1933 Act File No. 2-65447
1940 Act File No. 811-2956
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ..............................
Post-Effective Amendment No.39.................................... X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No.29......................................................... X
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LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on May 31, 1997 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i) on pursuant to
paragraph (a) (i). 75 days after filing pursuant to paragraph
(a)(ii) on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a previously
filed post-effective
amendment.
<PAGE>
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on May 15, 1997 ; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940,
and, pursuant to Rule 24f-2(b)(2), need not file the Notice.
Copies To:
Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
<PAGE>
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of LIBERTY U.S.
GOVERNMENT MONEY MARKET TRUST (the "Trust"), consists of one
investment portfolio with two classes of shares: (1) Class A Shares
and (2) Class B Shares, and is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page....................(1-2) Cover Page.
Item 2. Synopsis......................(1-2) General Information.
Item 3. Condensed Financial
Information..................(1-2) Summary of Trust Expenses;
(1-2) Financial Highlights.
Item 4. General Description of
Registrant..................(1-2) Performance Information;
(1-2) Investment Information;
(1-2) Investment Objective;
(1-2) Investment Policies;
(1-2) Investment Limitations.
Item 5.
Management of the Trust(1-2)
Trust Information;
(1-2) Management of the Trust;
(1-2) Distribution of Shares;
(1-2) Administration of the Trust.
Item 6. Capital Stock and Other
Securities..................(1-2) Account and Share Information;
(1-2) Tax Information;
(1-2) Federal Income Tax;
(1-2) State and Local Taxes.
Item 7. Purchase of Securities Being
Offered.......................(1-2) Net Asset Value;
(1-2) How To Purchase Shares;
(1-2) Special Purchase Features;
(2) Conversion of Class B Shares; (1-2)
Exchange Privilege; (1) Class A Shares;
(2) Class B Shares;
(1-2) Requirements for Exchange;
(1-2) Tax Consequences;
(1-2) Making an Exchange
(1-2) Telephone Instructions.
Item 8. Redemption or Repurchase.....(1-2) How To Redeem Shares;
(1-2) Special Redemption Features;
(1-2) Contingent Deferred Sales Charge.
Item 9. Pending Legal Proceedings...................None.
<PAGE>
<TABLE>
<CAPTION>
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<S> <C> <C>
Item 10. Cover Page..................................(1-2) Cover Page.
Item 11. Table of Contents...........................(1-2) Table of Contents.
Item 12. General Information and
History (1-2) About Federated Investors.
Item 13. Investment Objectives and
Policies....................................(1-2) Investment Policies; (1-2) Investment Limitations.
Item 14. Management of the Fund....... (1-2) Liberty U.S. Government Money Market Trust Management.
Item 15. Control Persons and Principal
Holders of Securities (1-2) Share Ownership.
Item 16. Investment Advisory and Other
Services....................................(1-2) Investment Advisory Services; (1-2) Other Services;
Item 17. Brokerage Allocation........................(1-2) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered.................(1-2) Determining Net Asset Value;
(1-2) Redemption in Kind.
Item 20. Tax Status..................................(1-2) The Trust's Tax Status.
Item 21. Underwriters................................(1-2) Distribution Plan and Shareholder Services.
Item 22. Calculation of Yield Quotations
of Money Market Funds (1-2) Performance Information.
Item 23. Financial Statements........................(1-2) Financial Statements (Financial Statements are
incorporated by reference to the Annual Report of
Registrant dated March 31, 1997) (File Nos. 2-65447 and
811-2956)
</TABLE>
Liberty U.S. Government Money Market Trust
Class A Shares, Class B Shares
PROSPECTUS
The shares of Liberty U.S. Government Money Market Trust (the "Trust")
offered by this prospectus represent interests in an open-end
management investment company (a mutual fund). The Trust invests in
short-term U.S. government securities to achieve stability of
principal and current income.
The Trust offers two classes of shares. Class A Shares are offered at
net asset value; Class B Shares are designed primarily for temporary
investment as part of a special investment program in Class B Shares,
and unlike shares of most money market funds, are offered at net asset
value, plus an annual distribution fee, an annual service fee, and a
declining contingent deferred sales charge on redemptions made within
six years.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK AND ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION ("FDIC"), THE FEDERAL RESERVE BOARD, OR ANY
OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE TRUST
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE;
THERE CAN BE NO ASSURANCE THAT THE TRUST WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know
before you invest in the Trust. Keep this prospectus for future
reference.
The Trust has also filed a Statement of Additional Information dated
May 31, 1997, with the Securities and Exchange Commission ("SEC"). The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy
of the Statement of Additional Information or a paper copy of this
prospectus, if you have received your prospectus electronically, free
of charge by calling 1-800-341-7400. To obtain other information, or
make inquiries about the Trust, contact the Trust at the address
listed in the back of this prospectus. The Statement of Additional
Information, material incorporated by reference into this document,
and other information regarding the Trust is maintained electronically
with the SEC at Internet Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated May 31, 1997
TABLE OF CONTENTS
Summary of Trust Expenses 1
Financial Highlights -- Class A Shares 2
Financial Highlights -- Class B Shares 3
General Information 4
Investment Information 4
Investment Objective 4
Investment Policies 4
Investment Limitations 5
Trust Information 5
Management of the Trust 5
Distribution of Shares 6
Administration of the Trust 7
Net Asset Value 7
How to Purchase Shares 7
Purchasing Shares Through a Financial Institution 8
Purchasing Shares by Wire 8
Purchasing Shares by Check 8
Special Purchase Features 8
Conversion of Class B Shares 8
Exchange Privilege 8
Class A Shares 8
Class B Shares 9
Requirements for Exchange 9
Tax Consequences 9
Making an Exchange 9
Telephone Instructions 9
How to Redeem Shares 9
Redeeming Shares Through a Financial Institution 9
Redeeming Shares by Telephone 10
Redeeming Shares by Mail 10
Special Redemption Features 10
Contingent Deferred Sales Charge 11
Account and Share Information 12
Dividends 12
Capital Gains 12
Certificates and Confirmations 12
Accounts with Low Balances 12
Voting Rights 12
Tax Information 13
Federal Income Tax 13
State and Local Tax 13
Performance Information 13
SUMMARY OF TRUST EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B
<S <C> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering None None
price)
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)(1) 0.00% 5.50%
Redemption Fee (as a percentage of amount redeemed, if applicable) None None
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(2) 0.40% 0.40%
12b-1 Fee None 0.75%
Shareholder Services Fee (after waiver)(3) 0.05% 0.11%
Total Other Expenses 0.66% 0.72%
Total Operating Expenses(4) 1.06% 1.87%(5)
</TABLE>
(1) Shareholders of Class A Shares who purchased shares with the
proceds of a redemption of shares of an unaffiliated investment
company purchased and redeemed with a sales charge and not distributed
by Federated Securities Corp. may be charged a contingent deferred
sales charge of 0.50% for redemptions made within one year of
purchase. For shareholders of Class B Shares, the contingent deferred
sales charge is 5.50% in the first year declining to 1.00% in the
sixth year and 0.00% thereafter. For a more complete description, see
"Contingent Deferred Sales Charge."
(2) The management fee has been reduced to reflect the voluntary
waiver of a portion of the management fee. The adviser can terminate
this voluntary waiver at any time at its sole discretion. Currently,
the maximum effective rate for the management fee is 0.49%. For a more
complete description, see "Management of the Trust."
(3) The shareholder services fee has been reduced to reflect the
voluntary waiver of a portion of the shareholder services fee. The
shareholder service provider can terminate this voluntary waiver at
any time at its sole discretion. The maximum shareholder services fee
is 0.25%.
(4) The total operating expenses for Class A Shares and Class B Shares
would have been 1.35% and 2.10%, respectively, absent the voluntary
waivers described in note 2 and note 3 above.
(5) Class B Shares convert to Class A Shares (which pay lower ongoing
expenses) approximately eight years after purchase.
The purpose of this table is to assist an investor in understanding
the various costs and expenses that a shareholder of the Trust will
bear, either directly or indirectly. For more complete descriptions of
the various costs and expenses, see "How to Purchase Shares" and
"Trust Information." Wire-transferred redemptions of less than $5,000
may be subject to additional fees.
LONG-TERM SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE
MAXIMUM FRONT-END SALES CHARGES PERMITED UNDER THE RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
<TABLE>
<CAPTION>
EXAMPLE CLASS A CLASS B
<S> <C> <C>
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.
1 Year $ 11 $ 76
3 Years $ 34 $103
5 Years $ 58 $124
10 Years $129 $197
You would pay the following expenses on the same investment, assuming no redemption.
1 Year $ 11 $ 19
3 Years $ 34 $ 59
5 Years $ 58 $101
10 Years $129 $197
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS -- CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The follow table has been audited by Arthur Andersen LLP, the Trust's
independent accountants. Their report, dated April 24, 1997, on the
Trust's financial statements for the year ended March 31, 1997, and on
the following table for each of the periods presented, is included in
the Annual Report, which is incorporated by reference. This table
should be read in conjunction with the Trust's financial statements
and notes thereto, which may be obtained from the Trust.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1997 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 0.04 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 (0.04) (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) 4.43% 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 income 4.33% 4.78% 3.83% 2.31% 2.69% 4.59% 6.89% 7.94%
7.19% 5.90%
Expense 0.29% 0.20% -- -- -- -- -- --
- -- --
waiver/reimbursement(b)
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $658,731 $697,472 $715,257 $805,907 $919,883 $1,173,685 $1,393,380 $1,443,347 $1,386,704
$1,358,694
</TABLE>
(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.
