Federated Investors
[Graphic]
Liberty U.S. Government Money Market Trust
16TH SEMI-ANNUAL REPORT
SEPTEMBER 30, 1996
ESTABLISHED 1980
MONEY MARKETS
PRESIDENT'S MESSAGE
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Dear Shareholder:
Liberty U.S. Government Money Market Trust was established in 1980, and I am
pleased to present the Semi-Annual Report to shareholders, which covers the
six-month period from April 1, 1996 through September 30, 1996. The report
begins with an interview with the fund's portfolio manager, Susan R. Hill,
Assistant Vice President, Federated Advisers, and follows with a complete
list of the fund's Portfolio of Investments and its Financial Statements.
Your cash has been at work pursuing daily income from a portfolio of
short-term U.S. government securities that is managed to help keep the value
of your principal stable.* In addition, the fund gives you daily access to
your invested cash.
Dividends paid to both Class A and Class B shareholders of the fund, during
the six-month reporting period, totaled $0.02 per share. At the end of the
period, the fund's net assets stood at $658.2 million.
Thank you for selecting Liberty U.S. Government Money Market Trust as a
convenient investment for your ready cash.
As always, we welcome your comments and suggestions.
Sincerely,
[Graphic]
J. Christopher Donahue
President
November 15, 1996
* 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. An
investment in this fund is neither insured nor guaranteed by the U.S.
government.
Investment Review
[Graphic]
Susan R. Hill, CFA
Assistant Vice President
Federated Advisers
[Graphic]
WHAT IS YOUR ANALYSIS OF THE INTEREST RATE ENVIRONMENT DURING THE SIX-MONTH
REPORTING PERIOD?
Although the Federal Reserve Board (the "Fed") kept monetary policy on hold
over the six months ended September 30, 1996, the period was characterized
by shifts in market sentiment regarding the strength of the U.S. economy and
the extent and direction of future monetary policy changes. The last move in
monetary policy took place at the end of January 1996, when the Fed lowered
the fed funds target rate by 25 basis points to the current 5.25%. This move
was made amid slowing economic growth and benign inflationary pressures. In
early March 1996, however, the market was stunned by the release of a much
larger than expected increase in non-farm payroll jobs for the month of
February. The solid employment gains continued and combined with signs of
strength in consumer spending and housing in the ensuing months to paint a
picture of an economy that was clearly more robust than previously thought.
Fears that the economy might be growing faster than the non-inflationary
potential rate of growth surfaced; this sparked expectations that the Fed
may be inclined to raise the fed funds target rate to ward off potential
inflationary pressures. The market relaxed a bit as signs of the
long-awaited slowdown in economic growth began to emerge. Tight labor market
conditions yielded a nervous reaction from the market, and then the market
receded once more.
Movements in short-term interest rates bounced back and forth with the
shifts in market sentiment. Rates rose fairly steadily from the beginning of
April 1996 through early June as conviction that the next policy move might
be a tightening grew. The yield on the six-month Treasury bill, for example,
rose from 5.0% to 5.5%. Market volatility increased over the remainder of
the period, as sentiment regarding the timing of the move swayed back and
forth with each economic release. Rates rose in early July 1996 as job
growth continued to be strong, then fell again as signs of a long-awaited
economic slowdown began to emerge, but rose once more as fears of developing
wage pressures gripped the market. Finally, rates declined toward the end of
the quarter as the Fed emerged from its September 24, 1996, Federal Open
Market Committee meeting with monetary policy unchanged.
Over this latter period, the yield on the six-month Treasury bill rose to
5.60% in early July 1996, fell to 5.30% by early August, rose to 5.60% by
early September, and, finally, fell to 5.25% by the end of the period.
WHAT WERE YOUR STRATEGIES FOR LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
DURING THE PERIOD?
As the signs of strength in the economy became more apparent, we lowered the
average maturity target range of the fund from between 40 and 50 days to
between 35 and 45 days. We added to our government agency floating rate
position within the fund, to enhance the portfolio's responsiveness to
movements in interest rates. We also purchased securities with short-term
maturities (3 months and in) -- both U.S. government agencies and term
repurchase agreements -- that added relative value to our overnight
repurchase agreement position, and may allow for the potential of
reinvestment at higher rates late in the year.
