PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
Master Trust, which covers the six-month period ended May 31, 1995. The Report
includes the Investment Review and Financial Statements, which contain the
Portfolio of Investments.
This money market mutual fund continues to pursue competitive daily
income--along with daily liquidity and stability of principal*--through a
diversified portfolio primarily composed of commercial paper, variable rate
instruments, repurchase agreements, and certificates of deposit.
At the end of the period, the fund's net assets stood at $888.6 million.
Dividends paid to shareholders during the period totaled $23.1 million, or $0.03
per share.
Thank you for your confidence in Federated Master Trust. As always, we welcome
your comments and suggestions.
Sincerely,
Glen R. Johnson
President
July 17, 1995
* WHILE NO MONEY MARKET MUTUAL FUND CAN GUARANTEE THAT A STABLE NET ASSET VALUE
WILL BE MAINTAINED, THE FUND HAS DONE SO SINCE ITS INCEPTION.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The fund invests exclusively in money market instruments maturing in twelve
months or less. The average maturity of these securities, computed on a
dollar-weighted basis, is restricted to 90 days or less. Portfolio securities
must be rated in the highest short-term rating category by one or more of the
nationally recognized statistical rating organizations or be of comparable
quality to securities having such ratings. Typical security types include, but
are not limited to, commercial paper, certificates of deposit, time deposits,
variable rate instruments and repurchase agreements.
During the reporting period, the Federal Reserve Board (the "Fed") was in a
restrictive interest rate stance. The Fed tightened monetary policy by
increasing the Federal Funds target rate from 5.50% to 6.00% over the period.
The target average maturity range for the fund was in the 30-40 day range until
the end of April. At that time, the target range was extended to 35-45 days.
This reflects management's bias toward an "on hold" Fed given the current pace
of economic slowdown. During the past several months, both the consumer and
manufacturing sectors of the economy have decelerated in reaction to last year's
aggressive rate hikes. Consequently, the money market yield curve flattened
dramatically. Being on the shorter end of the average maturity spectrum has
proven to be helpful over the reporting period. The Fed raised short-term rates
three times since May 31, 1994. In structuring the fund, there is continued
emphasis placed on positioning 25-30% of the fund's assets in variable rate
demand notes and accomplishing a modest barbell structure.
During the six months ended May 31, 1995, the net assets of Federated Master
Trust increased from $773.2 to $888.6 million, while the 7-day net yield
increased from 5.17% to 5.77%.* The effective average maturity of the fund on
May 31, 1995 was 40 days.
* PERFORMANCE QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. YIELD WILL VARY.
2
FEDERATED MASTER TRUST
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------------ ------------
<C> <S> <C>
BANK NOTES--1.1%
- ------------------------------------------------------------------------------
BANKING--1.1%
------------------------------------------------------------
$10,000,000 Mellon Bank NA, Pittsburgh, 6.24%-6.48%, 8/9/1995-11/7/1995 $ 10,000,000
------------------------------------------------------------ ------------
(A) COMMERCIAL PAPER--61.4%
- ------------------------------------------------------------------------------
BANKING--14.1%
------------------------------------------------------------
40,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National
Bank PLC, London), 6.169%, 6/5/1995 39,973,022
------------------------------------------------------------
26,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce, Toronto), 6.026%-6.452%,
8/16/1995-8/21/1995 25,665,247
------------------------------------------------------------
18,350,000 Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank
AG, Frankfurt), 6.093%-6.708%, 7/3/1995-8/2/1995 18,205,939
------------------------------------------------------------
30,000,000 Queensland Alumina Ltd., (Credit Suisse, Zurich LOC),
5.971%-6.101%, 7/28/1995-9/1/1995 29,648,067
------------------------------------------------------------
12,000,000 UBS Finance (Delaware), Inc., (Guaranteed by Union Bank of
Switzerland, Zurich), 6.151%, 6/1/1995 12,000,000
------------------------------------------------------------ ------------
Total 125,492,275
------------------------------------------------------------ ------------
DIVERSIFIED--4.3%
------------------------------------------------------------
