viacom, Inc., Sr. Deb., 8.25%, 8/01/2022 |
|
|
979,292 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,339,480 |
|
|
||||||
|
|
|
|
Education--0.4% |
|
|
|
|
|
1,000,000 |
|
Boston University, 7.625%, 7/15/2097 |
|
|
901,740 |
|
|
||||||
|
|
|
|
Energy--0.3% |
|
|
|
|
|
750,000 |
|
Sun Co., Inc, 9.00%, 11/1/2024 |
|
|
790,553 |
|
|
||||||
|
|
|
|
Finance--3.3% |
|
|
|
|
|
500,000 |
|
Amvescap PLC, Sr. Note, 6.60%, 5/15/2005 |
|
|
468,560 |
|
|
450,000 |
|
Conseco, Inc., Note, 6.40%, 2/10/2003 |
|
|
284,063 |
|
|
1,000,000 |
|
Conseco, Inc., Sr. Sub. Note, 10.25%, 6/01/2002 |
|
|
642,500 |
|
|
300,000 |
|
Corp Andina De Fomento, Note, 7.75%, 3/01/2004 |
|
|
298,908 |
|
|
1,250,000 |
|
Delphi Financial Group, Inc., 9.31%, 3/25/2027 |
|
|
1,148,338 |
|
|
250,000 |
|
Delphi Financial Group, Inc.,Note, 8.00%, 10/1/2003 |
|
|
243,290 |
|
|
750,000 |
|
FirstBank Puerto Rico, Sub. Note, 7.625%, 12/20/2005 |
|
|
692,880 |
|
|
1,000,000 |
|
Ford Motor Credit Corp., Unsub., 6.875%, 6/05/2001 |
|
|
994,969 |
|
|
500,000 |
|
General Electric Capital Corp., Medium Term Note, 6.65%, 9/03/2002 |
|
|
493,400 |
|
|
700,000 |
|
National Bank of Canada, Sub. Note, 8.125%, 8/15/2004 |
|
|
710,717 |
|
|
1,000,000 |
|
Olympic Financial Ltd., Unit, 11.50%, 3/15/2007 |
|
|
1,122,000 |
|
|
1,000,000 |
2, 3 |
Pemex Finance Ltd., 9.03%, 2/15/2011 |
|
|
1,011,420 |
|
|
375,000 |
|
Provident Cos., Inc., Bond, 7.405%, 3/15/2038 |
|
|
298,965 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
8,410,010 |
|
|
||||||
|
|
|
|
Finance - Insurance--0.6% |
|
|
|
|
|
750,000 |
2, 3 |
Life Re Capital Trust I, Company Guarantee, 8.72%, 6/15/2027 |
|
|
733,680 |
|
|
750,000 |
2, 3 |
Union Central Life Insurance Co., Note, 8.20%, 11/1/2026 |
|
|
722,393 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,456,073 |
|
|
||||||
|
|
|
|
Forest Products--0.5% |
|
|
|
|
|
1,000,000 |
|
Donohue Forest Products, 7.625%, 5/15/2007 |
|
|
986,950 |
|
|
250,000 |
|
Quno Corp., Sr. Note, 9.125%, 5/15/2005 |
|
|
262,508 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,249,458 |
|
|
||||||
|
Principal |
|
|
|
Value |
||
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Health Care--0.4% |
|
|
|
|
$ |
550,000 |
|
Tenet Healthcare Corp., Sr. Note, 8.00%, 1/15/2005 |
|
$ |
528,000 |
|
|
500,000 |
|
Tenet Healthcare Corp., Sr. Sub. Note, 8.125%, 12/01/2008 |
|
|
467,500 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
995,500 |
|
|
||||||
|
|
|
|
Oil & Gas--0.8% |
|
|
|
|
|
1,250,000 |
|
Husky Oil Ltd., Sr. Note, 7.125%, 11/15/2006 |
|
|
1,164,688 |
|
|
750,000 |
2, 3 |
Yosemite Sec. Trust, Bond, 8.25%, 11/15/2004 |
|
|
740,063 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,904,751 |
|
|
||||||
|
|
|
|
Printing & Publishing--0.4% |
|
|
|
|
|
1,000,000 |
|
News America Holdings, Inc., 10.125%, 10/15/2012 |
|
|
1,072,430 |
|
|
||||||
|
|
|
|
Producing Manufacturing--0.4% |
|
|
|
|
|
