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LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Supplement to Prospectus dated May 31, 1994
Effective December 17, 1994, Liberty U.S. Government Money Market Trust
added a new class of shares called "Class B Shares." Accordingly, the
existing shares of Liberty U.S. Government Money Market Trust are designated
as "Class A Shares." All references in this prospectus to Liberty U.S.
Government Money Market Trust are to the Class A Shares class of the
portfolio. In this regard, please make the following changes to the
prospectus:
A. On page 1, please delete the section entitled "Summary of Trust
Expenses" and replace with the following:
"Summary of Trust Expenses
Class A Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)
None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price) None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable)(1) None
Redemption Fee (as a percentage of amount redeemed, if applicable)
None
Exchange Fee None
Annual Class A Shares Operating Expenses
(As a percentage of average net assets)
Management Fee 0.49%
12b-1 Fee None
Total Other Expenses 0.59%
Shareholder Services Fee(2). 0.05%
Total Class A Shares Operating Expenses (3) 1.08%
(1) See "Contingent Deferred Sales Charge" on page 11.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Class A Shares Operating Expenses in the table above are based on
expenses expected during
the fiscal year ending March 31, 1995. The Total Class A Shares
Operating expenses were 1.01% for the fiscal year ended March 31, 1994.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class A Shares of the
Trust will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see " Trust Information."
Wire-transferred redemptions of less than $5,000 may be subject to
additional fees.
EXAMPLE 1 year 3 years5 years 10 years
You would pay the following expenses on
a $1,000 investment assuming (1) 5% annual
return and (2) redemption at the end of each
time period. As noted in the table above, the Trust
charges no redemption fees for Class A Shares.
.................................... $11 $34 $60 $132
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
The information set forth in the foregoing table and example relates only to
Class A Shares of the Trust. The Trust also offers another class of shares
called Class B Shares. Class A Shares and Class B Shares are subject to
certain of the same expenses; however, Class B Shares are subject to a 12b-
1 fee and a contingent deferred sales charge. See "Other Classes of
Shares."
B. On page 3, please delete the first paragraph in the section entitled
"General Information" and replace it with the following:
"The Trust, formerly AARP U.S. Government Money Market Trust,
was established as a Massachusetts business trust under a
Declaration of Trust dated August 30, 1979. The Trust's address
is Liberty Center, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. The Trust invests in U.S. government
obligations maturing in one year or less. The Declaration of
Trust permits the Trust to offer separate series of shares of
beneficial interest representing interests in separate
portfolios of securities. The shares in any one portfolio may
be offered in separate classes. As of the date of this
prospectus, the Board of Trustees ("Trustees") has established
two classes of shares known as Class A Shares and Class B
Shares. This prospectus relates only to Class A Shares
("Shares") of the Trust. Class A Shares are sold at net asset
value to financial institutions which have a sales agreement
with the Trust, or directly by the distributor. A minimum
initial investment of $500 is required."
C. On page 6, please delete the second sentence in the section entitled
"Net Asset Value" and replace it with the following:
"The net asset value per Share is determined by adding the interest of
the Shares in the value of all securities and other assets of the Trust,
subtracting the interest of the Shares in liabilities of the Trust and those
attributable to Shares, and dividing the remainder by the total
number of Shares outstanding."
D. On page 17, following the section entitled "Independent Public
Accountants.", please add the following section:
"Expenses of the Trust and Class A Shares
Holders of Shares pay their allocable portion of Fund and Trust
expenses.
The Trust expenses for which holders of Shares pay their
allocable portion include, but are not limited to: the cost of
organizing the Trust and continuing its existence; registering
the Trust with federal and state securities authorities;
Trustees' fees; auditors' fees; the cost of meetings of
Trustees; legal fees of the Trust; association membership dues;
and such non-recurring and extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their
allocable portion include, but are not limited to: registering
the Fund and Shares of the Fund; investment advisory services;
taxes and commissions; custodian fees; insurance premiums;
auditors' fees; and such non-recurring and extraordinary items
as may arise.
At present, the only expenses which are allocated to Class A Shares as a
class are expenses under the Shareholder Services Plan. However, the Trustees
reserve the right to allocate certain other expenses to holders of
Shares as it deems appropriate "Class Expenses." In any case,
Class Expenses would be limited to: Rule 12b-1 fees; transfer
agent fees as identified by the transfer agent as attributable
to holders of Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder
reports, prospectuses and proxies to current shareholders;
registration fees paid to the Securities and Exchange Commission
and registration fees paid to state securities commissions;
expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating
solely to Shares; and Trustees' fees incurred as a result of
issues relating solely to Shares."
In addition, please add the heading "Expenses of the Trust and
Class A Shares" to the Table of Contents.
E. On page 17, please add the following sentence as the second sentence
in the sub-section entitled "Voting Rights":
"All shares of all classes of in the Trust have equal voting
rights, except that in matters affecting only a particular
class, only shares of that class are entitled to vote."
F. On page 18, please add the following as the fourth paragraph of the
section entitled "Performance Information:
"Yield and effective yield will be calculated separately for
Class A Shares and Class B Shares. Because Class B Shares are
subject to Rule 12b-1 fees and Shareholder Services fees and
Class A Shares are subject to Shareholder Services fees, the
yield and effective yield for Class A Shares, for the same
period, may differ from that of Class B Shares. Depending on
the dollar amount invested, and the time period for which any
particular class of shares is held, the total return for any
particular class may exceed that of another."
G. Following the section entitled "Performance Information" on page 18,
please add the following section:
"Other Classes of Shares
Class B Shares of the Trust are available only by exchange from
Class B Shares of other Liberty Family funds. The Trust attempts
to stabilize the value of a Class B Share at $1.00. Except as
otherwise noted in the prospectus, Class B Shares are exchanged
at net asset value and are redeemed at net asset value.
However, a contingent deferred sales charge is imposed on
certain shares which are redeemed within six full years of
original purchase of Liberty Family Class B Shares.
Class B Shares are distributed pursuant to a 12b-1 Plan.
Financial institutions providing distribution or administrative
services may receive different compensation depending upon which
class of shares of the Fund is sold.
The amount of dividends payable to shareholders of Class A
Shares may generally exceed that payable to the shareholders of
Class B Shares by the difference between class expenses and any
12b-1 Plan expenses and Shareholder service plan expenses borne
by Shares of each respective class.. The stated advisory fee is
the same for both classes of shares."
In addition, please add the heading "Other Classes of Shares" to
the Table of Contents.
December 31, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
531485100
G00875-01(12/94)