FINANCIAL HIGHLIGHTS -- CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The follow table has been audited by Arthur Andersen LLP, the Trust's
independent accountants. Their report, dated April 24, 1997, on the
Trust's financial statements for the year ended March 31, 1997, and on
the following table for each of the periods presented, is included in
the Annual Report, which is incorporated by reference. This table
should be read in conjunction with the Trust's financial statements
and notes thereto, which may be obtained from the Trust.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1997 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 0.04 0.04 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.04) (0.04) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 3.59% 4.04% 1.14%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.87% 1.91% 1.95%*
Net investment income 3.58% 3.91% 4.15%*
Expense waiver/reimbursement(c) 0.23% 0.14% --
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $28,337 $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.
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated August 30, 1979. The Trust is permitted,
under its Declaration of Trust, to offer separate series of shares
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 (the "Trustees")
has established two classes of shares known as Class A Shares and
Class B Shares (individually and collectively, as the context
requires, "Shares").
Shares of the Trust are designed primarily for individuals and
institutions as a convenient means of accumulating an interest in a
professionally managed portfolio primarily limited to U.S. government
obligations. The Trust attempts to stabilize the value of a Share at
$1.00. Shares are currently sold and redeemed at that price. However,
a contingent deferred sales charge is imposed under certain
circumstances. The minimum initial investment for Class A Shares and
Class B Shares is $500. However, the minimum initial investment for a
retirement account in any class is $50. Subsequent investments in any
class must be in amounts of at least $100, except for retirement plans
which must be in amounts of at least $50.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Trust is stability of principal and
current income consistent with stability of principal. This investment
objective cannot be changed without shareholder approval. While there
is no assurance that the Trust will achieve its investment objective,
it endeavors to do so by complying with the diversification and other
requirements of Rule 2a-7 under the Investment Company Act of 1940
which regulates money market mutual funds and by following the
investment policies described in this prospectus.
INVESTMENT POLICIES
The Trust pursues its investment objective by investing primarily in a
portfolio of U.S. government securities maturing in 13 months or less.
The average maturity of the securities in the Trust's portfolio,
computed on a dollar-weighted basis, will be 90 days or less. Unless
indicated otherwise, the investment policies may not be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS
The Trust invests primarily in U.S. government securities. These instruments
are either issued or guaranteed by the U.S. government, its agencies, or
instrumentalities. These securities include, but are not limited to:
* direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds;
* notes, bonds, and discount notes issued or guaranteed by U.S. government
agencies and instrumentalities supported by the full faith and credit of
the United States;
* notes, bonds, and discount notes of U.S. government agencies or
instrumentalities which receive or have access to federal funding;
* notes, bonds, and discount notes of other U.S. government
instrumentalities supported only by the credit of the instrumentalities;
and
* short-term instruments of banks and savings associations where the
principal amount of the instrument is fully insured by the Bank
Insurance Fund or the Savings Association Fund, both of which are
administered by the FDIC.
Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government are backed by the full faith and credit of the U.S.
Treasury. No assurances can be given that the U.S. government will provide
financial support to other agencies or instrumentalities, since it is not
obligated to do so. These instrumentalities are supported by:
* the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
* discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
* the credit of the agency or instrumentality.
INSTRUMENTS OF BANKS AND SAVINGS ASSOCIATIONS
The short-term instruments of banks and savings associations which the
Trust can purchase will comprise no more than 20% of the Trust's total
assets.
REPURCHASE AGREEMENTS
Certain securities in which the Trust invests may be purchased
pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized
financial institutions sell securities to the Trust and agree at the
time of sale to repurchase them at a mutually agreed upon time and
price. To the extent that the seller does not repurchase the
securities from the Trust, the Trust could receive less than the
repurchase price on any sale of such securities.
AGENCY MASTER DEMAND NOTES
The Trust may enter into master demand notes with various federal
agencies and instrumentalities. Under a master demand note, the Trust
has the right to increase or decrease the amount of the note on a
daily basis within specified maximum and minimum amounts. Master
demand notes also normally provide for full or partial repayment upon
seven or more days notice by either the Trust or the borrower and bear
interest at a variable rate. The Trust relies on master demand notes,
in part, to provide daily liquidity. To the extent that the Trust
cannot obtain liquidity through master demand notes, it may be
required to maintain a larger cash position, invest more assets in
securities with current maturities or dispose of assets at a gain or
loss to maintain sufficient liquidity. WHEN-ISSUED AND DELAYED
DELIVERY TRANSACTIONS
The Trust may purchase securities on a when-issued or delayed delivery
basis. These transactions are arrangements in which the Trust
purchases securities with payment and delivery scheduled for a future
time. The seller's failure to complete these transactions may cause
the Trust to miss a price or yield considered to be advantageous.
Settlement dates may be a month or more after entering into these
transactions, and the market values of the securities purchased may
vary from the purchase prices.
The Trust may dispose of a commitment prior to settlement if the
adviser deems it appropriate to do so. In addition, the Trust may
enter into transactions to sell its purchase commitments to third
parties at current market values and simultaneously acquire other
commitments to purchase similar securities at later dates. The Trust
may realize short-term profits or losses upon the sale of such
commitments. INVESTMENT LIMITATIONS
The Trust will not borrow money or pledge securities except, under
certain circumstances, the Trust may borrow up to one-third of the
value of its total assets and pledge up to 10% of the value of those
assets to secure such borrowings.
The above investment limitations cannot be changed without shareholder
approval. The following limitation, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in this limitation becomes effective.
The Trust will not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements providing for settlement
in more than seven days after notice.
TRUST INFORMATION
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles
the Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER
Investment decisions for the Trust are made by Federated Advisers, the
Trust's investment adviser, subject to direction by the Trustees. The
adviser continually conducts investment research and supervision for
the Trust and is responsible for the purchase and sale of portfolio
instruments.
ADVISORY FEES
The adviser receives an annual investment advisory fee based on the
Trust's average daily net assets as shown in the chart below:
ADVISORY FEE AS
PERCENTAGE OF
AVERAGE DAILY NET ASSETS AVERAGE DAILY NET ASSETS
First $500 million .50%
Second $500 million .475%
Third $500 million .45%
Fourth $500 million .425%
Over $2 billion .40%
The adviser may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Trust, but reserves the right to
terminate such waiver or reimbursement at any time at its sole
discretion.
ADVISER'S BACKGROUND
Federated Advisers, a Delaware business trust, organized on April 11,
1989, is a registered investment adviser under the Investment Advisers
Act of 1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by a trust,
the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated
Investors. Federated Advisers and other subsidiaries of Federated
Investors serve as investment advisers to a number of investment
companies and private accounts. Certain other subsidiaries also
provide administrative services to a number of investment companies.
With over $110 billion invested across over 300 funds under management
and/or administration by its subsidiaries, as of December 31, 1996,
Federated Investors is one of the largest mutual fund investment
managers in the United States. With more than 2,000 employees,
Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through
4,500 financial institutions nationwide. Both the Trust and the
adviser have adopted strict codes of ethics governing the conduct of
all employees who manage the Trust and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Trust's
shareholders and must place the interests of shareholders ahead of the
employees' own interests. Among other things, the codes: require
preclearance and periodic reporting of personal securities
transactions; prohibit personal transactions in securities being
purchased or sold, or being considered for purchase or sale, by the
Trust; prohibit purchasing securities in initial public offerings; and
prohibit taking profits on securities held for less than sixty days.
Violations of the codes are subject to review by the Trustees, and
could result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Shares of the
Trust. It is a Pennsylvania corporation organized on November 14, 1969, and
is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
The distributor will pay dealers an amount equal to 5.50% of the net
asset value of Class B Shares directly purchased by their clients or
customers. These payments will be made directly by the distributor
from its assets, and will not be made from the assets of the Trust.
Dealers may voluntarily waive receipt of all or any portion of these
payments. The distributor may pay a portion of the distribution fee
discussed below to financial institutions that waive all or any
portion of the advanced payments.
DISTRIBUTION PLAN (CLASS B SHARES ONLY) AND SHAREHOLDER SERVICES
Under a distribution plan adopted in accordance with Investment
Company Act Rule 12b-1 (the "Distribution Plan"), Class B Shares will
pay to the distributor an amount, computed at an annual rate of 0.75%
of the average daily net assets of the Class B Shares to finance any
activity which is principally intended to result in the sale of Shares
subject to the Distribution Plan. Because distribution fees to be paid
by the Trust to the distributor may not exceed an annual rate of 0.75%
of Class B Shares' average daily net assets, it will take the
distributor a number of years to recoup the expenses it has incurred
for its distribution and distribution-related services pursuant to the
Distribution Plan. The distributor may select financial institutions
such as banks, fiduciaries, custodians for public funds, investment
advisers, and broker/dealers to provide sales services or
distribution-related support services as agents for their clients or
customers. The Distribution Plan is a compensation-type plan. As such,
the Trust makes no payments to the distributor except as described
above. Therefore, the Trust does not pay for unreimbursed expenses of
the distributor, including amounts expended by the distributor in
excess of amounts received by it from the Trust, interest, carrying or
other financing charges in connection with excess amounts expended, or
the distributor's overhead expenses. However, the distributor may be
able to recover such amounts or may earn a profit from future payments
made by the Trust under the Distribution Plan.
In addition, the Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of
Federated Investors, under which the Trust may make payments up to
0.25% of the average daily net assets of the Trust to obtain personal
services for shareholders and for the maintenance of shareholder
accounts. Under the Shareholder Services Agreement, Federated
Shareholder Services will either perform shareholder services or will
select financial institutions to perform shareholder services.
Financial institutions will receive fees based upon shares owned by
their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined from time to time
by the Trust, the distributor of Federated Shareholder Services, as
appropriate.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS
With respect to Class A Shares and Class B Shares, in addition to
payments made pursuant to the Distribution Plan and Shareholder
Services Agreement, Federated Securities Corp. and Federated
Shareholder Services, from their own assets, may pay financial
institutions supplemental fees for the performance of substantial
sales services, distribution-related support services, or shareholder
services. The support may include sponsoring sales, educational and
training seminars for their employees, providing sales literature, and
engineering computer software programs that emphasize the attributes
of the Trust. Such assistance will be predicated upon the amount of
Shares the financial institution sells or may sell, and/or upon the
type and nature of sales or marketing support furnished by the
financial institution. Any payments made by the distributor may be
reimbursed by the adviser or its affiliates.
ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES
Federated Services Company, a subsidiary of Federated Investors,
provides administrative personnel and services (including certain
legal and financial reporting services) necessary to operate the Trust
at an annual rate which relates to the average aggregate daily net
assets of all funds advised by affiliates of Federated Investors
specified below:
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at
least $125,000 per portfolio and $30,000 per each additional class of
Shares. Federated Services Company may choose voluntarily to waive a
portion of its fee.
NET ASSET VALUE
The Trust attempts to stabilize the net asset value of Shares at $1.00
by valuing the portfolio securities using the amortized cost method.
The net asset value per Share is determined by subtracting liabilities
from total assets and dividing the remainder by the number of Shares
outstanding. The Trust cannot guarantee that its net asset value will
always remain at $1.00 per Share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern
time), and as of the close of trading (normally 4:00 p.m., Eastern
time) on the New York Stock Exchange, Monday through Friday, except on
New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
HOW TO PURCHASE SHARES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days which the New York
Stock Exchange is open for business. Shares may be purchased as
described below, either through a financial institution (such as a
bank or broker/dealer) or by wire or by check directly from the Trust,
with a minimum initial investment of $500 or more or additional
investments of as little as $100. The minimum initial and subsequent
investments for retirement plans are only $50. Financial institutions
may impose different minimum investment requirements on their
customers.
In connection with any sale, Federated Securities Corp. may from time
to time offer certain items of nominal value to any shareholder or
investor. The Trust reserves the right to reject any purchase request.
An account must be established at a financial institution or by
completing, signing, and returning the new account form available from
the Trust before Shares can be purchased.
PURCHASING SHARES THROUGH A
FINANCIAL INSTITUTION
Investors may purchase Shares through a financial institution which
has a sales agreement with the distributor. Orders are considered
received when the Trust receives payment by wire or converts payment
by check from the financial institution into federal funds. It is the
financial institution's responsibility to transmit orders promptly.
Financial institutions may charge additional fees for their services.
PURCHASING SHARES BY WIRE
Shares may be purchased by wire by calling the Trust before 3:00 p.m.
(Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00
p.m. (Eastern time) in order to begin earning dividends that same day.
Federal funds should be wired as follows: Federated Shareholder
Services Company, c/o State Street Bank and Trust Company, Boston, MA;
Attention: EDGEWIRE; For Credit to: Liberty U.S. Government Money
Market Trust -- Share Class name; Fund Number (this number can be
found on the account statement or by contacting the Trust); Group
Number or Order Number; Nominee or Institution Name; and ABA Number
011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted. Questions on wire purchases should be
directed to your shareholder services representative at the telephone
number listed on your account statement.
PURCHASING SHARES BY CHECK
Shares may be purchased by sending a check to Federated Shareholder Services
Company, P.O. Box 8600, Boston, MA 02266-8600. The check should be made
payable to Liberty U.S. Government Money Market Trust -- Share Class name.
Please include an account number on the check. Orders by mail are considered
received when payment by check is converted into federal funds (normally the
business day after the check is received), and Shares begin earning
dividends the next day.
SPECIAL PURCHASE FEATURES
SYSTEMATIC INVESTMENT PROGRAM
A minimum of $100 can be automatically withdrawn periodically from the
shareholder's checking account at an Automated Clearing House ("ACH")
member and invested in Trust Shares. Shareholders should contact their
financial institution or the Trust to participate in this program.
CONVERSION OF CLASS B SHARES
Class B Shares will automatically convert into Class A Shares on or
around the fifteenth of the month, eight full years after the purchase
date, except as noted below, and will no longer be subject to a
distribution services fee (see "Distribution of Shares"). Such
conversion will be on the basis of the relative net asset value per
Share, without the imposition of any sales charge, fee or other
charge. Class B Shares acquired by exchange from Class B Shares of
certain other funds for which affiliates of Federated Investors serve
as investment advisers or principal underwriter (the "Federated
Funds") as listed herein will convert into Class A Shares based on the
time of the initial purchase. For purposes of conversion to Class A
Shares, Shares purchased through the reinvestment of dividends and
distributions paid on Class B Shares will be considered to be held in
a separate sub-account. Each time any Class B Shares in the
shareholder's account (other than those in the sub-account) convert to
Class A Shares, an equal pro rata portion of the Class B Shares in the
sub-account will also convert to Class A Shares. The conversion of
Class B Shares to Class A Shares is subject to the continuing
availability of a ruling form the Internal Revenue Service or an
opinion of counsel that such conversions will not constitute taxable
events for federal tax purposes. There can be no assurance that such
ruling or opinion will be available, and the conversion of Class B
Shares to Class A Shares will not occur if such ruling or opinion is
not available. In such event, Class B Shares would continue to be
subject to higher expenses than Class A Shares for an indefinite
period.
Orders for $250,000 or more of Class B Shares will automatically be
invested in Class A Shares.
EXCHANGE PRIVILEGE
CLASS A SHARES
Class A Shareholders may exchange all or some of their Shares for Class A
Shares of other Federated Funds at net asset value. Neither the Trust nor
any of the Federated Funds imposes any additional fees on exchanges.
Shareholders in certain other Federated Funds may exchange all or some of
their shares for Class A Shares.
CLASS B SHARES
Class B Shareholders may exchange all or some of their Shares for
Class B Shares of other Federated Funds. (Not all Federated Funds
currently offer Class B Shares. Contact your financial institution
regarding the availability of other Class B Shares of the Federated
Funds). Exchanges are made at net asset value without being assessed a
contingent deferred sales charge on the exchanged Shares. To the
extent that a shareholder exchanges Shares for Class B Shares of other
Federated Funds, the time for which the exchanged-for Shares are to be
held will be added to the time for which exchanged-from Shares were
held for purposes of satisfying the applicable holding period.
Please contact your financial institution directly or Federated
Securities Corp. at 1-800-245-5051 for information on and prospectuses
for the Federated Funds in which your Shares may be exchanged free of
charge.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange Shares having a net
asset value equal to the minimum investment requirements of the fund
into which the exchange is being made. Before the exchange, the
shareholder must receive a prospectus of the fund for which the
exchange is being made. Upon receipt of proper instructions and
required supporting documents, Shares submitted for exchange are
redeemed and proceeds invested in the same class of shares of the
other fund. The Trust reserves the right to reject any exchange. The
exchange privilege may be modified or terminated at any time.
Shareholders will be notified of the modification or termination of
the exchange privilege. TAX CONSEQUENCES
An exercise of the exchange privilege is treated as a sale for federal
income tax purposes. Depending upon the circumstances, a capital gain
or loss may be realized.
MAKING AN EXCHANGE
Instructions for exchanges for Federated Funds may be given in writing
or by telephone. Written instructions may require a signature
guarantee. Shareholders of the Trust may have difficulty in making
exchanges by telephone through brokers and other financial
institutions during times of drastic economic or market changes. If a
shareholder cannot contact his broker or financial institution by
telephone, it is recommended that an exchange request be made in
writing and sent by overnight mail to Federated Shareholder Services
Company, 1099 Hingham Street, Rockland, MA 02370-3317.
TELEPHONE INSTRUCTIONS
Telephone instructions made by the investor may be carried out only if
a telephone authorization form completed by the investor is on file
with the Trust. If the instructions are given by a broker, a telephone
authorization form completed by the broker must be on file with the
Trust. If reasonable procedures are not followed by the Trust, it may
be liable for losses due to unauthorized or fraudulent telephone
instructions. Shares may be exchanged between two funds by telephone
only if the two funds have identical shareholder registrations.
Any Shares held in certificate form cannot be exchanged by telephone
but must be forwarded to: Federated Shareholder Services Company, P.O.
Box 8600, Boston, Massachusetts 02266-8600 and deposited to the
shareholder's account before being exchanged. Telephone exchange
instructions are recorded and will be binding upon the shareholder.
Such instructions will be processed as of 4:00 p.m. (Eastern time) and
must be received by the Trust before that time for Shares to be
exchanged the same day. Shareholders exchanging into a fund will begin
receiving dividends the following business day. This privilege may be
modified or terminated at any time.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value next determined after
Federated Shareholder Services Company receives the redemption
request. Redemptions will be made on days on which the Trust computes
its net asset value. Redemption requests must be received in proper
form and can be made as described below.
REDEEMING SHARES THROUGH A
FINANCIAL INSTITUTION
Shares may be redeemed by contacting the shareholder's financial
institution. Shares will be redeemed at the net asset value next
determined after Federated Services Company receives the redemption
request. According to the shareholder's instructions, redemption
proceeds can be sent to the financial institution or to the
shareholder by check or by wire. The financial institution is
responsible for promptly submitting redemption requests and providing
proper written redemption instructions. Customary fees and commissions
may be charged by the financial institution for this service.
REDEEMING SHARES BY TELEPHONE
Redemptions in any amount may be made by calling the Trust provided
the Trust has a properly completed authorization form. These forms can
be obtained from Federated Securities Corp. Proceeds from redemption
requests received before 12:00 noon (Eastern time) will be wired the
same day to the shareholder's account at a domestic commercial bank
which is a member of the Federal Reserve System, but will not include
that day's dividend. Proceeds from redemption requests received after
that time include that day's dividend but will be wired the following
business day. Under limited circumstances, arrangements may be made
with the distributor for same-day payment of proceeds, without that
day's dividend, for redemption requests received before 2:00 p.m.
(Eastern time). Proceeds from redeemed shares purchased by check or
through ACH will not be wired until that method of payment has
cleared. Proceeds from redemption requests on holidays when wire
transfers are restricted will be wired the following business day.