1,000,000 |
|
Anixter International, Inc., Company Guarantee, 8.00%, 9/15/2003 |
|
|
957,090 |
|
|
||||||
|
|
|
|
Racetrack--0.2% |
|
|
|
|
|
850,000 |
|
International Speedway Corp., 7.875%, 10/15/2004 |
|
|
827,926 |
|
|
||||||
|
|
|
|
Real Estate--0.3% |
|
|
|
|
|
600,000 |
|
Sun Communities, Inc., Medium Term Note, 6.77%, 5/16/2005 |
|
|
554,598 |
|
|
||||||
|
|
|
|
Retail Trade--1.6% |
|
|
|
|
|
500,000 |
|
Dayton-Hudson Corp., Deb., 10.00%, 12/01/2000 |
|
|
508,665 |
|
|
1,123,236 |
|
K Mart Corp., Pass Thru Cert., 8.54%, 1/2/2015 |
|
|
1,056,044 |
|
|
1,000,000 |
|
May Department Stores Co., Deb., 8.125%, 8/15/2035 |
|
|
977,090 |
|
|
250,000 |
|
Sears, Roebuck & Co., Medium Term Note, 10.00%, 2/03/2012 |
|
|
278,795 |
|
|
1,250,000 |
|
Shopko Stores Inc., Sr. Note, 9.25%, 3/15/2022 |
|
|
1,334,550 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
4,155,144 |
|
|
||||||
|
|
|
|
Services--1.1% |
|
|
|
|
|
1,000,000 |
|
Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 |
|
|
1,090,200 |
|
|
1,000,000 |
|
USA Waste Services, Inc., Sr. Note, 7.125%, 10/01/2007 |
|
|
857,320 |
|
|
1,000,000 |
|
WMX Technologies, Inc., Deb., 8.75%, 5/1/2018 |
|
|
881,040 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,828,560 |
|
|
||||||
|
|
|
|
Soveign Government--0.1% |
|
|
|
|
|
250,000 |
|
Quebec, Province of, Deb., 9.125%, 8/22/2001 |
|
|
255,002 |
|
|
||||||
|
|
|
|
Technology--0.5% |
|
|
|
|
|
1,200,000 |
|
Unisys Corp, Sr. Note, 11.75%, 10/15/2004 |
|
|
1,302,000 |
|
|
||||||
|
|
|
|
Telecommunications--0.3% |
|
|
|
|
|
750,000 |
|
MetroNet Escrow Corp., Sr. Note, 10.625%, 11/01/2008 |
|
|
848,438 |
|
|
||||||
|
|
|
|
Transportation--0.1% |
|
|
|
|
|
255,000 |
|
Southwest Airlines Co., Deb., 7.375%, 3/1/2027 |
|
|
246,312 |
|
|
||||||
|
Principal |
|
|
|
Value |
||
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Utilities--0.7% |
|
|
|
|
$ |
750,000 |
2, 3 |
Edison Mission Holding Co., Sr. Secd. Note, 8.734%, 10/01/2026 |
|
$ |
710,925 |
|
|
100,000 |
2, 3 |
Israel Electric Corp. Ltd, Sr. Secd. Note, 7.75%, 3/01/2009 |
|
|
96,034 |
|
|
600,000 |
|
Puget Sound Energy Inc., Medium Term Note, 7.02%, 12/1/2027 |
|
|
516,174 |
|
|
500,000 |
2, 3 |
Tenaga Nasional Berhad, Deb., 7.50%, 1/15/2096 |
|
|
382,185 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,705,318 |
|
|
||||||
|
|
|
|
TOTAL CORPORATE BONDS (IDENTIFIED COST $40,324,432) |
|
|
37,667,748 |
|
|
||||||
|
|
|
|
GOVERNMENT AGENCIES--10.2% |
|
|
|
|
|
|
|
Federal Home Loan Mortgage--0.5% |
|
|
|
|
|
1,500,000 |
|
Federal Home Loan Mortgage Corp., 5.750%, 4/15/2008 |
|
|
1,359,375 |
|
|
||||||
|
|
|
|
Treasury Securities--9.7% |
|
|
|
|
|
400,000 |
|
United States Treasury Bond, 6.125%, 11/15/2027 |
|
|
396,044 |
|
|
2,000,000 |
|
United States Treasury Bond, 6.375%, 8/15/2027 |
|
|
2,043,220 |
|
|
790,000 |
|
United States Treasury Bond, 8.750%, 5/15/2017 |
|
|
986,702 |
|
|
750,000 |
|