AS WE APPROACH THE CLOSE OF 1996, WHAT IS YOUR OUTLOOK FOR RATES?
Amid some speculation to the contrary, the Fed voted to keep the fed funds
target rate range unchanged at the September Federal Open Market Committee
meeting. Such a decision implies that the Fed is reasonably comfortable with
the present balance between economic growth and the potential for price
pressures; however, it does not preclude the Fed from tightening before the
end of 1996 should they see early signs of inflation. If the Fed does feel
the need to tighten monetary policy, however, it is likely to be a
fine-tuning of the current stance rather than a prolonged cycle. We expect
market volatility in the near term to remain high, as participants continue
to focus close attention on each upcoming economic release for its impact on
monetary policy.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS -- 40.8%
$ 4,000,000 Federal Farm Credit Bank Note -- 0.6%
5.60%, 6/3/1997 $ 3,996,233
30,000,000 (a)Federal Home Loan Bank, Discount Notes -- 4.5%
5.16%-5.49%, 10/31/1996 - 1/8/1997 29,682,211
10,000,000 (b)Federal Home Loan Bank, Floating Rate Note -- 1.5%
5.21%, 10/1/1996 9,999,202
4,000,000 Federal Home Loan Mortgage Corp. Note -- 0.6%
5.64%, 8/28/1997 3,991,156
9,500,000 Federal National Mortgage Association Notes -- 1.4%
5.41%-5.60%, 11/1/1996 - 12/6/1996 9,497,976
48,940,000 (a)Federal National Mortgage Association, Discount Notes -- 7.3%
4.99%-5.51%, 11/7/1996 - 3/24/1997 48,198,819
46,600,000 (b)Federal National Mortgage Association, Floating Rate Notes -- 7.1%
5.215%-5.62%, 10/1/1996 - 10/15/1996 46,571,930
3,000,000 Student Loan Marketing Association Note -- 0.5%
5.62%, 6/30/1997 2,992,021
31,220,000 (b)Student Loan Marketing Association, Floating Rate Notes -- 4.7%
5.40%-5.72%, 10/1/1996 31,219,604
5,936,000 (b)Government Guaranteed Floating Rate Notes -- 0.9%
Overseas Private Investment Corp., 6.02% - 6.52%,
10/1/1996 - 10/8/1996 5,936,000
20,000,000 (a)United States Treasury Bills -- 3.0%
4.79%-5.36%, 11/14/1996 - 8/21/1997 19,659,981
57,000,000 United States Treasury Notes -- 8.7%
5.625%-8.50%, 10/15/1996 - 9/30/1997 57,237,023
TOTAL SHORT-TERM U.S. GOVERNMENT OBLIGATIONS 268,982,156
</TABLE>
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(C)REPURCHASE AGREEMENTS -- 60.4%
<C> <S> <C>
$ 4,300,000 Barclays de Zoete Wedd Securities, Inc., 5.72%, dated 9/30/1996,
due 10/1/1996 $ 4,300,000
30,000,000 CIBC Wood Gundy Securities Corp., 5.78%, dated 9/30/1996,
due 10/1/1996 30,000,000
7,000,000 (d)CS First Boston, Inc., 5.35%, dated 8/26/1996, due 11/25/1996 7,000,000
20,000,000 Deutsche Morgan Grenfell Government Securities, Inc., 5.76%,
dated 9/30/1996, due 10/1/1996 20,000,000
65,000,000 Fuji Government Securities, Inc., 5.80%, dated 9/30/1996, due 10/1/1996 65,000,000
18,000,000 (d)Goldman Sachs & Co., LP, 5.38%, dated 9/5/1996, due 10/4/1996 18,000,000
30,000,000 Greenwich Capital Markets, Inc., 5.80%, dated 9/30/1996, due 10/1/1996 30,000,000
16,000,000 (d)J.P. Morgan Securities, Inc., 5.35%, dated 8/7/1996, due 10/7/1996 16,000,000
15,000,000 (d)J.P. Morgan Securities, Inc., 5.45%, dated 8/2/1996, due 10/31/1996 15,000,000
7,000,000 (d)Lehman Brothers Government Securities, Inc., 5.34%, dated 8/26/1996,
due 11/25/1996 7,000,000
30,000,000 Merrill Lynch Government Securities, Inc., 5.82%, dated 9/30/1996,
due 10/1/1996 30,000,000
25,000,000 Nikko Securities Co. International, Inc., 5.80%, dated 9/30/1996,
due 10/1/1996 25,000,000
130,000,000 PaineWebber Group, Inc., 5.80%, dated 9/30/1996, due 10/1/1996 130,000,000
TOTAL REPURCHASE AGREEMENTS 397,300,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 666,282,156
</TABLE>
(a) Discount rate at time of purchase.