Questions about telephone redemptions on days when wire transfers are
restricted should be directed to your shareholder services
representative at the telephone number listed on your account
statement.
Telephone instructions may be recorded and if reasonable procedures
are not followed by the Trust, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. In the event of
drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If this occurs, "Redeeming
Shares By Mail" should be considered. If at any time the Trust shall
determine it necessary to terminate or modify the telephone redemption
privilege, shareholders would be promptly notified.
The financial institution which maintains investor accounts with the
Trust must do so on a fully disclosed basis unless it accounts for
Share ownership periods used in calculating the contingent deferred
sales charge (See "Contingent Deferred Sales Charge"). In addition,
advance payments made to financial institutions may be subject to
reclaim by the distributor for accounts transferred to financial
institutions which do not maintain investor accounts on a fully
disclosed basis and do not account for Share ownership periods (See
"Supplemental Payments to Financial Institutions").
REDEEMING SHARES BY MAIL
Shares may be redeemed in any amount by mailing a written request to:
Federated Shareholder Services Company, P.O. Box 8600, Boston, MA
02266-8600. If share certificates have been issued, they should be
sent unendorsed with the written request by registered or certified
mail to the address noted above.
The written request should state: the Trust name and the Share Class
designation; the account name as registered with the Trust; the
account number; and the number of Shares to be redeemed or the dollar
amount requested. All owners of the account must sign the request
exactly as the Shares are registered. Normally, a check for the
proceeds is mailed within one business day, but in no event more than
seven days, after the receipt of a proper written redemption request.
Dividends are paid up to and including the day that a redemption
request is processed.
Shareholders requesting a redemption of any amount to be sent to an
address other than that on record with the Trust or a redemption
payable other than to the shareholder of record must have their
signatures guaranteed by a commercial or savings bank, trust company
or savings association whose deposits are insured by an organization
which is administered by the FDIC; a member firm of a domestic stock
exchange; or any other "eligible guarantor institution," as defined in
the Securities Exchange Act of 1934. The Trust does not accept
signatures guaranteed by a notary public.
SPECIAL REDEMPTION FEATURES
CHECK WRITING
Upon request, a checking account will be established to allow
shareholders to redeem their Trust Shares. Shareholder accounts will
continue to receive the daily dividend declared on the Shares to be
redeemed until the check is presented to UMB Bank, N.A., the bank
responsible for administering the check writing program, for payment.
However, checks should never be made payable or sent to UMB Bank, N.A.
or the Trust to redeem Shares, and a check may not be written to close
an account.
DEBIT CARD
Upon request, a debit account will be established. This account allows
shareholders to redeem Shares by using a debit card. A fee will be
charged to the account for this service.
SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000, other than
retirement accounts subject to required minimum distributions, a
systematic withdrawal program may be established whereby automatic
redemptions are made from the account and transferred electronically
to any commercial bank, savings bank, or credit union that is an ACH
member. Shareholders may apply for participation in this program
through their financial institutions or the Trust. CONTINGENT
DEFERRED SALES CHARGE
Shareholders may be subject to a contingent deferred sales charge upon
redemption of their Shares under the following circumstances:
CLASS A SHARES
Class A Shares purchased through exchange from another Federated Fund
which was purchased under a periodic special offering with the
proceeds of a redemption of shares of an unaffiliated investment
company purchased or sold with a sales charge and not distributed by
Federated Securities Corp. may be charged a contingent deferred sales
charge of 0.50% for redemptions made within one full year of purchase.
Any applicable contingent deferred sales charge will be imposed on the
lesser of the net asset value of the redeemed Shares at the time of
purchase or the net asset value of the redeemed Shares at the time of
redemption. CLASS B SHARES
Shareholders redeeming Class B Shares from their Trust accounts within
six full years of the purchase date of those Shares will be charged a
contingent deferred sales charge by the Trust's distributor. Any
applicable contingent deferred sales charge will be imposed on the
lesser of the net asset value of the redeemed Shares at the time of
purchase or the net asset value of the redeemed Shares at the time of
redemption in accordance with the following schedule:
YEARS OF REDEMPTION CONTINGENT DEFERRED
AFTER PURCHASE SALES CHARGE
First 5.50%
Second 4.75%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh and thereafter 0.00%
The contingent deferred sales charge on Class B Shares will be
deducted from the redemption proceeds otherwise payable to the
shareholder and will be retained by the distributor. The contingent
deferred sales charge will not be imposed with respect to: (1) Shares
acquired through the reinvestment of dividends or distributions of
long-term capital gains; and (2) Shares held for more than six full
years from the date of purchase with respect to Class B Shares and one
full year from the date of purchase with respect to applicable Class A
Shares.
Redemptions will be processed in a manner intended to maximize the
amount of redemption which will not be subject to a contingent
deferred sales charge. In computing the amount of the applicable
contingent deferred sales charge, redemptions are deemed to have
occurred in the following order: (1) Shares acquired through the
reinvestment of dividends and long-term capital gains; (2) Shares held
for more than six full years from the date of purchase with respect to
Class B Shares and one full year from the date of purchase with
respect to applicable Class A Shares; (3) Shares held for fewer than
six years with respect to Class B Shares and one full year from the
date of purchase with respect to applicable Class A Shares on a
first-in, first-out basis. A contingent deferred sales charge is not
assessed in connection with an exchange of Trust Shares for shares of
other Federated Funds in the same class (see "Exchange Privilege").
Any contingent deferred sales charge imposed at the time the exchanged
for Shares are redeemed is calculated as if the shareholder had held
the Shares from the date on which he became a shareholder of the
exchanged-from Shares. Moreover, the contingent deferred sales charge
will be eliminated with respect to certain redemptions (see
"Elimination of Contingent Deferred Sales Charge").
ELIMINATION OF CONTINGENT DEFERRED SALES CHARGE
The contingent deferred sales charge will be eliminated with respect
to the following redemptions: (1) redemptions following the death or
disability, as defined in Section 72(m)(7) of the Internal Revenue
Code of 1986, of the last surviving shareholder; (2) redemptions
representing minimum required distributions from an Individual
Retirement Account or other retirement plan to a shareholder who has
attained the age of 701/2; (3) involuntary redemptions by the Trust of
Shares in shareholder accounts that do not comply with the minimum
balance requirements; and (4) qualifying redemptions of Class B Shares
under a Systematic Withdrawal Program. To qualify for elimination of
the contingent deferred sales charge through a Systematic Withdrawal
Program, the redemptions of Class B Shares must be from an account:
that is at least 12 months old, has all Trust distributions reinvested
in Trust Shares, and has a value of at least $10,000 when the
Systematic Withdrawal Program is established. Qualifying redemptions
may not exceed 1.00% monthly of the account value as periodically
determined by the Trust. For more information regarding the
elimination of the contingent deferred sales charge through a
Systematic Withdrawal Program contact your financial intermediary or
the Trust. No contingent deferred sales charge will be imposed on
redemptions of Shares held by Trustees, employees and sales
representatives of the Trust, the distributor, or affiliates of the
Trust or distributor, and their immediate family members; employees of
any financial institution that sells Shares of the Trust pursuant to a
sales agreement with the distributor; and spouses and children under
the age of 21 of the aforementioned persons. Finally, no contingent
deferred sales charge will be imposed on the redemption of Shares
originally purchased through a bank trust department, an investment
adviser registered under the Investment Advisers Act of 1940, or
retirement plans where the third party administrator has entered into
certain arrangements with Federated Securities Corp. or its
affiliates, or any other financial institution, to the extent that no
payments were advanced for purchases made through such entities. The
Trustees reserve the right to discontinue or modify the elimination of
the contingent deferred sales charge. Shareholders will be notified of
a discontinuation. Any Shares purchased prior to the termination of
such waiver would have the contingent deferred sales charge eliminated
as provided in the Trust's prospectus at the time of the purchase of
the Shares. If a shareholder making a redemption qualifies for an
elimination of the contingent deferred sales charge, the shareholder
must notify Federated Securities Corp. or the transfer agent in
writing that the shareholder is entitled to such elimination.
ACCOUNT AND SHARE INFORMATION
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional Shares of the Trust unless cash
payments are requested by writing to the Trust. Shares purchased by wire
before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares
purchased by check begin earning dividends the day after the check is
converted into federal funds.
CAPITAL GAINS
The Trust does not expect to realize any capital gains or losses. If
capital gains or losses were to occur, they could result in an
increase or decrease in dividends. The Trust will distribute in cash
or additional Shares any realized net long-term capital gains at least
once every 12 months.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Shareholder Services
Company maintains a Share account for each shareholder. Share
certificates are not issued unless requested by contacting the Trust
or Federated Shareholder Services Company in writing. Monthly
confirmations are sent to report all transactions as well as dividends
paid during the month.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Trust may redeem Shares in any account, except accounts maintained by
retirement plans, and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $500 due to
shareholder redemptions. Before Shares are redeemed to close an
account, the shareholder is notified in writing and allowed 30 days to
purchase additional Shares to meet the minimum requirement.
VOTING RIGHTS
Each Share of the Trust owned by a shareholder gives that shareholder
one vote in Trustee elections and other matters submitted to
shareholders for vote. All Shares of all classes 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. The
Trust is not required to hold annual shareholder meetings. Shareholder
approval will be sought only for certain changes in the Trust's
operation and for election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a
special meeting. A special meeting shall be called by the Trustees
upon the written request of shareholders owning at least 10% of the
outstanding Shares of the Trust.
TAX INFORMATION
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated
investment companies and to receive the special tax treatment afforded
to such companies.
Unless otherwise exempt, shareholders are required to pay federal
income tax on any dividends and other distributions received. This
applies whether dividends and distributions are received in cash or as
additional Shares.