United States Treasury Bond, 8.125%, 5/15/2021 |
|
|
909,180 |
|
|
1,000,000 |
|
United States Treasury Bond, 11.625%, 11/15/2004 |
|
|
1,192,250 |
|
|
4,700,000 |
|
United States Treasury Note, 5.250%, 5/15/2004 |
|
|
4,482,108 |
|
|
3,800,000 |
|
United States Treasury Note, 5.625%, 5/15/2008 |
|
|
3,611,976 |
|
|
7,250,000 |
|
United States Treasury Note, 5.875%, 11/15/2004 |
|
|
7,059,108 |
|
|
500,000 |
|
United States Treasury Note, 6.125%, 12/31/2001 |
|
|
495,745 |
|
|
3,300,000 |
|
United States Treasury Note, 7.875%, 11/15/2004 |
|
|
3,461,535 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
24,637,868 |
|
|
||||||
|
|
|
|
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $27,159,984) |
|
|
25,997,243 |
|
|
||||||
|
|
|
|
MUNICIPALS--1.1% |
|
|
|
|
|
500,000 |
|
Atlanta & Fulton County, GA, Recreation Authority, Taxable Revenue Bonds, Series 1997, 7.00% (Downtown Arena Project)/(FSA INS) 12/01/2028 |
|
|
447,035 |
|
|
1,000,000 |
|
Harvard University, MA, Revenue Bonds, 8.125%, 4/15/2007 |
|
|
1,033,380 |
|
|
1,000,000 |
|
Kansas City, MO, Redevelopment Authority, Taxable, 7.65% Bonds (FSA LOC), 11/01/2018 |
|
|
971,020 |
|
|
250,000 |
|
McKeesport, PA, Taxable GO, Series B 1997, 7.30% Bonds (MBIA INS), 3/01/2020 |
|
|
232,535 |
|
|
||||||
|
|
|
|
TOTAL MUNICIPALS (IDENTIFIED COST $2,798,005) |
|
|
2,683,970 |
|
|
||||||
|
Principal |
|
|
|
Value |
||
|
|
|
|
MUTUAL FUNDS--15.5% |
|
|
|
|
$ |
3,932,800 |
|
Federated Mortgage Core Portfolio |
|
$ |
37,243,616 |
|
|
284,918 |
|
Federated High Yield Bond Portfolio |
|
|
2,319,233 |
|
|
||||||
|
|
|
|
TOTAL MUTUAL FUNDS (IDENTIFIED COST $41,016,535) |
|
|
39,562,849 |
|
|
||||||
|
|
|
|
REPURCHASE AGREEMENT--0.4%4 |
|
|
|
|
|
940,000 |
|
Salomon Brothers, Inc., 5.85%, dated 4/28/2000, due 5/1/2000 (at amortized cost) |
|
|
940,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (IDENTIFIED COST $236,853,793)5 |
|
$ |
250,832,143 |
|
|
||||||
1 Non-income producing security.
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. At April 30, 2000, these securities amounted to $10,403,032 which represents 4.1% of net assets. Included in these amounts, securities which have been deemed liquid amounted to $10,171,952 which represents 4.0% of net assets.
3 Denotes a restricted security that has been deemed liquid by criteria approved by the fund's Board of Directors.
4 The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investments in the repurchase agreement is through participation in a joint account with other Federated funds.
5 The cost of investments for federal tax purposes amounts to $236,853,793. The net unrealized appreciation of investments on a federal tax basis amounts to $13,978,350 which is comprised of $38,532,670 appreciation and $24,554,320 depreciation at April 30, 2000.
Note: The categories of investments are shown as a percentage of net assets ($254,449,153) at April 30, 2000.