(b) Denotes variable rate securities which show current rate and next demand
date.
(c) 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.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($658,238,890) at September 30, 1996.
The following acronym is used throughout this portfolio:
LP -- Limited Partnership
(See Notes which are an integral part of the Financial Statements)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $397,300,000
Investments in securities 268,982,156
Total investments, at amortized cost and value $666,282,156
Cash 132,794
Income receivable 3,971,976
Prepaid expenses 208,706
Total assets 670,595,632
LIABILITIES:
Payable for investments purchased 9,995,157
Payable for shares redeemed 22,481
Income distribution payable 2,339,104
Total liabilities 12,356,742
Net Assets for 658,238,890 shares outstanding $658,238,890
NET ASSET VALUE AND OFFERING PRICE PER SHARE:
CLASS A SHARES: ($652,032,515 / 652,032,515 shares outstanding) $1.00
CLASS B SHARES: ($6,206,375 / 6,206,375 shares outstanding) $1.00
REDEMPTION PROCEEDS PER SHARE:
CLASS A SHARES: $1.00
CLASS B SHARES: (94.50/100 of $1.00)* $0.95
</TABLE>
* Under certain limited conditions, a "Contingent Deferred Sales Charge" of
up to 5.50%, may be imposed. See "How to Redeem Shares" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $18,300,721
EXPENSES:
Investment advisory fee $ 1,685,089
Administrative personnel and services fee 258,221
Custodian fees 79,925
Transfer and dividend disbursing agent fees and expenses 1,284,634
Directors'/Trustees' fees 8,052
Auditing fees 8,967
Legal fees 2,562
Portfolio accounting fees 59,091
Distribution services fee -- Class B Shares 23,047
Shareholder services fee -- Class A Shares 846,222
Shareholder services fee -- Class B Shares 7,682
Share registration costs 27,816
Printing and postage 52,155
Insurance premiums 6,954
Taxes 8,967
Miscellaneous 4,575
Total expenses 4,363,959
Waivers --
Waiver of investment advisory fee $ (28,311)
Waiver of shareholder services fee -- Class A Shares (676,977)
Waiver of shareholder services fee -- Class B Shares (4,302)
Total waivers (709,590)
Net expenses 3,654,369
Net investment income $14,646,352
</TABLE>
(See Notes which are an integral part of the Financial Statements)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
SEPTEMBER 30, MARCH 31,
1996 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 14,646,352 $ 33,641,492
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Class A Shares (14,539,476) (33,531,445)
Class B Shares (106,876) (110,047)
Change in net assets resulting from distributions to shareholders (14,646,352) (33,641,492)
SHARE TRANSACTIONS --
Proceeds from sale of shares 231,103,505 409,842,113
Net asset value of shares issued to shareholders in payment of
distributions declared 11,067,883 30,349,015
Cost of shares redeemed (290,863,453) (448,703,213)
Change in net assets resulting from share transactions (48,692,065) (8,512,085)
Change in net assets (48,692,065) (8,512,085)
NET ASSETS:
Beginning of period 706,930,955 715,443,040
End of period $ 658,238,890 $ 706,930,955
</TABLE>
(See Notes which are an integral part of the Financial Statements)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS -- CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
SEPTEMBER 30, YEAR ENDED MARCH 31,
1996 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <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 $ 1.00 $1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment income 0.02 0.05 0.04 0.02 0.03 0.05 0.07 0.08 0.07 0.06
LESS DISTRIBUTIONS
Distributions from
net investment income (0.02) (0.05) (0.04) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06)
NET ASSET
VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 2.18% 4.89% 3.93% 2.34% 2.71% 4.66% 7.11% 8.24% 7.44% 6.07%
RATIOS TO
AVERAGE NET
ASSETS
Expenses 1.06%* 1.10% 1.12% 1.01% 1.04% 1.03% 1.01% 1.02% 1.01% 1.01%
Net investment 4.30%* 4.78% 3.83% 2.31% 2.69% 4.59% 6.89% 7.94% 7.19% 5.90%
income
Expense waiver/
reimbursement(b) 0.21%* 0.20% -- -- -- -- -- -- -- --
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $652,033 $697,472 $715,257 $805,907 $919,883 $1,173,685 $1,393,380 $1,443,347 $1,386,704 $1,358,694