STATE AND LOCAL TAXES
In the opinion of Houston, Donnelly & Meck, counsel to the Trust,
Shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent
that the portfolio securities in the Trust would be subject to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the
status of their accounts under state and local tax laws.
PERFORMANCE INFORMATION
From time to time, the Trust advertises its yield, effective yield and
total return. The performance figures will be calculated separately
for each class of Shares. Yield represents the annualized rate of
income earned on an investment over a seven-day period. It is the
annualized dividends earned during the period on an investment shown
as a percentage of the investment. The effective yield is calculated
similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will
be slightly higher than the yield because of the compounding effect of
this assumed reinvestment. Total return represents the change,
over a specified period of time, in the value of an investment in the
Shares after reinvesting all income distributions. It is calculated by
dividing that change by the initial investment and is expressed as a
percentage. From time to time, advertisements for the Trust may
refer to ratings, rankings, and other information in certain financial
publications and/or compare the Trust's performance to certain
indices.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Class A Shares
Class B Shares
Federated Investors Tower
Pittsburgh, PA 15222-3779
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, PA 15222-3779
INVESTMENT ADVISER
Federated Advisers
Federated Investors Tower
Pittsburgh, PA 15222-3779
CUSTODIAN
State Street Bank and
Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder
Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
2100 One PPG Place
Pittsburgh, PA 15222
Federated Securities Corp., Distributor
Cusip 531485100
Cusip 531485209
G00701-03 (5/97)
[Graphic]
Liberty U.S. Government Money Market Trust
Class A Shares, Class B Shares
PROSPECTUS
MAY 31, 1997
An Open-End
Management Investment Company
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
CLASS A SHARES
CLASS B SHARES
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of Liberty U.S. Government Money Market Trust (the "Trust")
dated May 31, 1997. This Statement is not a prospectus. You may
request a copy of a prospectus or a paper copy of this Statement, if
you have received it electronically, free of charge by calling
1-800-341-7400.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated May 31, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 531485100
Cusip 531485209
8062809B (5/97)
TABLE OF CONTENTS
INVESTMENT POLICIES 1
Acceptable Investments 1
When-Issued and Delayed Delivery Transactions 1
Repurchase Agreements 1
INVESTMENT LIMITATIONS 1
Selling Short and Buying on Margin 1
Issuing Senior Securities and Borrowing Money 1
Pledging Assets 1
Lending Cash or Securities 2
Investing in Restricted Securities 2
Investing in Illiquid Securities 2
Investing in Securities of Other Investment Companies 2
Investing for Control 2
Investing in Options 2
Regulatory Compliance 2
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST MANAGEMENT 2
Share Ownership 6
Trustee Compensation 7
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
Investment Adviser 7
Advisory Fees 8
BROKERAGE TRANSACTIONS 8
OTHER SERVICES 8
Trust Administration 8
Custodian and Portfolio Accountant 8
Transfer Agent 8
Independent Public Accountants 8
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES 9
DETERMINING NET ASSET VALUE 9
REDEMPTION IN KIND 9
Elimination of the Contingent
Deferred Sales Charge 10
MASSACHUSETTS PARTNERSHIP LAW 10
THE TRUST'S TAX STATUS 10
PERFORMANCE INFORMATION 10
Yield 10
Effective Yield 11
Total Return 11
Performance Comparisons 11
Economic and Market Information 11
ABOUT FEDERATED INVESTORS 11
Mutual Fund Market 12
Institutional Clients 12
Bank Marketing 12
Broker/Dealers and Bank Broker/Dealer Subsidiaries 12
FINANCIAL STATEMENTS 12
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be
changed by the Board of Trustees ("Trustees") without shareholder
approval. Shareholders will be notified before any material change in
these policies becomes effective.
ACCEPTABLE INVESTMENTS
Some of the short-term U.S. government securities the Trust may
purchase carry variable interest rates. These securities have a rate
of interest subject to adjustment at least annually. This adjusted
interest rate is ordinarily tied to some objective standard, such as
the 91-day U.S. Treasury bill rate. Variable interest rates will
reduce the changes in the market value of such securities from their
original purchase prices. Accordingly, the potential for capital
appreciation or capital depreciation should not be greater than that
of fixed interest rate U.S. government securities having maturities
equal to the interest rate adjustment dates of the variable rate U.S.
government securities. The Trust may purchase variable rate U.S.
government securities upon the determination by the Trustees that the
interest rate as adjusted will cause the instrument to have a current
market value that approximates its par value on the adjustment date.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Trust. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Trust in a dollar amount sufficient to make payment for
the securities to be purchased are: segregated on the Trust's records
at the trade date; marked to market daily; and maintained until the
transaction is settled. The Trust does not intend to engage in
when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of its
assets.
REPURCHASE AGREEMENTS
The Trust believes that under the regular procedures normally in
effect for custody of the Trust's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in
favor of the Trust and allow retention or disposition of such
securities. 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 guidelines established by the Trustees.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Trust will not purchase any portfolio securities or sell any
portfolio instruments short but it may obtain such short-term credits
as may be necessary for clearance of purchases and sales of portfolio
instruments.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Trust will not issue senior securities except as permitted by its
investment objective and policies. If a percentage limitation is
adhered to at the time of the investment, a later increase or decrease
in percentage resulting from any change in value or net assets will
not result in a violation of such restriction.
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then (a) only in amounts not
in excess of 5% of the value of its total assets or (b) in an amount
up to one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately
selling any portfolio instruments. If the value of the Trust's total
assets, including the amount borrowed, falls below 300% of its
borrowings the Trust will reduce its borrowings. This borrowing
provision is not for investment leverage but solely to facilitate
management of the portfolio by enabling the Trust to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. Interest paid by the Trust on
borrowed funds will not be available for investment. While any such
borrowings are outstanding, no portfolio instruments may be purchased
by the Trust.
PLEDGING ASSETS
The Trust will not mortgage, pledge, or hypothecate assets of the
Trust except in connection with any borrowings described in paragraph
(2) above, and in amounts not in excess of the lesser of the dollar
amount borrowed or 10% of the value of the Trust's assets at the time
of such borrowings.
LENDING CASH OR SECURITIES
The Trust will not lend any such assets except portfolio securities.
(This shall not prevent the purchase or holding of bonds, debentures,
notes, certificates of indebtedness or other debt securities of an
issuer, repurchase agreements or other transactions which are
permitted by the Trust's investment objective and policies or
Declaration of Trust.)
The above limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
INVESTING IN RESTRICTED SECURITIES
The Trust will not invest in securities subject to restrictions on
resale under federal securities law.
INVESTING IN ILLIQUID SECURITIES
The Trust will not invest more than 10% of the value of its net assets
in illiquid securities.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Trust will not purchase securities of other investment companies,
except as part of a merger, consolidation, or other acquisition.
INVESTING FOR CONTROL
The Trust will not invest in securities of a company for the purpose
of exercising control or management.
INVESTING IN OPTIONS
The Trust will not invest in puts, calls, straddles, spreads, or any
combination of them.
For purposes of the above limitations, the Trust considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings association having capital,
surplus, and undivided profits in excess of $100,000,000 at the time
of investment to be "cash items." Except with respect to borrowing
money, if a percentage limitation is adhered to at the time of
investment, a later increase or decrease in percentage resulting from
any change in value or net assets will not result in a violation of
such limitation. The Trust did not borrow money or pledge
securities in excess of 5% of the value of its net assets during the
last fiscal year and has no present intent to do so during the coming
fiscal year.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that are
more restrictive than its fundamental investment limitations, as set
forth in the prospectus and this Statement of Additional Information,
in order to comply with applicable laws and regulations, including the
provisions of and regulations under the Investment Company Act of
1940. In particular, the Trust will comply with the various
requirements of Rule 2a-7, which regulates money market mutual funds.
The Trust will determine the effective maturity of its investments
according to Rule 2a-7. The Trust may change these operational
policies to reflect changes in the laws and regulations without the
approval of its shareholders.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates, present
positions with Liberty U.S. Government Money Market Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director or Trustee of the
Funds. Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director, Member
of Executive Committee, University of Pittsburgh; Director or Trustee of the
Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.
William J. Copeland
One PNC Plaza -- 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
formerly, Vice Chairman and Director, PNC Bank, N.A., and PNC Bank
Corp.; Director, Ryan Homes, Inc.; Director or Trustee of the Funds.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director or
Trustee of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director,
University of Pittsburgh Medical Center -- Downtown; Member, Board of
Directors, University of Pittsburgh Medical Center; formerly,
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Director or Trustee of the Funds.
Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western
Region; Director or Trustee of the Funds.
Edward C. Gonzales*
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President and Trustee
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research, Ltd.;
Executive Vice President and Director, Federated Securities Corp.; Trustee,
Federated Shareholder Services Company; Trustee or Director of some of the
Funds; President, Executive Vice President and Treasurer of some of the
Funds.
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of
Massachusetts; formerly, President, State Street Bank and Trust
Company and State Street Boston Corporation; Director or Trustee of
the Funds.
Gregor F. Meyer
Boca Grande Club
Boca Grande, FL
Birthdate: October 6, 1926
Trustee
Attorney, Retired Member of Miller, Ament, Henny & Kochuba; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director or Trustee
of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director or Trustee of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., National Defense University, U.S. Space Foundation and Czech
Management Center; President Emeritus, University of Pittsburgh; Founding
Chairman, National Advisory Council for Environmental Policy and Technology,
Federal Emergency Management Advisory Board and Czech Management Center;
Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public Relations/Marketing/Conference Planning, Manchester Craftsmen's
Guild; Restaurant Consultant, Frick Art & History Center; Conference
Coordinator, University of Pittsburgh Art History Department; Director or
Trustee of the Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company, and
Federated Shareholder Services; Director, Federated Services Company;
President or Executive Vice President of the Funds; Director or Trustee of
some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman and
Trustee of the Company.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President, Secretary, and Treasurer
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.;
Trustee, Federated Shareholder Services Company; Director, Federated
Services Company; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and Secretary
of the Funds; Treasurer of some of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of
the Funds; Director or Trustee of some of the Funds.