The following acronyms are used throughout this portfolio:
|
ADR |
--American Depositary Receipt |
|
FSA |
--Financial Security Assurance |
|
GO |
--General Obligations |
|
INS |
--Insured |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
REIT |
--Real Estate Investment Trust |
See Notes which are an integral part of the Financial Statements
APRIL 30, 2000 (UNAUDITED)
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at value (identified and tax cost $236,853,793) |
|
|
|
|
$ |
250,832,143 |
|
Income receivable |
|
|
|
|
|
2,208,470 |
|
Receivable for investments sold |
|
|
|
|
|
1,510,942 |
|
Receivable for shares sold |
|
|
|
|
|
304,456 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
254,856,011 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for investments purchased |
|
$ |
79,420 |
|
|
|
|
Payable for shares redeemed |
|
|
53,410 |
|
|
|
|
Payable to bank |
|
|
235,170 |
|
|
|
|
Accrued expenses |
|
|
38,858 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
406,858 |
|
|
||||||
|
Net assets for 14,147,175 shares outstanding |
|
|
|
|
$ |
254,449,153 |
|
|
||||||
|
Net Assets Consist of: |
|
|
|
|
|
|
|
Paid-in capital |
|
|
|
|
$ |
238,965,583 |
|
Net unrealized appreciation of investments |
|
|
|
|
|
13,978,350 |
|
Accumulated net realized gain on investments |
|
|
|
|
|
900,018 |
|
Undistributed net investment income |
|
|
|
|
|
605,202 |
|
|
||||||
|
TOTAL NET ASSETS |
|
|
|
|
$ |
254,449,153 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
Net Asset Value Per Share ($184,953,314 ÷ 10,275,439 shares outstanding) |
|
|
|
|
|
$18.00 |
|
|
||||||
|
Offering Price Per Share (100/94.50 of $18.00)1 |
|
|
|
|
|
$19.05 |
|
|
||||||
|
Redemption Proceeds Per Share |
|
|
|
|
|
$18.00 |
|
|
||||||
|
Class B Shares: |
|
|
|
|
|
|
|
Net Asset Value Per Share ($48,555,667 ÷ 2,703,303 shares outstanding) |
|
|
|
|
|
$17.96 |
|
|
||||||
|
Offering Price Per Share |
|
|
|
|
|
$17.96 |
|
|
||||||
|
Redemption Proceeds Per Share (94.50/100 of $17.96)1 |
|
|
|
|
|
$16.97 |
|
|
||||||
|
Class C Shares: |
|
|
|
|
|
|
|
Net Asset Value Per Share ($20,940,172 ÷ 1,168,433 shares outstanding) |
|
|
|
|
|
$17.92 |
|
|
||||||
|
Offering Price Per Share |
|
|
|
|
|
$17.92 |
|
|
||||||
|
Redemption Proceeds Per Share (99/100 of $17.92)1 |
|
|
|
|
|
$17.74 |
|
|
||||||
1 See "What Do Shares Cost?" in the Prospectus.
See Notes which are an integral part of the Financial Statements
SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
|
Investment Income: |
|
|
|
|
|
|
|
|
|
Dividends (net of foreign taxes withheld of $12,459) |
|
|
|
|
|
$ |
3,039,128 |
|
|
Interest |
|
|
|
|
|
|
2,698,209 |
|
|
|
||||||||
|
TOTAL INCOME |
|
|
|
|
|
|
5,737,337 |
|
|
|
||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
$ |
1,036,632 |
|
|
|
|
|
|
Administrative personnel and services fee |
|
|
101,501 |
|
|
|
|
|
|
Custodian fees |
|
|
8,271 |
|
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
143,239 |
|
|
|
|
|
|
Directors'/Trustees' fees |
|
|
5,875 |
|
|
|
|
|
|
Auditing fees |
|
|
6,747 |
|
|
|
|
|
|
Legal fees |
|
|
1,295 |
|
|
|
|
|
|
Portfolio accounting fees |
|
|
47,351 |
|
|
|
|
|
|
Distribution services fee--Class B Shares |
|
|
190,277 |
|
|
|
|
|
|
Distribution services fee--Class C Shares |
|
|
