TRUST FOR U.S. TREASURY OBLIGATIONS
PROSPECTUS
The shares of Trust for U.S. Treasury Obligations (the "Trust") offered by this
prospectus represent interests in an open-end, diversified management investment
company (a mutual fund) investing in short-term U.S. Treasury securities to
achieve stability of principal and current income.
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,
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 November
30, 1994, with the Securities and Exchange Commission. 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 free of charge by calling 1-800-235-4669. To obtain other
information, or make inquiries about the Trust, contact the Trust at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated November 30, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF TRUST EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 4
Regulatory Compliance 4
TRUST INFORMATION 4
- ------------------------------------------------------
Management of the Trust 4
Distribution of Shares 5
Administration of the Trust 6
NET ASSET VALUE 6
- ------------------------------------------------------
INVESTING IN THE TRUST 7
- ------------------------------------------------------
Share Purchases 7
Minimum Investment Required 7
Subaccounting Services 7
Certificates and Confirmations 8
Dividends 8
Capital Gains 8
REDEEMING SHARES 8
- ------------------------------------------------------
By Mail 8
Telephone Redemption 9
Accounts with Low Balances 9
SHAREHOLDER INFORMATION 10
- ------------------------------------------------------
Voting Rights 10
Massachusetts Partnership Law 10
TAX INFORMATION 10
- ------------------------------------------------------
Federal Income Tax 10
PERFORMANCE INFORMATION 11
- ------------------------------------------------------
FINANCIAL STATEMENTS 12
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 19
- ------------------------------------------------------
ADDRESSES 20
- ------------------------------------------------------
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)........................................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)........................................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)...................... None
Redemption Fees (as a percentage of amount redeemed, if applicable).......... None
Exchange Fee................................................................. None
ANNUAL TRUST OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)............................................. 0.30%
12b-1 Fee.................................................................... None
Total Other Expenses......................................................... 0.15%
Shareholder Services Fee(2)............................................. 0.05%
Total Trust Operating Expenses(3).................................. 0.45%
</TABLE>
(1) The management fee has been reduced to reflect the waiver of a portion of
the management fee. The maximum management fee is 0.40%.
(2) The maximum Shareholder Services Fee is 0.25%.
(3) The Total Trust Operating Expenses in the table above are based on expenses
expected during the fiscal year ending September 30, 1995. The Total Trust
Operating Expenses were 0.45% for the fiscal year ended September 30, 1994 and
were 0.52% absent the waiver of a portion of the management fee.
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 "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 invest-
ment,assuming (1) 5% annual return and (2) redemption
at the end of each time period........................... $5 $ 14 $ 25 $ 57
</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.
TRUST FOR U.S. TREASURY OBLIGATIONS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 19.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
- ---------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
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 0.03 0.03 0.04 0.06 0.08 0.09 0.07 0.06 0.07 0.08
- ---------- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
LESS
DISTRIBUTIONS
- ----------
Dividends to
shareholders
from net
investment
income (0.03) (0.03) (0.04) (0.06) (0.08) (0.09) (0.07) (0.06) (0.07) (0.08)
- ---------- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
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* 3.31% 2.84% 4.00% 6.49% 8.18% 8.89% 6.83% 5.89% 6.89% 8.57%
- ----------
RATIOS TO
AVERAGE
NET ASSETS
- ----------
Expenses 0.45% 0.45% 0.45% 0.46% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45%
- ----------
Net
investment
income 3.21% 2.80% 3.95% 6.33% 7.89% 8.56% 6.61% 5.74% 6.63% 8.22%
- ----------
SUPPLEMENTAL
DATA
- ----------
Net assets,
end of
period (000
omitted) $4,651,657 $4,689,657 $5,271,259 $5,744,351 $5,997,327 $5,747,794 $4,766,221 $4,846,175 $4,780,610 $3,237,598
- ----------
</TABLE>
* Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated July 24, 1979. The Trust is designed for institutional investors,
such as banks, fiduciaries, custodians of public funds, and smaller
institutional investors such as corporations, unions, hospitals, insurance
companies, and municipalities as a convenient means of accumulating an interest
in a professionally managed, diversified portfolio investing only in short-term
U.S. Treasury securities. A minimum initial investment of $25,000 over a 90-day
period is required.