* This Trustee is deemed to be an "interested person" as defined in
the Investment Company Act of 1940.
@ Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board between
meetings of the Board.
As referred to in the list of Trustees and Officers, "Funds" includes
the following investment companies: 111 Corcoran Funds; Arrow Funds;
Automated Government Money Trust; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated
American Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S.
Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust;
Federated High Income Bond Fund, Inc.; Federated High Yield Trust;
Federated Income Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Investment Portfolios; Federated Investment Trust;
Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust;
Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S. Government Securities Fund:
2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income
Securities, Inc.; High Yield Cash Trust; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Term Trust, Inc. -- 1999; Liberty U.S.
Government Money Market Trust; Liquid Cash Trust; Managed Series
Trust; Money Market Management, Inc.; Money Market Obligations Trust;
Money Market Obligations Trust II; Money Market Trust; Municipal
Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO
Monument Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
The Planters Funds; The Starburst Funds; The Starburst Funds II; The
Virtus Funds; Trust for Financial Institutions; Trust for Government
Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust
for U.S. Treasury Obligations; Wesmark Funds; and World Investment
Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Trust.
As of May 8, 1997, no shareholder of record owned 5% or more of the
outstanding Class A Shares of the Trust.
As of May 8, 1997, no shareholder of record owned 5% or more of the
outstanding Class B Shares of the Trust.
TRUSTEE COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
NAME, COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST* FROM FUND COMPLEX+
<S> <C> <C>
John F. Donahue, $0 $0 for the Trust and
Chairman and Trustee 56 other investment companies in the Fund Complex
Thomas G. Bigley, $1,636.75 $108,725 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John T. Conroy, Jr., $1,800.70 $119,615 for the Trust and
Trustee 56 other investment companies in the Fund Complex
William J. Copeland, $1,800.70 $119,615 for the Trust and
Trustee 56 other investment companies in the Fund Complex
James E. Dowd, $1,800.70 $119,615 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D., $1,636.75 $108,725 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Edward L. Flaherty, Jr., $1,800.70 $119,615 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Peter E. Madden, $1,636.75 $108,725 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Gregor F. Meyer, $1,636.75 $108,725 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John E. Murray, Jr., $1,636.75 $108,725 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Wesley W. Posvar, $1,636.75 $108,725 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Marjorie P. Smuts, $1,636.75 $108,725for the Trust and
Trustee 56 other investment companies in the Fund Complex
</TABLE>
* Information is furnished for the fiscal year ended March 31, 1997.
+ The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are
not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Trust's investment adviser is Federated Advisers. It is a subsidiary of
Federated Investors. All the voting securities of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, his wife and
his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust or any shareholder for
any losses that may be sustained in the purchase, holding, or sale of
any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties imposed upon it by its contract
with the Trust.
ADVISORY FEES
For its advisory services, Federated Advisers receives an annual
investment advisory fee as described in the prospectus. For the fiscal
years ended March 31, 1997, 1996, and 1995, the adviser earned
$3,311,087, $3,471,524, and $3,708,178, respectively, of which
$620,370, $0 and $0 were waived.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may
be furnished directly to the Trust or to the adviser and may include:
advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of
quotations for portfolio evaluations; and similar services. Research
services provided by brokers and dealers may be used by the adviser or
its affiliates in advising the Trust and other accounts. To the extent
that receipt of these services may supplant services for which the
adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise
reasonable business judgment in selecting brokers who offer brokerage
and research services to execute securities transactions. They
determine in good faith that commissions charged by such persons are
reasonable in relationship to the value of the brokerage and research
services provided. During the fiscal years ended March 31, 1997, 1996,
and 1995, the Trust paid no brokerage commissions. Although
investment decisions for the Trust are made independently from those
of the other accounts managed by the adviser, investments of the type
the Trust may make may also be made by those other accounts. When the
Trust and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in
a manner believed by the adviser to be equitable to each. In some
cases, this procedure may adversely affect the price paid or received
by the Trust or the size of the position obtained or disposed of by
the Trust. In other cases, however, it is believed that coordination
and the ability to participate in volume transactions will be to the
benefit of the Trust.
OTHER SERVICES
TRUST ADMINISTRATION
Federated Services Company, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee
as described in the prospectus. From March 1, 1994 to March 1, 1996,
Federated Administrative Services served as the Trust's Administrator.
Prior to March 1, 1994, Federated Administrative Services, Inc. served
as the Trust's Administrator. Both former Administrators are
subsidiaries of Federated Investors. For purposes of this Statement of
Additional Information, Federated Services Company, Federated
Administrative Services and Federated Administrative Services, Inc.
may hereinafter collectively be referred to as the "Administrators."
For the fiscal years ended March 31, 1997, 1996, and 1995, the
Administrators earned $506,849, $533,071, and $571,385, respectively.
CUSTODIAN AND PORTFOLIO ACCOUNTANT
State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Trust. Federated Services Company,
Pittsburgh, PA, provides certain accounting and recordkeeping services
with respect to the Trust's portfolio investments. The fee paid for
this service is based upon the level of the Trust's average net assets
for the period plus out-of-pocket expenses. TRANSFER AGENT
Federated Services Company, through its registered transfer agent,
Federated Shareholder Services Company, maintains all necessary
shareholder records. For its services, the transfer agent receives a
fee based on the size, type, and number of accounts and transactions
made by shareholders.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants for the Trust are Arthur Andersen
LLP, Pittsburgh, PA.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES
With respect to Class B Shares, the Trust has adopted a Distribution
Plan in accordance with Investment Company Act Rule 12b-1.
Additionally, the Trust has adopted a Shareholder Services Agreement
with respect to both Class A Shares and Class B Shares (individually
and collectively referred to as "Shares" as the context may require.)
These arrangements permit the payment of fees to financial
institutions, the distributor, and Federated Shareholder Services, to
stimulate distribution activities and to cause services to be provided
to shareholders by a representative who has knowledge of the
shareholder's particular circumstances and goals. These activities and
services may include, but are not limited to, marketing efforts;
providing office space, equipment, telephone facilities, and various
clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquires; and assisting clients in changing dividend options, account
designations, and addresses.
By adopting the Distribution Plan, (Class B Shares only) the Trustees
expect that the Trust will be able to achieve a more predictable flow
of cash for investment purposes and to meet redemptions. This will
facilitate more efficient portfolio management and assist the Trust in
pursuing its investment objectives. By identifying potential investors
whose needs are served by the Trust's objectives, and properly
servicing these accounts, it may be possible to curb sharp
fluctuations in rates of redemptions and sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2)
investing shareholder assets with a minimum of delay and
administrative detail; (3) enhancing shareholder recordkeeping
systems; and (4) responding promptly to shareholders' requests and
inquiries concerning their accounts.
For the fiscal year ended March 31, 1997, Class B Shares incurred
$59,570 in distribution service fees, none of which was waived. In
addition, for the fiscal year ended March 31, 1997, the Class A Shares
and Class B Shares paid Shareholder Services Fees in the amount of
$1,657,031 and $19,857, respectively, of which $1,325,625 and $11,120,
respectively, were waived.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the
value of portfolio instruments is amortized cost. Under this method,
portfolio instruments are valued at the acquisition cost as adjusted
for amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on Shares of the Trust computed by dividing
the annualized daily income on the Trust's portfolio by the net asset
value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market
prices and estimates. In periods of rising interest rates, the
opposite may be true. The Trust's use of the amortized cost method
of valuing portfolio instruments depends on its compliance with
certain conditions in Rule 2a-7 (the "Rule") promulgated by the
Securities and Exchange Commission under the Investment Company Act of
1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per Share, as
computed for purposes of distribution and redemption, at $1.00 per
Share, taking into account current market conditions and the Trust's
investment objective. The procedures include monitoring the
relationship between the amortized cost value per Share and the net
asset value per Share based upon available indications of market
value. The Trustees will decide what, if any, steps should be taken if
there is a difference of more than 0.5% between the two values. The
Trustees will take any steps they consider appropriate (such as
redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Trust is obligated to redeem Shares solely in cash up to $250,000
or 1% of the Trust's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further
payments should be in kind. In such cases, the Trust will pay all or a
portion of the remainder of the redemption in portfolio instruments
valued in the same way as the Trust determines net asset value. The
portfolio instruments will be selected in a manner that the Trustees
deem fair and equitable. Redemption in kind is not as liquid as a cash
redemption. If redemption is made in kind, shareholders who sell these
securities could receive less than the redemption value and could
incur certain transaction costs. ELIMINATION OF THE CONTINGENT
DEFERRED SALES CHARGE
The amounts that a shareholder may withdraw under a Systematic
Withdrawal Program that qualify for elimination of the Contingent
Deferred Sales Charge may not exceed 12% annually with reference
initially to the value of the Class B Shares upon establishment of the
Systematic Withdrawal Program and then as calculated at the annual
valuation date. Redemptions on a qualifying Systematic Withdrawal
Program can be made at a rate of 1.00% monthly, 3.00% quarterly, or
6.00% semi-annually with reference to the applicable account valuation
amount. Amounts that exceed the 12.00% annual limit for redemption, as
described, may be subject to the Contingent Deferred Sales Charge. To
the extent that a shareholder exchanges Shares for Class B Shares of
other Federated Funds, the time for which the exchanged-for Shares are
to be held will be added to the time for which exchanged-from Shares
were held for purposes of satisfying the 12 month holding requirement.