82,633 |
|
|
|
|
|
|
Shareholder services fee--Class A Shares |
|
|
245,929 |
|
|
|
|
|
|
Shareholder services fee--Class B Shares |
|
|
63,426 |
|
|
|
|
|
|
Shareholder services fee--Class C Shares |
|
|
27,546 |
|
|
|
|
|
|
Share registration costs |
|
|
26,695 |
|
|
|
|
|
|
Printing and postage |
|
|
21,910 |
|
|
|
|
|
|
Taxes |
|
|
8,860 |
|
|
|
|
|
|
Miscellaneous |
|
|
8,199 |
|
|
|
|
|
|
|
||||||||
|
TOTAL EXPENSES |
|
|
2,026,386 |
|
|
|
|
|
|
|
||||||||
|
Fees paid indirectly from directed broker arrangements |
|
|
(105 |
) |
|
|
|
|
|
|
||||||||
|
Net expenses |
|
|
|
|
|
|
2,026,281 |
|
|
|
||||||||
|
Net investment income |
|
|
|
|
|
|
3,711,056 |
|
|
|
||||||||
|
Realized and Unrealized Gain (Loss) on Investments: |
|
|
|
|
|
|
|
|
|
Net realized gain on investments |
|
|
|
|
|
|
3,486,200 |
|
|
Net change in unrealized appreciation of investments |
|
|
|
|
|
|
(8,205,868 |
) |
|
|
||||||||
|
Net realized and unrealized loss on investments |
|
|
|
|
|
|
(4,719,668 |
) |
|
|
||||||||
|
Change in net assets resulting from operations |
|
|
|
|
|
$ |
(1,008,612 |
) |
|
|
||||||||
See Notes which are an integral part of the Financial Statements
|
|
|
Six Months |
|
|
Year Ended |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
3,711,056 |
|
|
$ |
7,255,958 |
|
|
Net realized gain on investments ($3,486,200 and $6,415,282, respectively, as computed for federal tax purposes) |
|
|
3,486,200 |
|
|
|
4,000,426 |
|
|
Net change in unrealized appreciation of investments |
|
|
(8,205,868 |
) |
|
|
(903,649 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS |
|
|
(1,008,612 |
) |
|
|
10,352,735 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Class A Shares |
|
|
(2,957,600 |
) |
|
|
(5,762,612 |
) |
|
Class B Shares |
|
|
(580,075 |
) |
|
|
(781,333 |
) |
|
Class C Shares |
|
|
(251,287 |
) |
|
|
(316,455 |
) |
|
Distributions from net realized gains on investments |
|
|
|
|
|
|
|
|
|
Class A Shares |
|
|
(4,708,698 |
) |
|
|
(9,293,762 |
) |
|
Class B Shares |
|
|
(1,198,184 |
) |
|
|
(1,272,602 |
) |
|
Class C Shares |
|
|
(505,642 |
) |
|
|
(512,145 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS |
|
|
(10,201,486 |
) |
|
|
(17,938,909 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
38,286,340 |
|
|
|
140,639,815 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
8,972,996 |
|
|
|
15,292,348 |
|
|
Cost of shares redeemed |
|
|
(65,123,921 |
) |
|
|
(97,770,656 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(17,864,585 |
) |
|
|
58,161,507 |
|
|
|
||||||||
|
Change in net assets |
|
|
(29,074,683 |
) |
|
|
50,575,333 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
283,523,836 |
|
|
|
232,948,503 |
|
|
|
||||||||
|
End of period (including undistributed net investment income of $605,202 and $683,108, respectively) |
|
$ |
254,449,153 |
|
|
$ |
283,523,836 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
|||||||||||||
|
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
1995 |
|
|
Net Asset Value, Beginning |
|
$18.71 |
|
|
$19.14 |
|
|
$20.46 |
|
|
$18.96 |
|
|
$18.38 |
|
|
$16.25 |
|
|
Income From |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.27 |
|
|
0.55 |
|
|
0.65 |
|
|
0.63 |
|
|
0.61 |
|
|
0.63 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.29 |
