- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
FOR
- --------------------------------------------------------------------------------
U.S.
- --------------------------------------------------------------------------------
TREASURY
- --------------------------------------------------------------------------------
OBLIGATIONS
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
MARCH 31, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
--------------------------------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
-------------------------------------------------------------------------
[LOGO]
RECYCLED
PAPER
898334107
8042508 (5/95)
- ---------------------------------------------------
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Trust for U.S.
Treasury Obligations (the "Trust"), for the six-month period ended March 31,
1995. The report begins with the portfolio manager's Investment Review and
follows with the Portfolio of Investments and Financial Statements.
The Trust delivers a high-quality investment approach to daily income along with
the additional advantages of daily liquidity and stability of principal* -- all
through a portfolio of short-term U.S. Treasury obligations. During the
reporting period, the portfolio consisted primarily of repurchase agreements
backed by U.S. Treasury obligations due to the potential yield advantage of
these securities.
At the end of the period, the Trust's net assets stood at $3.1 billion.
Dividends paid to shareholders during the period totaled $88 million, or $0.03
per share.
Thank you for your participation in the Trust. We welcome your comments and
suggestions.
Sincerely,
Glen R. Johnson
President
May 15, 1995
* NO MONEY MARKET MUTUAL FUND CAN GUARANTEE A STABLE $1 SHARE PRICE. INVESTMENTS
IN THE TRUST ARE NOT FEDERALLY INSURED OR GUARANTEED.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Trust for U.S. Treasury Obligations (the "Trust"), which is rated AAAm by
Standard & Poor's Ratings Group and Aaa by Moody's Investors Service, Inc.*, is
invested in direct obligations of the U.S. Treasury, either in the form of notes
and bills or as collateral for repurchase agreements. Recently, the Trust has
been managed with an average maturity range of 30-40 days.
The Federal Reserve Board (the "Fed") continued to tighten monetary policy over
the semi-annual reporting period, raising the Fed funds target rate 125 basis
points from 4.75% to 5.5% in November 1994 and then to 6.00% in early February
1995. The rate on the three-month Treasury bill followed the Fed upwards, rising
from 4.8% at the beginning of the period to 6.1% in early February, then
declined moderately through the end of the reporting period to end at 5.9% on
March 31, 1995. The seven-day yield for the Trust rose over the period from
4.29% to 5.69%.** The rate on the 1-year Treasury bill, however, rose from 5.9%
to 7.3% in December, but then declined rather notably to 6.5% on March 31.
The Trust's average maturity remained in the 30-40 day target range that it
adopted with the onset of the firming in rates by the Fed in February 1994. A
year after it began, however, it appears that the Fed may be nearing the end of
its tightening process, having raised the Fed funds rate by 300 basis points.
Amid signs of a slowing in economic growth and indications that inflation is
under control, there is some feeling that the Fed has orchestrated a "soft
landing" for the economy, which has resulted in a significant flattening in the
short government yield curve in recent months. Expectations are that Fed policy
will remain on hold in the near term, as the Fed scrutinizes upcoming economic
and inflation releases. As a result, the average maturity of the Trust moved
from the lower end of its target range -- where it had been for most of the
reporting period -- to the upper end by the end of March. A yield advantage
continued to exist for investments in repurchase agreements versus direct
investments in short-term Treasury securities. The Trust reinforced its barbell
structure over the period, combining this position in repurchase agreements with
purchase of securities with longer maturities of six to twelve months. We
believe that this portfolio structure will best enable the Trust to pursue a
competitive yield.
The Trust is expected to continue in its relatively neutral stance in the near
future, in anticipation of a stable monetary policy. However, changing economic
and market developments are continuously monitored to best serve our clients
attracted to the short-term U.S. Treasury market.
* THESE RATINGS ARE OBTAINED AFTER STANDARD & POOR'S AND MOODY'S EVALUATE A
NUMBER OF FACTORS, INCLUDING CREDIT QUALITY, MARKET PRICE EXPOSURE, AND
MANAGEMENT. THEY MONITOR THE PORTFOLIO WEEKLY FOR DEVELOPMENTS THAT COULD
CAUSE CHANGES IN RATINGS.
** PERFORMANCE QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF
FUTURE RESULTS. YIELD WILL VARY.