However, for purposes of meeting the $10,000 minimum account value
requirement, Class B Share accounts will not be aggregated.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally
liable as partners under Massachusetts law for obligations of the
Trust. To protect its shareholders, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of
its shareholders for acts or obligations of the Trust. These documents
require notice of this disclaimer to be given in each agreement,
obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust
to use its property to protect or compensate the shareholder. On
request, the Trust will defend any claim made and pay any judgment
against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder
will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
THE TRUST'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Trust must, among other requirements: derive
at least 90% of its gross income from dividends, interest, and gains
from the sale of securities; derive less than 30% of its gross income
from the sale of securities held less than three months; invest in
securities within certain statutory limits; and distribute to its
shareholders at least 90% of its net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial
institutions and broker/dealers charge fees in connection with
services provided in conjunction with an investment in Shares of the
Trust, the performance will be reduced for those shareholders paying
those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with
a balance of one Share at the beginning of the base period, with the
net change excluding capital changes but including the value of any
additional Shares purchased with dividends earned from the original
one Share and all dividends declared on the original and any purchased
Shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
For the seven-day period ended March 31, 1997, the yield for Class A
Shares was 4.63%, Class B Shares was 3.82%. EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to the
365/7th power; and subtracting 1 from the result.
For the seven-day period ended March 31, 1997, the effective yield for Class
A Shares was 4.74%, Class B Shares was 3.89%.
TOTAL RETURN
Average annual total return is the average compounded rate of return
for a given period that would equate a $1,000 initial investment to
the ending redeemable value of that investment. The ending redeemable
value is computed by multiplying the number of Shares owned at the end
of the period by the net asset value per Share at the end of the
period. The number of Shares owned at the end of the period is based
on the number of Shares purchased at the beginning of the period with
$1,000, adjusted over the period by any additional Shares, assuming
the monthly reinvestment of all dividends and distributions. For
the one-year, five-year and ten-year periods ended March 31, 1997, the
average annual total returns were 4.43%, 3.65%, and 5.17%,
respectively, for Class A Shares.
For the fiscal year ended March 31, 1997, and for the period from
December 17, 1994 (date of initial public investment) to March 31,
1997, the average annual total returns were (1.58%) and 2.01%,
respectively, for Class B Shares. PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a
more complete view of the Trust's performance. When comparing
performance, investors should consider all relevant factors such as
the composition of any index used, prevailing market conditions,
portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial
publications and/or indices which the Trust uses in advertising may
include:
* LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment of
all income dividends and capital gains distributions, if any.
* IBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of
money market funds weekly. Donoghue's Money Market Insight
publication reports monthly and 12-month-to-date investment results
for the same money funds.
* MONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day effective
yield.
* SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days.
Advertising and other promotional literature may include charts,
graphs and other illustrations using the Trust's returns, or returns
in general, that demonstrate basic investment concepts such as
tax-deferred compounding, dollar-cost averaging and systematic
investment. In addition, the Trust can compare its performance, or
performance for the types of securities in which it invests, to a
variety of other investments, such as bank savings accounts,
certificates of deposit, and Treasury bills.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Trust may include discussions
of economic, financial and political developments and their effect on
the securities market. Such discussions may take the form of
commentary on these developments by portfolio managers and their views
and analysis on how such developments could affect the Trust. In
addition, advertising and sales literature may quote statistics and
give general information about the mutual fund industry, including the
growth of the industry, from sources such as the Investment Company
Institute. ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is
reflected in its investment decision making -- tructured,
straightforward, and consistent. This has resulted in a history of
competitive performance with a range of competitive investment
products that have gained the confidence of thousands of clients and
their customers.
The company's disciplined security selection process is firmly rooted
in sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
These traders handle trillions of dollars in annual trading volume.
In the money market sector, Federated Investors gained prominence
in the mutual fund industry in 1974 with the creation of the first
institutional money market fund. Simultaneously, the company pioneered
the use of the amortized cost method of accounting for valuing shares
of money market funds, a principal means used by money managers today
to value money market fund shares. Other innovations include the first
institutional tax-free money market fund. As of December 31, 1996,
Federated Investors managed more than $50.3 billion in assets across
50 money market funds, including 18 government, 11 prime and 21
municipal with assets approximating $28.0 billion, $12.8 billion and
$9.5 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated
Investors' equity and high yield corporate bond management while
William D. Dawson, Executive Vice President, oversees Federated
Investors' domestic fixed income management. Henry A. Frantzen,
Executive Vice President, oversees the management of Federated
Investors' international and global portfolios.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their
financial goals through mutual funds. These investors, as well as
businesses and institutions, have entrusted over $3.5 trillion to the
more than 6,000 funds available.* Federated Investors, through
its subsidiaries, distributes mutual funds for a variety of investment
applications. Specific markets include:
INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional
clients nationwide by managing and servicing separate accounts and
mutual funds for a variety of applications, including defined benefit
and defined contribution programs, cash management, and
asset/liability management. Institutional clients include
corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and
financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
BANK MARKETING
Other institutional clients include close relationships with more than
1,600 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing
& Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage
firms nationwide -- we have over 2,200 broker/dealer and bank
broker/dealer relationships across the country -- supported by more
wholesalers than any other mutual fund distributor. Federated's
service to financial professionals and institutions has earned it high
ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement.
The marketing effort to these firms is headed by James F. Getz,
President, Federated Securities Corp.
FINANCIAL STATEMENTS
The Financial Statements for the fiscal year ended March 31, 1997 are
incorporated herein by reference to the Annual Report of the Trust
dated March 31, 1997 (File Nos. 2-65447 and 811-2956). A copy of this
report may be obtained without charge by contacting the Trust.
* Source: Investment Company Institute
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Incorporated by reference to Annual
Report of Registrant dated March 31, 1997 (File Nos. 2-65447 and
811-2956)
(b) Exhibits:
(1) (i) Conformed copy of Declaration of Trust of the Registrant; (20)
(ii-v) Conformed copies of amendments to the Declaration of Trust; (20)
(2) (i) Copy of By-Laws of the Registrant; (20)
(ii-vii) Copies of amendments to By-Laws of the Registrant; (20)
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial Interest of the
Registrant; (20)
(5) Conformed copy of Investment Advisory Contract of the Registrant; (12)
(6) (i) Conformed copy of Distributor's Contract of the Registrant; (19)
(ii) Conformed copy of Administrative Services Agreement; (19)
(iii) The Registrant hereby incorporates the conformed copy of the
specimen Mutual Funds Sales and Service Agreement; Mutual Funds
Service Agreement; and Plan Trustee/Mutual Funds Service
Agreement from Item 4(b)(6) of the Cash Trust Series II
Registration Statement on Form N-1A, filed with the
Commission on July 24, 1995. (File Nos. 33-38550 and 811-6269).
(7) Not applicable;
(8) Conformed Copy of Custodian Agreement of the Registrant; (19)
(9) (i) Conformed copy of Agreement for Fund Accounting Services,
Administrative Services,
Shareholder Recordkeeping Services and Custody Services
Procurement; (21)
(ii) Conformed copy of Shareholder Services
Agreement; (19)
(iii) The responses described in Item 24(b) are hereby incorporated by
reference.
(10) Not applicable;
(11) Conformed copy of Consent of Independent Public Accountants; +
+ All exhibits have been filed electronically.
12. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 21 on Form N-1A filed July 28, 1989
(File Nos. 2-65447 and 811-2956).
19. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 34 on Form N-1A filed May
26, 1995 (File Nos. 2-65447 and 811-2956).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 35 on Form N-1A filed April 25, 1996
(File Nos. 2-65447 and 811-2956).
21. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 37 on Form N-1A filed May
24, 1996 (File Nos. 2-65447 and 811-2956).
<PAGE>
(12) Not applicable;
(13) Not applicable;
(14) Copy of IRA Plan of the Registrant; (19)
(15) (i) Conformed copy of Distribution Plan of the Registrant ; (21)
(ii) Copy of Sales Agreement of the
Registrant; (20)
(iii) Form of Rule 12b-1 Agreement of
the Registrant; (18) (iv) The
responses described in Item 24(b) are
hereby incorporated by
reference.
(16) Copy of Schedule for Computation of Yield
Calculation ; (20)
(17) Copy of Financial Data Schedules; +
(18) The Registrant hereby incorporates the conformed copy of the
specimen Multiple Class Plan from Item 249b)(18) of the World
Investment Series, Inc. Registration Statement on Form N-1A,
filed with the Commission on January 26, 1996.
(File Nos. 33-52149 and 811-07141).
(19) Conformed copy of Power of Attorney; +
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of May 8, 1997
- -------------- --------------------
Shares of Beneficial Interest
(no par value)
Class A Shares 107,083
Class B Shares 1,167
Item 27. Indemnification: (14)
+ All exhibits have been filed electronically.
14. Response in incorporated by reference to Registrant's
Post-Effective Amendment No. 25 on Form N-1A filed July 19, 1991
(File Nos. 2-65447 and 811-2956).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed October 18, 1994
(File Nos. 2-65447 and 811-2956).
19. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 34 on Form N-1A filed May 26, 1995
(File Nos. 2-65447 and 811-2956).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 35 on Form N-1A filed April 25, 1996
(File Nos. 2-65447 and 811-2956).
21. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 37 on Form N-1A filed May 24, 1996
(File Nos. 2-65447 and 811-2956).
<PAGE>
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the
investment adviser, see the section entitled "Trust
Information - Management of the Trust" in Part A.
The affiliations with the Registrant of three of the
Trustees and two of the officers of the investment
adviser are included in Part B of this Registration
Statement under "Management of the Trust." The
remaining Trustee of the investment adviser, his
position with the investment adviser, and, in
parentheses, his principal occupation is: Mark D.
Olson, Partner, Wilson, Halbrook & Bayard, 107 W.
Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are: William D.