The Trust attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
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 following
the investment policies described in this prospectus. Unless indicated
otherwise, these policies also cannot be changed without shareholder approval.
INVESTMENT POLICIES
The Trust pursues its investment objective by investing only in a portfolio of
U.S. Treasury securities maturing in one year or less. The average maturity of
the U.S. Treasury obligations in the Trust's portfolio, computed on a dollar
weighted basis, will be 120 days or less. As a matter of operating policy which
can be changed without shareholder approval, the Trust will limit the average
maturity of the securities in its portfolio to 90 days or less. The Trust may
attempt to increase yield by trading portfolio securities to take advantage of
short-term market variations.
ACCEPTABLE INVESTMENTS. The Trust invests only in U.S. Treasury securities,
which are fully guaranteed as to principal and interest by the United States
Treasury. These securities include: (i) U.S. Treasury bills, notes and bonds,
and (ii) instruments of the Export/Import Bank of the U.S., the General Services
Administrations, the Small Business Administration, and the Washington
Metropolitan Area Transit Authority.
REPURCHASE AGREEMENTS. Certain securities in which the Trust invests may be
purchased pursuant to repurchase agreements which provide for repurchase by the
seller within one year from the date of acquisition. Repurchase agreements are
arrangements in which banks, brokers/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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase U.S.
Treasury 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. Accordingly, the Trust may pay more
or less than the market value of the securities on the settlement date.
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 limitation cannot be changed without shareholder approval.
The following limitation, however, can 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 to illiquid
securities, including repurchase agreements providing for settlement in more
than seven days after notice.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its 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, as amended. 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.
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
Research, 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 received an annual investment advisory fee
equal to .40 of 1% of the Trust's average daily net assets. The adviser has
undertaken to reimburse the Trust up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
In addition, under the investment advisory contract, the adviser will waive
the amount, limited to the amount of the advisory fee, by which the Trust
aggregate annual operating expenses, including the investment advisory fee
but excluding interest, taxes, brokerage commissions, expenses of
registering and qualifying the Trust and its shares under federal and state
laws and regulations, expenses of withholding taxes, and extraordinary
expense's exceed .45 of 1% of its average daily net assets.
ADVISER'S BACKGROUND. Federated Research, 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 Research 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. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
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.
SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan
(the "Services Plan") under which it will pay Federated Shareholder Services, an
affiliate of Federated Investors, an amount not exceeding .25 of 1% of the
average daily net asset value of the Trust to provide personal services and/or
maintenance of shareholder accounts to the Trust and its shareholders. From time
to time and for such periods as deemed appropriate, the amount stated above may
be reduced voluntarily.
Federated Shareholder Services may elect to pay Financial Institutions fees
based upon shares owned by their clients or customers for services provided to
those 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 Federated
Shareholder Services.
ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and accounting services) necessary to operate the Trust. Federated
Administrative Services provides these at an annual rate as specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY
MAXIMUM FEE NET ASSETS
- ------------- ------------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
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. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA is custodian for the
securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, PA is transfer agent for the shares of, and dividend disbursing
agent for, the Trust.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, PA and Dickstein, Shapiro & Morin, L.L.P., Washington, D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the
Trust are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust attempts to stabilize the net asset value of its shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per share is determined by subtracting total 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., and 4:00 p.m.