2
TRUST FOR U.S. TREASURY OBLIGATIONS
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------------- --------------
<C> <S> <C>
SHORT-TERM U.S. TREASURY OBLIGATIONS--25.4%
- -------------------------------------------------------------------------------
TREASURY SECURITIES--25.4%
-------------------------------------------------------------
$516,000,000(b) U.S. Treasury Bills, 4.29%-6.51%, 4/6/1995-4/4/1996 $ 504,694,446
-------------------------------------------------------------
292,000,000 U.S. Treasury Notes, 3.875%-8.50%, 4/15/1995-12/31/1995 291,230,249
------------------------------------------------------------- --------------
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 795,924,695
------------------------------------------------------------- --------------
REPURCHASE AGREEMENTS--75.3% (A)
- -------------------------------------------------------------------------------
100,000,000 BOT Securities Inc., 6.30%, dated 3/31/1995, due 4/3/1995 100,000,000
-------------------------------------------------------------
225,000,000 BT Securities Inc., 6.25%, dated 3/31/1995, due 4/3/1995 225,000,000
-------------------------------------------------------------
10,600,000 BZW Securities, Inc., 6.28%, dated 3/31/1995, due 4/3/1995 10,600,000
-------------------------------------------------------------
155,000,000 Chemical Government Securities, 6.30%, dated 3/31/1995, due
4/3/1995 155,000,000
-------------------------------------------------------------
100,000,000 Daiwa Securities America, Inc., 6.25%, dated 3/31/1995, due
4/3/1995 100,000,000
-------------------------------------------------------------
100,000,000 Deutsche Bank Government Securities, Inc., 6.30%, dated
3/31/1995, due 4/3/1995 100,000,000
-------------------------------------------------------------
40,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 6.20%, dated
3/31/1995, due 4/3/1995 40,000,000
-------------------------------------------------------------
140,000,000 First Chicago Capital Markets, Inc., 6.30%, dated 3/31/1995,
due 4/3/1995 140,000,000
-------------------------------------------------------------
140,000,000 Fuji Securities, Inc., 6.25%, dated 3/31/1995, due 4/3/1995 140,000,000
-------------------------------------------------------------
155,000,000 Goldman, Sachs and Co., 6.30%, dated 3/31/1995, due 4/3/1995 155,000,000
-------------------------------------------------------------
55,000,000 Harris-Nesbitt Thomson, Inc., 6.25%, dated 3/31/1995, due
4/3/1995 55,000,000
-------------------------------------------------------------
123,000,000 Harris-Nesbitt Thomson, Inc., 6.30%, dated 3/31/1995, due
4/3/1995 123,000,000
-------------------------------------------------------------
90,000,000 J.P. Morgan Securities, Inc., 6.30%, dated 3/31/1995, due
4/3/1995 90,000,000
-------------------------------------------------------------
60,000,000 Lehman Government Securities, Inc., 6.27%, dated 3/31/1995,
due 4/3/1995 60,000,000
-------------------------------------------------------------
120,000,000 National Westminster Bank USA, 6.20%, dated 3/31/1995, due
4/3/1995 120,000,000
-------------------------------------------------------------
</TABLE>
3
TRUST FOR U.S. TREASURY OBLIGATIONS
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------------- --------------
<C> <S> <C>
REPURCHASE AGREEMENTS (A)--CONTINUED
- -------------------------------------------------------------------------------
$140,000,000 Nations Bank of North Carolina, 6.30%, dated 3/31/1995, due
4/3/1995 $ 140,000,000
-------------------------------------------------------------
90,000,000 Nikko Securities Co. International, Inc., 6.27%, dated
3/31/1995, due 4/3/1995 90,000,000
-------------------------------------------------------------
17,000,000 State Street Bank and Trust Co., 6.27%, dated 3/31/1995, due
4/3/1995 17,000,000
-------------------------------------------------------------
230,000,000 SBC Capital Markets, New York, 6.25%, dated 3/31/1995, due
4/3/1995 230,000,000
-------------------------------------------------------------
78,000,000(c) CS First Boston Corp., 6.05%, dated 2/17/1995, due 5/18/1995 78,000,000
-------------------------------------------------------------
47,000,000(c) Daiwa Securities America, Inc., 6.00%, dated 3/1/1995, due
5/31/1995 47,000,000
-------------------------------------------------------------
59,000,000(c) Donaldson, Lufkin and Jenrette Securities Corp., 6.00%, dated
3/2/1995, due 5/31/1995 59,000,000
-------------------------------------------------------------
22,000,000(c) Lehman Government Securities, Inc., 6.05%, dated 3/9/1995,
due 5/8/1995 22,000,000
-------------------------------------------------------------
65,000,000(c) Lehman Government Securities, Inc., 6.10%, dated 1/20/1995,
due 4/20/1995 65,000,000
-------------------------------------------------------------
------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 2,361,600,000
------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST $3,157,524,695(D)
------------------------------------------------------------- --------------
--------------
<FN>
(a) The 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.