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS -- CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
(UNAUDITED) ENDED
SEPTEMBER 30, MARCH 31,
1996 1996 1995(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.04 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.04) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.76% 4.04% 1.14%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.87%* 1.91% 1.95%*
Net investment income 3.48%* 3.91% 4.15%*
Expense waiver/reimbursement(c) 0.15%* 0.14% --
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $6,206 $9,459 $186
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from December 17, 1994 (date of
initial public offering) to March 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 (UNAUDITED)
1. ORGANIZATION
Liberty U.S. Government Money Market Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Trust offers two
classes of shares: Class A Shares and Class B Shares. The investment
objective of the Trust is stability of principal and current income
consistent with stability of principal.
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
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.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
USE OF ESTIMATES -- 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.
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) for
each class of shares.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
SEPTEMBER 30, MARCH 31,
CLASS A SHARES 1996 1996
<S> <C> <C>
Shares sold 221,590,232 391,777,877
Shares issued to shareholders in payment of distributions declared 11,000,340 30,256,243
Shares redeemed (278,030,105) (439,818,708)
Net change resulting from Class A Share transactions (45,439,533) (17,784,588)
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
SEPTEMBER 30, MARCH 31,
CLASS B SHARES 1996 1996
<S> <C> <C>
Shares sold 9,513,273 18,064,236
Shares issued to shareholders in payment of distributions declared 67,543 92,772
Shares redeemed (12,833,348) (8,884,505)
Net change resulting from Class B Share transactions (3,252,532) 9,272,503
Net change resulting from share transactions (48,692,065) (8,512,085)
</TABLE>
At September 30, 1996, capital paid-in aggregated $658,238,890.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Advisers, the Trust's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee based on the average daily net assets of the Trust as follows:
0.50% on the first $500 million, 0.475% on the next $500 million, 0.45% on
the next $500 million, 0.425% on the next $500 million, and 0.40%
thereafter.
The Adviser may voluntarily choose to waive any portion of its fee. The
Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The fee paid to FServ 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.
DISTRIBUTION SERVICES FEE -- The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
the Trust will compensate Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Trust to finance activities intended
to result in the sale of the Trust's Class B Shares. The Plan provides that
the Trust may incur distribution expenses up to 0.75% of the average daily
net assets of the Class B Shares, annually, to compensate FSC.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Trust will pay
FSS up to 0.25% of average daily net assets of the Trust for the period. The
fee paid to FSS is used to finance certain services for shareholders and to
maintain shareholder accounts. FSS may voluntarily choose to waive any
portion of its fee. FSS can modify or terminate this voluntary waiver at any
time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Trust. The fee paid to FSSC
is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ 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.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Edward C. Gonzales
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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. 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.
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[Graphic]
Cusip 531485100
Cusip 531485209
8110106 (11/96)