(Eastern time) Monday through Friday except on: (i) days on which there are not
sufficient changes in the value of the Trust's portfolio securities that its net
asset value might be materially affected; (ii) days during which no shares are
tendered for redemption and no orders to purchase shares are received; or (iii)
the following holidays: New Year's Day, Martin Luther King Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
INVESTING IN THE TRUST
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Trust reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call 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) that
day. Federal funds should be wired as follows: State Street Bank and Trust
Company, Boston, MA; Attention: EDGEWIRE; For Credit to: Trust for U.S. Treasury
Obligations; 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.
BY MAIL. To purchase by mail, send a check made payable to Trust for U.S.
Treasury Obligations to: Federated Services Company, P.O. Box 8604, Boston, MA
02266-8604. Orders by mail are considered received when payment by check is
converted into federal funds. This is normally the next business day after the
check is received.
AUTOMATIC INVESTMENTS. Investors may establish accounts with their financial
institutions to have cash accumulations automatically invested in the Trust. The
investments may be made on predetermined dates or when the investor's account
reaches a certain level. Participating financial institutions are responsible
for prompt transmission of orders relating to the program, and they may charge
for their services. Investors should read this prospectus along with the
financial institution's agreement or literature describing these services and
fees.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. However, an account may be opened
with a smaller amount as long as the minimum is reached within 90 days. Minimum
investments will be calculated by combining all accounts maintained with the
Trust. Financial institutions may impose different minimum investment
requirements on their customers.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Trust shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Trust or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
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.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
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.
BY MAIL
Shares may be redeemed by sending a written request to: Trust for U.S. Treasury
Obligations, P.O. Box 8604, Boston, MA 02266-8604. The written request should
state: Trust for U.S. Treasury Obligations; shareholder's name; the account
number; and the share or dollar amount requested. Sign the request exactly as
the shares are registered. Shareholders should call the Trust for assistance in
redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, 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 trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; 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.
The Trust and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Trust and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Trust. 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. An
authorization form permitting the Trust to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time), the
proceeds 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, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 3:00
p.m. (Eastern time). However, the proceeds are not wired until 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).
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Trust shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 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.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. As a Massachusetts business
trust, 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 of the Trust shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the Trust's outstanding shares.
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.
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.
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
- the Trust is not subject to Pennsylvania corporate or personal property
taxes; and
- 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.
OTHER STATE AND LOCAL TAXES. 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 and effective yield.
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.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the Trust 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 its
performance to certain indices.
TRUST FOR U.S. TREASURY OBLIGATIONS
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ -------------------------------------------------------------- --------------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--14.1%
- ---------------------------------------------------------------------------------
$201,000,000 * U.S. Treasury Bills, 3.60%-5.42%, 2/9/95-9/21/95 $ 194,799,995
--------------------------------------------------------------
459,800,000 U.S. Treasury Notes, 3.875%-11.625%, 10/15/94-5/15/95 461,830,038
-------------------------------------------------------------- --------------