38,000,000 Rockwell International Corp., 6.163%-6.824%,
6/1/1995-9/13/1995 37,884,773
------------------------------------------------------------ ------------
FINANCE--COMMERCIAL--24.7%
------------------------------------------------------------
10,000,000 Asset Securitization Cooperative Corp., 5.969%, 8/30/1995 9,853,000
------------------------------------------------------------
40,000,000 Beta Finance, Inc., 6.033%-6.337%, 6/7/1995-10/10/1995 39,566,229
------------------------------------------------------------
8,000,000 CIESCO, Inc., 6.338%-6.356%, 9/21/1995-9/22/1995 7,846,376
------------------------------------------------------------
45,000,000 CIT Group Holdings, Inc., 6.038%-6.217%,
6/27/1995-10/23/1995 44,442,871
------------------------------------------------------------
7,100,000 Corporate Asset Funding Co., Inc. (CAFCO), 6.271%-6.401%,
9/7/1995-11/7/1995 6,940,442
------------------------------------------------------------
10,000,000 Falcon Asset Securitization Corp., 6.11%, 7/17/1995 9,923,078
------------------------------------------------------------
43,000,000 General Electric Capital Corp., 6.002%-6.830%,
6/8/1995-10/19/1995 42,359,222
------------------------------------------------------------
</TABLE>
3
FEDERATED MASTER TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------------ ------------
<C> <S> <C>
COMMERCIAL PAPER--CONTINUED
- ------------------------------------------------------------------------------
FINANCE--COMMERCIAL--CONTINUED
------------------------------------------------------------
$43,925,000 PREFCO-Preferred Receivables Funding Co., 6.042%-6.17%,
6/20/1995-11/15/1995 $ 43,446,900
------------------------------------------------------------
15,000,000 Sheffield Receivables Corp., 6.10%, 8/9/1995 14,827,500
------------------------------------------------------------ ------------
Total 219,205,618
------------------------------------------------------------ ------------
FINANCE--RETAIL--13.3%
------------------------------------------------------------
39,000,000 Associates Corp. of North America, 6.003%-6.202%,
6/13/1995-10/31/1995 38,285,880
------------------------------------------------------------
20,600,000 Ford Credit Receivables Funding, Inc., 5.974%-6.303%,
6/6/1995-10/4/1995 20,404,744
------------------------------------------------------------
39,500,000 New Center Asset Trust, A1+/P1 Series, 6.153%-6.694%,
6/1/1995-10/2/1995 39,067,063
------------------------------------------------------------
21,000,000 Norwest Financial, Inc., 6.098%, 7/26/1995 20,807,500
------------------------------------------------------------ ------------
Total 118,565,187
------------------------------------------------------------ ------------
INSURANCE--1.8%
------------------------------------------------------------
15,000,000 Marsh & McLennan Cos., Inc., 6.152%, 6/13/1995 14,969,700
------------------------------------------------------------
1,072,000 Prospect Street Senior Portfolio, L.P., (Guaranteed by
Financial Security Assurance, Inc.), 6.122%, 6/1/1995 1,072,000
------------------------------------------------------------ ------------
Total 16,041,700
------------------------------------------------------------ ------------
OIL & OIL FINANCE--1.1%
------------------------------------------------------------
10,000,000 Koch Industries, Inc., 6.151%, 6/1/1995 10,000,000
------------------------------------------------------------ ------------
TELECOMMUNICATIONS--2.1%
------------------------------------------------------------
4,000,000 AT&T Corp., 6.373%, 8/11/1995 3,951,247
------------------------------------------------------------
15,000,000 Ameritech Corp., 6.026%, 8/10/1995 14,826,750
------------------------------------------------------------ ------------
Total 18,777,997
------------------------------------------------------------ ------------
TOTAL COMMERCIAL PAPER 545,967,550
------------------------------------------------------------ ------------
(B) NOTES--VARIABLE--25.3%
- ------------------------------------------------------------------------------
BANKING--16.1%
------------------------------------------------------------
9,930,000 500 South Front St. L.P., Series A, (Huntington National
Bank, Columbus, OH LOC), 6.120%, 6/1/1995 9,930,000
------------------------------------------------------------
</TABLE>
4
FEDERATED MASTER TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------------ ------------
<C> <S> <C>
NOTES--VARIABLE--CONTINUED
- ------------------------------------------------------------------------------
BANKING--CONTINUED
------------------------------------------------------------