Dawson, III, Henry A. Frantzen and J. Thomas Madden, Executive Vice
Presidents; Peter R. Anderson, Drew J. Collins, Jonathan C. Conley,
Deborah A. Cunningham, Mark Durbiano, J. Alan Minteer and Mary Jo
Ochson, Senior Vice Presidents; J. Scott Albrecht, Joseph M.
Balestrino, Randall A. Bauer, David F. Belton, Christine A. Bosio,
David A. Briggs, Kenneth J. Cody, Alexandre de Bethmann, Michael J.
Donnelly, Michael P. Donnelly, Linda A. Duessel, Kathleen Foody-Malus,
Thomas M. Franks, Edward C. Gonzales, James E. Grefenstette, Susan R.
Hill, Stephen A. Keen, Robert M. Kowit, Jeff A. Kozemchek, Marian R.
Marinack, Sandra L. McInerney, Susan M. Nason, Robert J. Ostrowski,
Charles A. Ritter, Scott B. Schermerhorn, Frank Semack, Aash M. Shah,
William F. Stotz, Tracy P. Stouffer, Edward J. Tiedge, Paige M.
Wilhelm and Jolanta M. Wysocka, Vice Presidents; Thomas R. Donahue,
Treasurer, and Stephen A. Keen, Secretary. The business address of
each of the Officers of the investment adviser is Federated Investors
Tower, Pittsburgh, PA 15222-3779. These individuals are also officers
of a majority of the investment advisers to the Funds listed in Part B
of this Registration Statement.
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor
for shares of the Registrant, also acts as
principal underwriter for the following
open-end investment companies: 111 Corcoran
Funds; Arrow Funds; Automated Government
Money Trust; BayFunds; Blanchard Funds;
Blanchard Precious Metals Fund, Inc.; Cash
Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated Adjustable
Rate U.S. Government Fund, Inc.; Federated
American Leaders Fund, Inc.; Federated ARMs
Fund; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for
U.S. Government Securities, Inc.; Federated
GNMA Trust; Federated Government Income
Securities, Inc.; Federated Government Trust;
Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust;
Federated Index Trust; Federated
Institutional Trust; Federated Insurance
Series; Federated Investment Portfolios;
Federated Investment Trust; Federated Master
Trust; Federated Municipal Opportunities
Fund, Inc.; Federated Municipal Securities
Fund, Inc.; Federated Municipal Trust;
Federated Short-Term Municipal Trust;
Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund:
1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S.
Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority
Funds; Fixed Income Securities, Inc.; High
Yield Cash Trust; Independence One Mutual
Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series
Funds, Inc.; Investment Series Trust; Liberty
U.S. Government Money Market Trust; Liquid
Cash Trust; Managed Series Trust; Marshall
Funds, Inc.; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market
Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint
Funds; Peachtree Funds; RIMCO Monument Funds;
SouthTrust Vulcan Funds; Star Funds; Targeted
Duration Trust; Tax-Free Instruments Trust;
The Biltmore Funds; The Biltmore Municipal
Funds; The Monitor Funds; The Planters Funds;
The Starburst Funds; The Starburst Funds II;
The Virtus Funds; Tower Mutual Funds; Trust
for Financial Institutions; Trust for
Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust
for U.S. Treasury Obligations; Vision Group
of Funds, Inc.; Wesmark Funds; and World
Investment Series, Inc.
Federated Securities Corp. also acts as principal
underwriter for the following closed-end investment
company: Liberty Term Trust, Inc.- 1999.
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
<S> <C> <C>
Richard B. Fisher Director, Chairman, Chief Vice President Federated Investors
Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
Thomas R. Donahue Director, Assistant --
Federated Investors Tower Secretary, Assistant
Pittsburgh, PA 15222-3779 Treasurer, Federated
Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dale R. Browne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joeseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
George D. Riedel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard Suder Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward J. Wojnnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Matthew S. Propelka Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
</TABLE>
(c) Not applicable
<PAGE>
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:
Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Shareholder Federated Investors Tower
Services Company Pittsburgh, Pennsylvania 15222-3779
("Transfer Agent and Dividend
Disbursing Agent")
Federated Services Company Federated Investors Tower
("Adminstrator") Pittsburgh, PA 15222-3779
Federated Advisers Federated Investors Tower
("Adviser") Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the
provisions of Section 16(c) of the 1940 Act with
respect to the removal of Trustees and the calling
of special shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person
to whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders,
upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant, LIBERTY U.S.
GOVERNMENT MONEY MARKET TRUST, certifies that it meets all of the
requirements for effectiveness of this Amendment to its Registration
Statement pursuant to Rule 12(b) under the Securities Act of 1933 and
has duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized, in
the City of Pittsburgh and Commonwealth of Pennsylvania, on the 28th
day of May, 1997.
LIBERTY U.S. GOVERMENT MONEY MARKET TRUST
BY: /s/Matthew S. Hardin
Matthew S. Hardin, Assistant Secretary
Attorney in Fact for John F. Donahue
May 28, 1997
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/Matthew S. Hardin
Matthew S. Hardin Attorney In Fact May 28, 1997
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
J. Christopher Donahue* President
John W. McGonigle* Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
Edward C. Gonzales Executive Vice President
and Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 11 under Form N-1A
Exhibit 23 under 601/Reg. S-K
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in
Post-Effective Amendment No. 39 to Form N-1A Registration Statement of
Liberty U.S. Government Money Market Trust of our report dated April
24, 1997, on the financial statements as of March 31, 1997, included
in or made part of this registration statement.
/S/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
May 27, 1997
Exhibit 19 under Form N1-A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes
and appoints the Secretary and Assistant Secretary of LIBERTY U.S.
GOVERNMENT MONEY MARKET TRUST and the Deputy General Counsel of
Federated Services Company, and each of them, their true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution for them and in their names, place and stead, in any
and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of
1933, the Securities Exchange Act of 1934 and the Investment Company
Act of 1940, by means of the Securities and Exchange Commission's
electronic disclosure system known as EDGAR; and to file the same,
with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to sign and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all
intents and purposes as each of them might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/John F. Donahue Chairman and Trustee May 1, 1997
- -------------------------------------------------
John F. Donahue (Chief Executive Officer)
/s/J. Christopher Donahue President May 1, 1997
J. Christopher Donahue
/s/John W. McGonigle Treasurer, Executive May 1, 1997
- -------------------------------------------------
John W. McGonigle Vice President and
Secretary (Principal
Financial and Accounting
Officer)
/s/Thomas G. Bigley Trustee May 1, 1997
Thomas G. Bigley
/s/John T. Conroy, Jr. Trustee May 1, 1997
- -------------------------------------------------
John T. Conroy, Jr.
<PAGE>
SIGNATURES TITLE DATE
/s/Edward C. Gonzales Trustee May 1, 1997
Edward C. Gonzales
/s/William J. Copeland Trustee May 1, 1997
William J. Copeland
/s/James E. Dowd Trustee May 1, 1997
James E. Dowd
/s/Lawrence D. Ellis, M.D. Trustee May 1, 1997
- -------------------------------------------------
Lawrence D. Ellis, M.D.
/s/Edward L. Flaherty, Jr. Trustee May 1, 1997
- -------------------------------------------------
Edward L. Flaherty, Jr.
/s/Peter E. Madden Trustee May 1, 1997
Peter E. Madden
/s/Gregor F. Meyer Trustee May 1, 1997
Gregor F. Meyer
/s/John E. Murray, Jr. Trustee May 1, 1997
- -------------------------------------------------
John E. Murray, Jr.
/s/Wesley W. Posvar Trustee May 1, 1997
Wesley W. Posvar
/s/Marjorie P. Smuts Trustee May 1, 1997
Marjorie P. Smuts
</TABLE>
Sworn to and subscribed before me this 1st day of May, 1997
/s/Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Oct. 9, 2000
Member, Pennsylvania Association of Notaries
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> Liberty U.S. Government Money Market Trust
Class A
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Mar-31-1997
<PERIOD-END> Mar-31-1997
<INVESTMENTS-AT-COST> 680,645,062
<INVESTMENTS-AT-VALUE> 680,645,062
<RECEIVABLES> 6,740,477
<ASSETS-OTHER> 2,184,162
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 689,569,701
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,501,585
<TOTAL-LIABILITIES> 2,501,585
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 687,068,116
<SHARES-COMMON-STOCK> 658,730,775
<SHARES-COMMON-PRIOR> 697,472,048
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 658,730,775
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 36,192,470
<OTHER-INCOME> 0
<EXPENSES-NET> 7,183,045
<NET-INVESTMENT-INCOME> 29,009,425
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 29,009,425
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 28,724,728
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 503,677,965
<NUMBER-OF-SHARES-REDEEMED> 570,643,721
<SHARES-REINVESTED> 28,224,483
<NET-CHANGE-IN-ASSETS> (19,862,839)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,311,087
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,140,160
<AVERAGE-NET-ASSETS> 670,755,182
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.040
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.040
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> Liberty U.S. Government Money Market Trust
Class B
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Mar-31-1997
<PERIOD-END> Mar-31-1997
<INVESTMENTS-AT-COST> 680,645,062
<INVESTMENTS-AT-VALUE> 680,645,062
<RECEIVABLES> 6,740,477
<ASSETS-OTHER> 2,184,162
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 689,569,701
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,501,585
<TOTAL-LIABILITIES> 2,501,585
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 687,068,116
<SHARES-COMMON-STOCK> 28,337,341
<SHARES-COMMON-PRIOR> 9,458,907
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 28,337,341
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 36,192,470
<OTHER-INCOME> 0
<EXPENSES-NET> 7,183,045
<NET-INVESTMENT-INCOME> 29,009,425
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 29,009,425
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 284,697
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,167,535
<NUMBER-OF-SHARES-REDEEMED> 20,535,528
<SHARES-REINVESTED> 246,427
<NET-CHANGE-IN-ASSETS> (19,862,839)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,311,087
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,140,160
<AVERAGE-NET-ASSETS> 670,755,182
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.040
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.040
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