TOTAL SHORT-TERM U.S. GOVERNMENT OBLIGATIONS 656,630,033
-------------------------------------------------------------- --------------
**REPURCHASE AGREEMENTS--85.8%
- ---------------------------------------------------------------------------------
85,000,000 BOT Securities, 4.80%, dated 9/30/94, due 10/3/94 85,000,000
--------------------------------------------------------------
355,000,000 BT Securities Corp., 5.00%, dated 9/30/94, due 10/3/94 355,000,000
--------------------------------------------------------------
61,400,000 BZW Securities, Inc., 4.85%, dated 9/30/94, due 10/3/94 61,400,000
--------------------------------------------------------------
100,000,000 Chemical Securities, Inc., 4.80%, dated 9/30/94, due 10/3/94 100,000,000
--------------------------------------------------------------
180,000,000 Daiwa Securities America, Inc., 4.80%, dated 9/30/94, due
10/3/94 180,000,000
--------------------------------------------------------------
125,000,000 Deutsche Bank Government Securities, Inc., 4.90%, dated
9/30/94, due 10/3/94 125,000,000
--------------------------------------------------------------
140,000,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.80%, dated
9/30/94, due 10/3/94 140,000,000
--------------------------------------------------------------
85,000,000 First Chicago Capital Markets, 4.95%, dated 9/30/94, due
10/3/94 85,000,000
--------------------------------------------------------------
600,000,000 Goldman, Sachs & Co., 4.85%, dated 9/30/94, due 10/3/94 600,000,000
--------------------------------------------------------------
100,000,000 Harris, Nesbitt, Thomson Securities, Inc., 4.85%, dated
9/30/94, due 10/3/94 100,000,000
--------------------------------------------------------------
75,000,000 Harris, Nesbitt, Thomson Securities, Inc., 4.90%, dated
9/30/94, due 10/3/94 75,000,000
--------------------------------------------------------------
400,000,000 Kidder, Peabody & Co., Inc., 4.80%, dated 9/30/94, due 10/3/94 400,000,000
--------------------------------------------------------------
83,633,000 J.P. Morgan Securities, Inc., 4.90%, dated 9/30/94, due
10/3/94 83,633,000
--------------------------------------------------------------
50,000,000 J.P. Morgan Securities, Inc., 4.95%, dated 9/30/94, due
10/3/94 50,000,000
--------------------------------------------------------------
175,000,000 Lehman Government Securities, Inc., 4.85%, dated 9/30/94,
due 10/3/94 175,000,000
--------------------------------------------------------------
175,000,000 Morgan Stanley & Co., Inc., 4.80%, dated 9/30/94, due 10/3/94 175,000,000
--------------------------------------------------------------
175,000,000 NationsBank of North Carolina, 5.04%, dated 9/30/94, due
10/3/94 175,000,000
--------------------------------------------------------------
</TABLE>
TRUST FOR U.S. TREASURY OBLIGATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ -------------------------------------------------------------- --------------
<C> <C> <S> <C>
**REPURCHASE AGREEMENTS--CONTINUED
- ---------------------------------------------------------------------------------
$175,000,000 Nikko Securities Co. International Inc., 4.85%, dated 9/30/94,
due 10/3/94 $ 175,000,000
--------------------------------------------------------------
50,000,000 Nikko Securities Co. International Inc., 4.90%, dated 9/30/94,
due 10/3/94 50,000,000
--------------------------------------------------------------
30,000,000 Nikko Securities Co. International Inc., 5.00%, dated 9/30/94,
due 10/3/94 30,000,000
--------------------------------------------------------------
85,000,000 Nomura Securities International, Inc., 4.80%, dated 9/30/94,
due 10/3/94 85,000,000
--------------------------------------------------------------
45,000,000 Sanwa-BGK Securities, Co., 4.90%, dated 9/30/94, due 10/3/94 45,000,000
--------------------------------------------------------------
125,000,000 State Street Bank and Trust Co., 4.95%, dated 9/30/94, due
10/3/94 125,000,000
--------------------------------------------------------------
159,950,000 UBS Securities, Inc., 5.00%, dated 9/30/94, due 10/3/94 159,950,000
--------------------------------------------------------------
68,000,000 *** First Boston Corp., 4.75%, dated 9/2/94, due 10/3/94 68,000,000
--------------------------------------------------------------
76,000,000 *** Merrill Lynch Government Securities, Inc., 4.75%, dated
9/7/94, due 10/11/94 76,000,000
--------------------------------------------------------------
66,000,000 *** Goldman, Sachs & Co., 4.58%, dated 7/20/94, due 10/18/94 66,000,000
--------------------------------------------------------------
65,000,000 *** Morgan Stanley & Co., Inc., 4.77%, dated 9/29/94, due 10/19/94 65,000,000
--------------------------------------------------------------
82,000,000 *** Merrill Lynch Government Securities, Inc., 4.83%, dated
9/14/94, due 11/14/94 82,000,000
-------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 3,991,983,000
-------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST $4,648,613,033+
-------------------------------------------------------------- --------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase.