) |
|
0.45 |
|
|
1.37 |
|
|
3.34 |
|
|
1.81 |
|
|
2.21 |
|
|
|
||||||||||||||||||
|
TOTAL FROM |
|
(0.02 |
) |
|
1.00 |
|
|
2.02 |
|
|
3.97 |
|
|
2.42 |
|
|
2.84 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.27 |
) |
|
(0.53 |
) |
|
(0.69 |
) |
|
(0.56 |
) |
|
(0.63 |
) |
|
(0.62 |
) |
|
Distributions from net realized gain on investments |
|
(0.42 |
) |
|
(0.90 |
) |
|
(2.65 |
) |
|
(1.91 |
) |
|
(1.21 |
) |
|
(0.09 |
) |
|
|
||||||||||||||||||
|
TOTAL DISTRIBUTIONS |
|
(0.69 |
) |
|
(1.43 |
) |
|
(3.34 |
) |
|
(2.47 |
) |
|
(1.84 |
) |
|
(0.71 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$18.00 |
|
|
$18.71 |
|
|
$19.14 |
|
|
$20.46 |
|
|
$18.96 |
|
|
$18.38 |
|
|
|
||||||||||||||||||
|
Total Return1 |
|
(0.08 |
%) |
|
5.35 |
% |
|
11.09 |
% |
|
23.02 |
% |
|
14.57 |
% |
|
17.99 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
1.30 |
%2 |
|
1.25 |
% |
|
1.25 |
% |
|
1.21 |
% |
|
1.10 |
% |
|
1.07 |
% |
|
|
||||||||||||||||||
|
Net investment income |
|
2.95 |
%2 |
|
2.85 |
% |
|
3.30 |
% |
|
3.06 |
% |
|
3.44 |
% |
|
3.71 |
% |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement3 |
|
-- |
|
|
-- |
|
|
0.07 |
% |
|
0.16 |
% |
|
0.27 |
% |
|
0.31 |
% |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$184,953 |
|
$209,985 |
|
$196,149 |
|
$162,780 |
|
$130,694 |
|
$134,669 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
19 |
% |
|
46 |
% |
|
53 |
% |
|
87 |
% |
|
74 |
% |
|
68 |
% |
|
|
||||||||||||||||||
1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
2 Computed on an annualized basis.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
||||||||||
|
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
1 |
|
Net Asset Value, Beginning of Period |
|
$18.68 |
|
|
$19.10 |
|
|
$20.45 |
|
|
$18.96 |
|
|
$17.89 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.20 |
|
|
0.42 |
|
|
0.50 |
|
|
0.51 |
|
|
0.02 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.30 |
) |
|
0.45 |
|
|
1.37 |
|
|
3.34 |
|
|
1.05 |
|
|
|
|||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
(0.10 |
) |
|
0.87 |
|
|
1.87 |
|
|
3.85 |
|
|
1.07 |
|
|
|
|||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.20 |
) |
|
(0.39 |
) |
|
(0.57 |
) |
|
(0.45 |
) |
|
-- |
|
|
Distributions from net realized gain on investments |
|
(0.42 |
) |
|
(0.90 |
) |
|
(2.65 |
) |
|
(1.91 |
) |
|
-- |
|
|
|
|||||||||||||||
|
TOTAL DISTRIBUTIONS |
|
(0.62 |
) |
|
(1.29 |
) |
|
(3.22 |
) |
|
(2.36 |
) |
|
-- |
|
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$17.96 |
|
|
$18.68 |
|
|
$19.10 |
|
|
$20.45 |
|
|
$18.96 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
(0.51 |
%) |
|
4.63 |
% |
|
10.26 |
% |
|
22.20 |
% |
|
5.98 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
2.05 |
%3 |
|
2.00 |
% |
|
2.00 |
% |
|
1.96 |
% |
|
1.96 |
%3 |
|
|
|||||||||||||||
|
Net investment income |
|
2.21 |
%3 |
|
2.10 |
% |
|
2.55 |
% |
|
2.31 |
% |
|
3.52 |
%3 |
|
|
|||||||||||||||
|
Expense waiver/reimbursement4 |
|
-- |
|
|
-- |
|
|
0.07 |
% |
|
0.16 |
% |
|
0.15 |
%3 |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$48,556 |
|
$53,154 |
|
$26,487 |
|
$4,622 |
|
$94 |
|
||||
|
|
|||||||||||||||
|
Portfolio turnover |
|
19 |
% |
|
46 |
% |
|
53 |
% |
|
87 |
% |
|
74 |
% |
|
|
|||||||||||||||