$ 1,505,000 Continental Commercial Properties, (Huntington National
Bank, Columbus, OH LOC), 6.120%, 6/1/1995 $ 1,505,000
------------------------------------------------------------
2,500,000 Continental Downtown Properties, (Huntington National Bank,
Columbus, OH LOC), 6.120%, 6/1/1995 2,500,000
------------------------------------------------------------
8,610,000 H & D, Inc., (Huntington National Bank, Columbus, OH LOC),
6.122%, 6/1/1995 8,610,000
------------------------------------------------------------
19,250,000 Jackson County, AL Industrial Development Board, (National
Westminster Bank, PLC, London LOC), 6.172%, 6/1/1995 19,250,000
------------------------------------------------------------
2,000,000 Kentucky Rural Economic Development Authority (PCI), (PNC
Bank, N.A. LOC), 6.199%, 6/5/1995 2,000,000
------------------------------------------------------------
19,151,000 Midwest Funding Corp., Series 1992 D, (Bank One, Columbus,
N.A. LOC), 6.06%, 6/1/1995 19,151,000
------------------------------------------------------------
3,000,000 PHH/CFC Leasing, Inc., Series A, (Societe Generale, Paris
LOC), 6.11%, 6/7/1995 3,000,000
------------------------------------------------------------
29,000,000 PHH/CFC Leasing, Inc., Series B, (Banque Nationale de Paris
LOC), 6.11%, 6/7/1995 29,000,000
------------------------------------------------------------
20,000,000 (c) SMM Trust, Series 1994-B, (Guaranteed by Morgan Guaranty
Trust Co., New York), 6.205%, 8/11/1995 19,997,773
------------------------------------------------------------
20,000,000 (c) SMM Trust, Series 1995-I, (Guaranteed by Morgan Guaranty
Trust Co., New York), 6.083%, 6/1/1995 19,994,226
------------------------------------------------------------
8,325,000 Wendys of Las Vegas and San Antonio, (Huntington National
Bank, Columbus, OH LOC), 6.120%, 6/1/1995 8,325,000
------------------------------------------------------------ ------------
Total 143,262,999
------------------------------------------------------------ ------------
ELECTRICAL EQUIPMENT--3.5%
------------------------------------------------------------
3,244,300 GS Funding Corp., (Guaranteed by General Electric Co.),
6.099%, 6/5/1995 3,244,300
------------------------------------------------------------
26,950,498 Northwest Airlines, Inc., (Guaranteed by General Electric
Co.), 6.131%, 6/5/1995 26,950,498
------------------------------------------------------------ ------------
Total 30,194,798
------------------------------------------------------------ ------------
</TABLE>
5
FEDERATED MASTER TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------------ ------------
<C> <S> <C>
NOTES--VARIABLE--CONTINUED
- ------------------------------------------------------------------------------
FINANCE--RETAIL--3.0%
------------------------------------------------------------
$27,000,000 Carco Auto Loan Master Trust, Series 1993-2, Class A1,
6.135%, 6/15/1995 $ 27,000,000
------------------------------------------------------------ ------------
INSURANCE--2.7%
------------------------------------------------------------
24,000,000 (c) Peoples Security Life Insurance, 6.340%, 6/1/1995 24,000,000
------------------------------------------------------------ ------------
TOTAL NOTES--VARIABLE 224,457,797
------------------------------------------------------------ ------------
* REPURCHASE AGREEMENTS--12.4%
- ------------------------------------------------------------------------------
1,500,000 Chemical Securities, Inc., 6.125%, dated 5/31/1995, due
6/1/1995 1,500,000
------------------------------------------------------------
29,300,000 PaineWebber, Inc., 6.18%, dated 5/31/1995, due 6/1/1995 29,300,000
------------------------------------------------------------
79,378,000 S.G. Warburg & Co., Inc., 6.125%, dated 5/31/1995, due
6/1/1995 79,378,000
------------------------------------------------------------ ------------
Total 110,178,000
------------------------------------------------------------ ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (D) $890,603,347
------------------------------------------------------------ ------------
------------
<FN>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. These securities have been determined to be
liquid under criteria established by the Board of Trustees. At the end of
the period, these securities amounted to 63,991,999 which represents 7.2%
of net assets.
(d) Also represents cost for federal tax purposes.
* The repurchase agreements are 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 agreements are through
participation in joint accounts with other Federated funds.
Note: The categories of investments are shown as a percentage of net assets
($888,608,182) at May 31, 1995.