** Repurchase agreements are fully collateralized by U.S. Treasury obligations,
based on market prices at the date of the portfolio. The investments in the
repurchase agreements are through participation in joint accounts with other
Federated funds.
*** Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit the termination of the repurchase
agreement.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($4,651,657,195) at September 30, 1994.
(See Notes which are an integral part of the Financial Statements)
TRUST FOR U.S. TREASURY OBLIGATIONS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Investments in repurchase agreements $3,991,983,000
- --------------------------------------------------------------
Investments in other securities 656,630,033
- -------------------------------------------------------------- --------------
Total investments, at amortized cost and value $4,648,613,033
- -------------------------------------------------------------------------------
Receivable for Trust shares sold 1,000,233,950
- -------------------------------------------------------------------------------
Receivable for investments sold 1,985,782
- -------------------------------------------------------------------------------
Interest receivable 12,161,713
- ------------------------------------------------------------------------------- --------------
Total assets 5,662,994,478
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Payable for Trust shares redeemed 1,944,019
- --------------------------------------------------------------
Payable to bank 998,046,718
- --------------------------------------------------------------
Dividends payable 11,078,486
- --------------------------------------------------------------
Accrued expenses 268,060
- -------------------------------------------------------------- --------------
Total liabilities 1,011,337,283
- ------------------------------------------------------------------------------- --------------
NET ASSETS for 4,651,657,195 shares of beneficial interest outstanding $4,651,657,195
- ------------------------------------------------------------------------------- --------------
NET ASSETS VALUE, Offering Price, and Redemption Proceeds Per Share:
($4,651,657,195 / 4,651,657,195 shares of beneficial interest outstanding) $1.00
- ------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TRUST FOR U.S. TREASURY OBLIGATIONS
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------
Interest income $151,042,260
- --------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------
Investment advisory fee $16,481,623
- ------------------------------------------------------------------
Trustees' fees 29,051
- ------------------------------------------------------------------
Administrative personnel and services fees 2,463,878
- ------------------------------------------------------------------
Custodian fees 629,512
- ------------------------------------------------------------------
Portfolio accounting fees 30,000
- ------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 136,461
- ------------------------------------------------------------------
Shareholder services fees 1,156,023
- ------------------------------------------------------------------
Trust share registration costs 22,734
- ------------------------------------------------------------------
Auditing fees 18,945
- ------------------------------------------------------------------
Legal fees 484,747
- ------------------------------------------------------------------
Printing and postage 11,949
- ------------------------------------------------------------------
Insurance premiums 77,190
- ------------------------------------------------------------------
Taxes 49,070
- ------------------------------------------------------------------
Miscellaneous 46,486
- ------------------------------------------------------------------ -----------
Total expenses 21,637,669
- ------------------------------------------------------------------
DEDUCT--Waiver of investment advisory fee 3,025,000
- ------------------------------------------------------------------ -----------
Net expenses 18,612,669
- -------------------------------------------------------------------------------- ------------
Net investment income $132,429,591
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TRUST FOR U.S. TREASURY OBLIGATIONS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------
1994 1993
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------
Net investment income $ 132,429,591 $ 135,311,781
- ---------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------
Dividends to shareholders from net investment income (132,429,591) (135,311,781)
- ---------------------------------------------------------- ---------------- ----------------
TRUST SHARE (PRINCIPAL) TRANSACTIONS--
- ----------------------------------------------------------
Proceeds from sale of shares 19,677,804,709 21,734,680,959
- ----------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of dividends declared 16,319,252 16,577,158
- ----------------------------------------------------------
Cost of shares redeemed (19,732,124,005) (22,332,859,766)
- ---------------------------------------------------------- ---------------- ----------------
Change in net assets from Trust share transactions (38,000,044) (581,601,649)
- ---------------------------------------------------------- ---------------- ----------------
Change in net assets (38,000,044) (581,601,649)
- ----------------------------------------------------------
NET ASSETS--
- ----------------------------------------------------------
Beginning of period 4,689,657,239 5,271,258,888
- ---------------------------------------------------------- ---------------- ----------------
End of period $ 4,651,657,195 $ 4,689,657,239
- ---------------------------------------------------------- ---------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TRUST FOR U.S. TREASURY OBLIGATIONS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Trust for U.S. Treasury Obligations (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end, no load, management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to value its
portfolio securities is in accordance with Rule 2a-7 under the Act.