1 Reflects operations for the period from August 30, 1996 (date of initial public investment) to October 31, 1996.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
||||||||||
|
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
1 |
|
Net Asset Value, Beginning of Period |
|
$18.63 |
|
|
$19.07 |
|
|
$20.42 |
|
|
$18.96 |
|
|
$17.89 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.20 |
|
|
0.42 |
|
|
0.50 |
|
|
0.47 |
|
|
0.04 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.29 |
) |
|
0.43 |
|
|
1.37 |
|
|
3.35 |
|
|
1.03 |
|
|
|
|||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
(0.09 |
) |
|
0.85 |
|
|
1.87 |
|
|
3.82 |
|
|
1.07 |
|
|
|
|||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.20 |
) |
|
(0.39 |
) |
|
(0.57 |
) |
|
(0.45 |
) |
|
-- |
|
|
Distributions from net realized gain on investments |
|
(0.42 |
) |
|
(0.90 |
) |
|
(2.65 |
) |
|
(1.91 |
) |
|
-- |
|
|
|
|||||||||||||||
|
TOTAL DISTRIBUTIONS |
|
(0.62 |
) |
|
(1.29 |
) |
|
(3.22 |
) |
|
(2.36 |
) |
|
-- |
|
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$17.92 |
|
|
$18.63 |
|
|
$19.07 |
|
|
$20.42 |
|
|
$18.96 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
(0.46 |
%) |
|
4.52 |
% |
|
10.21 |
% |
|
22.08 |
% |
|
5.98 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
2.05 |
%3 |
|
2.00 |
% |
|
2.00 |
% |
|
1.96 |
% |
|
2.03 |
%3 |
|
|
|||||||||||||||
|
Net investment income |
|
2.21 |
%3 |
|
2.10 |
% |
|
2.55 |
% |
|
2.31 |
% |
|
1.94 |
%3 |
|
|
|||||||||||||||
|
Expense waiver/reimbursement4 |
|
-- |
|
|
-- |
|
|
0.07 |
% |
|
0.16 |
% |
|
0.15 |
%3 |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$20,940 |
|
$20,385 |
|
$10,312 |
|
$1,114 |
|
$2 |
|
||||
|
|
|||||||||||||||
|
Portfolio turnover |
|
19 |
% |
|
46 |
% |
|
53 |
% |
|
87 |
% |
|
74 |
% |
|
|
|||||||||||||||
1 Reflects operations for the period from August 30, 1996 (date of initial public investment) to October 31, 1996.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
APRIL 30, 2000 (UNAUDITED)
Federated Stock and Bond Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund offers three classes of shares: Class A Shares, Class B Shares and Class C Shares. The investment objective of the Fund is to provide safety of capital with the possibility of long-term growth of capital and income.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
Municipal bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue, and any other factors or market data the pricing service deems relevant. U.S. government securities, listed corporate bonds, (other fixed income and asset-backed securities), and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Listed equity securities are valued at the last sale price reported on a national securities exchange. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in the other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at their fair value as determined in good faith using methods approved by the Board of Directors (the "Directors").
It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.
The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Directors. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investments companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined by the Fund's pricing committee.