</TABLE>
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
LOC --Letter of Credit
PLC --Public Limited Company
</TABLE>
(See Notes which are an integral part of the Financial Statements)
6
FEDERATED MASTER TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------
Investments in repurchase agreements $110,178,000
- --------------------------------------------------------------------------------
Investments in securities 780,425,347
- -------------------------------------------------------------------------------- ----------
Total investments, at amortized cost and value $890,603,347
- ---------------------------------------------------------------------------------------------
Cash 150,589
- ---------------------------------------------------------------------------------------------
Income receivable 1,313,378
- ---------------------------------------------------------------------------------------------
Receivable for shares sold 18,801
- --------------------------------------------------------------------------------------------- ------------
Total assets 892,086,115
- ---------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------
Payable for shares redeemed $ 83,839
- --------------------------------------------------------------------------------
Income distribution payable 3,289,029
- --------------------------------------------------------------------------------
Accrued expenses 105,065
- -------------------------------------------------------------------------------- ----------
Total liabilities 3,477,933
- --------------------------------------------------------------------------------------------- ------------
NET ASSETS for 888,608,182 shares outstanding $888,608,182
- --------------------------------------------------------------------------------------------- ------------
------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($888,608,182 DIVIDED BY 888,608,182 shares outstanding) $ 1.00
- --------------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
7
FEDERATED MASTER TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------
Interest $24,979,754
- -------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------
Investment advisory fee $1,629,317
- ------------------------------------------------------------
Administrative personnel and services fee 308,348
- ------------------------------------------------------------
Custodian fees 104,039
- ------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 24,147
- ------------------------------------------------------------
Directors'/Trustees' fees 7,695
- ------------------------------------------------------------
Auditing fees 8,130
- ------------------------------------------------------------
Legal fees 7,669
- ------------------------------------------------------------
Portfolio accounting fees 54,371
- ------------------------------------------------------------
Shareholder services fee 203,665
- ------------------------------------------------------------
Share registration costs 17,018
- ------------------------------------------------------------
Printing and postage 6,295
- ------------------------------------------------------------
Insurance premiums 7,979
- ------------------------------------------------------------
Taxes 10,990
- ------------------------------------------------------------
Miscellaneous 6,115
- ------------------------------------------------------------ ----------
Total expenses 2,395,778
- ------------------------------------------------------------
Deduct--Waiver of investment advisory fee 534,539
- ------------------------------------------------------------ ----------
Net expenses 1,861,239
- ------------------------------------------------------------------------- -----------
Net investment income $23,118,515
- ------------------------------------------------------------------------- -----------
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
8
FEDERATED MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1995 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------
Net investment income $ 23,118,515 $ 30,282,577
- --------------------------------------------------------------------------- ------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------
Distributions from net investment income (23,118,515) (30,282,577)
- --------------------------------------------------------------------------- ------------------ ------------------
SHARE TRANSACTIONS
- ---------------------------------------------------------------------------
Proceeds from sale of Shares 1,712,094,447 5,769,238,863
- ---------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 5,593,219 5,990,213
- ---------------------------------------------------------------------------
Cost of Shares redeemed (1,602,339,558) (5,870,797,250)
- --------------------------------------------------------------------------- ------------------ ------------------
Change in net assets resulting from share transactions 115,348,108 (95,568,174)
- --------------------------------------------------------------------------- ------------------ ------------------
Change in net assets 115,348,108 (95,568,174)
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period 773,260,074 868,828,248
- --------------------------------------------------------------------------- ------------------ ------------------
End of period $ 888,608,182 $ 773,260,074
- --------------------------------------------------------------------------- ------------------ ------------------
------------------ ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
9
FEDERATED MASTER TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1995 ------------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988
- ------------------------- ------------ -------- -------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------------
Net investment income 0.03 0.04 0.03 0.04 0.06 0.08 0.09 0.07
- -------------------------
LESS DISTRIBUTIONS
- -------------------------
Distributions from net
investment income (0.03) (0.04) (0.03) (0.04) (0.06) (0.08) (0.09) (0.07)
- ------------------------- ------ -------- -------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------- ------ -------- -------- ---------- ---------- ---------- ---------- ----------
------ -------- -------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (a) 2.86% 3.78% 2.91% 3.76% 6.22% 8.16% 9.21% 7.33%
- -------------------------
RATIOS TO AVERAGE NET
ASSETS
- -------------------------
Expenses 0.46%(b) 0.46% 0.46% 0.46% 0.46% 0.45% 0.45% 0.45%
- -------------------------
Net investment income 5.68%(b) 3.72% 2.88% 3.73% 6.13% 7.87% 8.83% 7.03%
- -------------------------
SUPPLEMENTAL DATA
- -------------------------
Net assets, end of
period (000 omitted) $888,608 $773,260 $868,828 $1,058,671 $1,302,565 $1,495,299 $2,109,661 $2,391,625
- -------------------------
<CAPTION>
1987 1986
- ------------------------- ---------- ----------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00
- -------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------------
Net investment income 0.06 0.07
- -------------------------
LESS DISTRIBUTIONS
- -------------------------
Distributions from net
investment income (0.06) (0.07)
- ------------------------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00
- ------------------------- ---------- ----------
---------- ----------
TOTAL RETURN (a) 6.39% 6.82%
- -------------------------
RATIOS TO AVERAGE NET
ASSETS
- -------------------------
Expenses 0.45% 0.45%
- -------------------------
Net investment income 6.22% 6.60%
- -------------------------
SUPPLEMENTAL DATA
- -------------------------
Net assets, end of
period (000 omitted) $3,237,809 $3,057,411
- -------------------------
<FN>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) Computed on an annualized basis.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
10
FEDERATED MASTER TRUST
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Master Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a diversified, open-end management
investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Trust 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 Trust to
monitor, on a daily basis, the market value of each repurchase agreement's
underlying collateral to ensure that the value of collateral at least equals
the repurchase price to be paid under the repurchase agreement transaction.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Trust's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Trust could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Trust'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
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust 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.