B. REPURCHASE AGREEMENTS--It is the policy of the Trust to require the custodian bank to
take possession, to have legally segregated in the Federal Reserve Book Entry System, or
to have segregated within the custodian bank's vault, all securities held as collateral
in support of repurchase agreement investments. Additionally, procedures have been
established by the Trust to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure that the value of collateral at
least equals the principal amount of the repurchase agreement, including accrued
interest.
The Trust will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Trust's adviser
to be creditworthy pursuant to the guidelines established by the Board of Trustees (the
"Trustees").
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
D. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of the Code
applicable to regulated investment companies and to distribute to shareholders each year
substantially all of its taxable income. Accordingly, no provisions for federal tax are
necessary.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in when-issued or
delayed delivery transactions. The Trust records when-issued securities on the trade date
and maintains security positions such that sufficient liquid assets will be available to
make payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on the
settlement date.
F. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
TRUST FOR U.S. TREASURY OBLIGATIONS
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At
September 30, 1994, capital paid-in aggregated $4,651,657,195. Transactions in
Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------
1994 1993
- ---------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares sold 19,677,804,709 21,734,680,959
- ----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 16,319,252 16,577,158
- ----------------------------------------------------------------
Shares redeemed (19,732,124,005) (22,332,859,766)
- ---------------------------------------------------------------- --------------- ---------------
Net change resulting from share transactions (38,000,044) (581,601,649)
- ---------------------------------------------------------------- --------------- ---------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Research, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40 of 1% of the Trust's average daily net assets. The Adviser will waive, to
the extent of its advisory fee, the amount, if any, by which the Trust's
aggregate annual operating expenses (excluding interest, taxes, brokerage
commissions, expenses of registering and qualifying the Trust and its shares
under federal and state laws, expenses of withholding taxes, and extraordinary
expenses) exceeded .45 of 1% of average daily net assets of the Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with administrative personnel and services. Prior to March 1, 1994, these
services were provided at approximate cost. Effective March 1, 1994, the FAS fee
is based on the level of average aggregate daily net assets of all funds advised
by subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Service Agreement
with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to 0.25
of 1% of average net assets of the Trust for the period. This fee is to obtain
certain personal services for shareholders and to maintain the shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT AND ACCOUNTING FEES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Trust. The FServ fee is based on the size, type, and number of accounts and
transactions made by shareholders.
FServ also maintains the Trust's accounting records. The fee is based on the
level of the Trust's average net assets for the period plus out-of-pocket
expenses.
Certain Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
TRUST FOR U.S. TREASURY OBLIGATIONS:
We have audited the accompanying statement of assets and liabilities of Trust
for U.S. Treasury Obligations (a Massachusetts business trust), including the
schedule of portfolio investments, as of September 30, 1994, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights (see page 2 of the prospectus) for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Trust
for U.S. Treasury Obligations as of September 30, 1994, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
November 8, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Trust for U.S. Treasury Obligations Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -----------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -----------------------------------------------------------------------------------------------
Investment Adviser
Federated Research Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -----------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8604
Trust Company Boston, Massachusetts 02266-8604
- -----------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company c/o State Street Bank and Trust Company
Boston, Massachusetts 02266-8602
- -----------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- -----------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- -----------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- -----------------------------------------------------------------------------------------------
</TABLE>
TRUST FOR U.S. TREASURY
OBLIGATIONS
PROSPECTUS
An Open-End
Management Investment Company
Prospectus dated November 30, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
898334107
8110114A (11/94)