Additional information on each restricted security held at April 30, 2000 is as follows:
|
Security |
|
Acquisition |
|
Acquisition |
|
SMFC Trust Asset-Backed Certificates |
|
2/4/1998 |
|
$252,063 |
|
|
||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
At April 30, 2000, par value shares ($0.001 per share) authorized were as follows:
|
Share Class Name |
|
Number of |
|
Class A Shares |
|
750,000,000 |
|
Class B Shares |
|
500,000,000 |
|
Class C Shares |
|
500,000,000 |
|
TOTAL |
|
1,750,000,000 |
Transactions in capital stock were as follows:
|
|
|
Six Months Ended |
|
|
Year Ended |
|
||||||||
|
Class A Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
1,414,841 |
|
|
$ |
25,468,843 |
|
|
4,882,384 |
|
|
$ |
93,719,414 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
369,846 |
|
|
|
6,623,123 |
|
|
675,624 |
|
|
|
12,630,340 |
|
|
Shares redeemed |
|
(2,732,683 |
) |
|
|
(48,940,932 |
) |
|
(4,583,925 |
) |
|
|
(86,666,074 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS A |
|
(947,996 |
) |
|
$ |
(16,848,966 |
) |
|
974,083 |
|
|
$ |
19,683,680 |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Year Ended |
|
||||||||
|
Class B Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
353,222 |
|
|
$ |
6,380,828 |
|
|
1,752,255 |
|
|
$ |
33,582,244 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
89,967 |
|
|
|
1,611,121 |
|
|
99,272 |
|
|
|
1,855,955 |
|
|
Shares redeemed |
|
(585,832 |
) |
|
|
(10,496,821 |
) |
|
(392,142 |
) |
|
|
(7,502,838 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS B |
|
(142,643 |
) |
|
$ |
(2,504,872 |
) |
|
1,459,385 |
|
|
$ |
27,935,361 |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Year Ended |
|
||||||||
|
Class C Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
356,309 |
|
|
$ |
6,436,669 |
|
|
698,217 |
|
|
$ |
13,338,157 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
41,342 |
|
|
|
738,752 |
|
|
43,196 |
|
|
|
806,053 |
|
|
Shares redeemed |
|
(323,281 |
) |
|
|
(5,686,168 |
) |
|
(188,043 |
) |
|
|
(3,601,744 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS C |
|
74,370 |
|
|
$ |
1,489,253 |
|
|
553,370 |
|
|
$ |
10,542,466 |
|
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(1,016,269 |
) |
|
$ |
(17,864,585 |
) |
|
2,986,838 |
|
|
$ |
58,161,507 |
|
|
|
||||||||||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to (a) a maximum of 0.55% of the average daily net assets of the Fund, and (b) 4.50% of the gross income of the Fund, excluding capital gains or losses.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC:
|
Share Class Name |
|
Percentage of |
|
Class A Shares |
|
0.25% |
|
Class B Shares |
|
0.75% |
|
Class C Shares |
|
0.75% |
For the period ended April 30, 2000, Class A Shares did not incur a distribution services fee.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
The Fund directs certain portfolio trades to a broker that, in turn, pays a portion of the Fund's operating expenses. For the period, the Fund's expenses were reduced by $105 under these arrangements.
Certain of the Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.
Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended April 30, 2000, were as follows:
|
Purchases |
|
$ |
50,086,657 |
|
|
|||
|
Sales |
|
$ |
71,422,003 |
|
|
|||
President
Chief Investment Officer
Executive Vice President
Executive Vice President
Executive Vice President and Secretary
Vice President
Treasurer
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information.
Federated
World-Class Investment Manager
SEMI-ANNUAL REPORT
AS OF APRIL 30, 2000
Incorporated 1934
Federated
Federated Stock and Bond Fund, Inc.
Federated Investors
Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Cusip 313911109
Cusip 313911208
Cusip 313911307
8080105 (6/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Appendix to Federated Stock and Bond Fund, Inc.
Graph, p. 8
The "x" axis reflects the period from 12/31/68 to 4/30/00. Marks are made
to represent every other year and every fourth year is labeled. This graphic
presentation includes a legend in the upper left corner.
The "y" axis reflects a total investment range from 0 to $500,000. The
shaded line graph assumes an initial investment of $32,000 on 12/31/68. The
chart concludes that if income is reinvested, the investment would have grown to
$430,274. This is compared to the value of the $32,000 had it not been invested.
Graph, p. 9
The "x" axis reflects the period from 12/31/68 to 4/30/00. Marks are made
to represent every other year and every fourth year is labeled. This graphic
presentation includes a legend in the upper left corner.
The "y" axis reflects a total investment range from 0 to $250,000. The
shaded line graph assumes an initial investment of $1,000 on 12/31/68 and
subsequent investments of $1,000 on each anniversary date for the next 31 years
for a total of $32,000. The chart concludes that if the income is reinvested,
the investment would have grown to $227,779. This is compared to the value of
the $32,000 had it not been invested.
Graph, p. 10
The "x" axis reflects the period from 4/30/90 to 4/30/00. Marks are made
to represent every year and every second year is labeled. This graphic
presentation includes a legend in the upper left corner.
The "y" axis reflects a total investment range from 0 to $80,000. The
shaded line graph assumes an initial investment of $5,000 on 4/30/90 and
additional $250 investments each month til 4/30/00 for a total of $35,000. The
chart concludes that if the income is reinvested, the investment would have
grown to $62,944. This is compared to the value of the $35,000 had it not been
invested.
|
|