11
FEDERATED MASTER TRUST
- ---------------------------------------------------------
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions
exempt from such registration. Many restricted securities may be resold in
the secondary market in transactions exempt from registration. In some
cases, the restricted securities may be resold without registration upon
exercise of a demand feature. Such restricted securities may be determined
to be liquid under criteria established by the Trustees. The Trust will not
incur any registration costs upon such resales. Restricted securities are
valued at amortized cost in accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at May 31, 1995 is
as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
----------------------------------- ---------------------- -----------
<S> <C> <C>
SMM Trust, Series 1994-B,
(Guaranteed by Morgan Guaranty
Trust Co., New York), 6.205%,
8/11/1995 8/31/1994 $19,989,400
-----------------------------------
SMM Trust, Series 1995-I,
(Guaranteed by Morgan Guaranty
Trust Co., New York), 6.083%,
6/1/1995 5/31/1995 $19,994,210
-----------------------------------
Peoples Security Life
Insurance, 6.340%, 6/1/1995 5/25/1989-12/13/1990 $24,000,000
-----------------------------------
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At May
31, 1995, capital paid-in aggregated $888,608,182.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MAY 31, YEAR ENDED
1995 NOVEMBER 30, 1994
- --------------------------------------------- -------------- -----------------
<S> <C> <C>
Shares Sold 1,712,094,447 5,769,238,863
- ---------------------------------------------
Shares issued to shareholders in payment of
distributions declared 5,593,219 5,990,213
- ---------------------------------------------
Shares redeemed (1,602,339,558) (5,870,797,250)
- --------------------------------------------- -------------- -----------------
Net change resulting from share
transactions 115,348,108 (95,568,174)
- --------------------------------------------- -------------- -----------------
-------------- -----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Research, the Trust's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Trust's average daily net assets. The Adviser will
waive, to the extent of its advisory fee, the amount, if
12
FEDERATED MASTER TRUST
- ---------------------------------------------------------
any, by which the Trust's aggregate annual operating expenses (excluding
interest, taxes, brokerage commissions, expenses of registering and
qualifying the Trust and its shares under federal and state laws, expenses
of withholding taxes and extraordinary expenses) exceed .45 of 1% of average
daily net assets of the Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The FAS fee is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period
of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Trust will pay
FSS up to .25 of 1% of average daily net assets of the Trust for the period.
This fee is to obtain certain services for shareholders and to maintain
shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent
for the Trust. This fee is based on the size, type, and number of accounts
and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting
records for which it receives a fee. The fee is based on the level of the
Trust's average daily net assets for the period, plus out-of-pocket
expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
13
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Peter E. Madden VICE PRESIDENT
Gregor F. Meyer Edward C. Gonzales
John E. Murray, Jr. VICE PRESIDENT AND TREASURER
Wesley W. Posvar John W. McGonigle
Marjorie P. Smuts VICE PRESIDENT AND SECRETARY
David M. Taylor
ASSISTANT TREASURER
J. Crilley Kelly
ASSISTANT SECRETARY
</TABLE>
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 possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
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.
14
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FEDERATED
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MASTER
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TRUST
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SEMI-ANNUAL REPORT
TO SHAREHOLDERS
MAY 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED
INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 314214107
8070106 (7/95) --------------------------------------
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