(b) Each issue shows the rate of discount at time of purchase.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($3,135,103,745) at March 31, 1995.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
4
TRUST FOR U.S. TREASURY OBLIGATIONS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in repurchase agreements $2,361,600,000
- --------------------------------------------------------------------------------
Investments in securities 795,924,695
- -------------------------------------------------------------------------------- --------------
Total investments in securities, at amortized cost value $3,157,524,695
- -------------------------------------------------------------------------------------------------
Cash 65,159,029
- -------------------------------------------------------------------------------------------------
Income receivable 7,977,220
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 56,322,539
- ------------------------------------------------------------------------------------------------- --------------
Total assets 3,286,983,483
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 14,082,417
- --------------------------------------------------------------------------------
Payable for shares redeemed 123,948,623
- --------------------------------------------------------------------------------
Income distribution payable 13,445,004
- --------------------------------------------------------------------------------
Accrued expenses 403,694
- -------------------------------------------------------------------------------- --------------
Total liabilities 151,879,738
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 3,135,103,745 shares outstanding $3,135,103,745
- ------------------------------------------------------------------------------------------------- --------------
--------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
($3,135,103,745 DIVIDED BY 3,135,103,745 shares outstanding) $ 1.00
- ------------------------------------------------------------------------------------------------- --------------
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
5
TRUST FOR U.S. TREASURY OBLIGATIONS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------
Interest $ 96,045,679
- ----------------------------------------------------------------------------------------
Total income 96,045,679
- ----------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------
Investment advisory fee $ 6,999,064
- --------------------------------------------------------------------------
Administrative personnel and services fee 1,324,573
- --------------------------------------------------------------------------
Custodian fees 227,470
- --------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 54,741
- --------------------------------------------------------------------------
Directors'/Trustees' fees 19,194
- --------------------------------------------------------------------------
Auditing fees 7,782
- --------------------------------------------------------------------------
Legal fees 133,252
- --------------------------------------------------------------------------
Portfolio accounting fees 69,991
- --------------------------------------------------------------------------
Shareholder services fee 874,883
- --------------------------------------------------------------------------
Share registration costs 12,987
- --------------------------------------------------------------------------
Printing and postage 7,547
- --------------------------------------------------------------------------
Insurance premiums 31,480
- --------------------------------------------------------------------------
Taxes 18,083
- --------------------------------------------------------------------------
Miscellaneous 23,956
- -------------------------------------------------------------------------- -----------
Total expenses 9,805,003
- --------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee $ 1,900,167
- --------------------------------------------------------------------------
Net expenses 7,904,836
- ----------------------------------------------------------------------------------------
Net investment income 88,140,843
- ---------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 88,140,843
- ---------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
6
TRUST FOR U.S. TREASURY OBLIGATIONS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MARCH 31, PERIOD ENDED
1995 SEPTEMBER 30,
(UNAUDITED) 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------
Net investment income $ 88,140,843 $ 132,429,591
- --------------------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------
Distributions from net investment income (88,140,843) (132,429,591)
- --------------------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS
- ---------------------------------------------------------------------------
Proceeds from sale of Shares 7,905,166,741 19,677,804,709
- ---------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 11,876,847 16,319,252
- ---------------------------------------------------------------------------
Cost of Shares redeemed (9,433,597,038) (19,732,124,005)
- --------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from share transactions (1,516,553,450) (38,000,044)
- --------------------------------------------------------------------------- --------------- ---------------
Change in net assets (1,516,553,450) (38,000,044)
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period 4,651,657,195 4,689,657,195
- --------------------------------------------------------------------------- --------------- ---------------
End of period $3,135,103,745 $4,651,657,195
- --------------------------------------------------------------------------- --------------- ---------------
--------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
7
TRUST FOR U.S. TREASURY OBLIGATIONS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MARCH YEARS ENDED SEPTEMBER 30,
31, 1995 ------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
- ---------------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------
Net investment income 0.03 0.03 0.03 0.04 0.06 0.08
- ---------------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.03) (0.03) (0.03) (0.04) (0.06) (0.08)
- ---------------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
-------------- ------------ ------------ ------------ ------------ ------------
TOTAL RETURN (A) 2.55% 3.31% 2.84% 4.00% 6.49% 8.18%
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 0.45%(b) 0.45% 0.45% 0.45% 0.45% 0.45%
- ----------------------------------------
Net investment income 5.04%(b) 3.21% 2.80% 3.95% 6.33% 7.89%
- ----------------------------------------
Expense waiver/reimbursement (c) 0.11% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period (000
omitted) $3,135,104 $4,651,657 $4,689,657 $5,271,259 $5,744,351 $5,997,327
- ----------------------------------------
<CAPTION>
1989 1988 1987 1986
- ---------------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------
Net investment income 0.09 0.07 0.06 0.07
- ---------------------------------------- ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.09) (0.07) (0.06) (0.07)
- ---------------------------------------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------- ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
TOTAL RETURN (A) 8.89% 6.83% 5.89% 6.89%
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 0.45% 0.45% 0.45% 0.45%
- ----------------------------------------
Net investment income 8.56% 6.61% 5.74% 6.63%
- ----------------------------------------
Expense waiver/reimbursement (c) 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period (000
omitted) $5,747,794 $4,766,221 $4,846,175 $4,780,610
- ----------------------------------------
<FN>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) Computed on an annualized basis.
(c) This contractual expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
8
TRUST FOR U.S. TREASURY OBLIGATIONS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(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 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.
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"). Risks may arise from
the potential inability of counterparties to honor the terms of the
repurchase agreement. Accordingly, the Trust could receive less than the
repurchase price on the sale of collateral securities.
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
9
TRUST FOR U.S. TREASURY OBLIGATIONS
- ---------------------------------------------------------
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.
(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 March
31, 1995, capital paid-in aggregated $3,135,103,745. Transactions in Trust
shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MARCH 31, 1995 SEPTEMBER 30,
(UNAUDITED) 1994
- -------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares Sold 7,905,166,741 19,677,804,709
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 11,876,847 16,319,252
- --------------------------------------------------
Shares redeemed (9,433,597,038) (19,732,124,005)
- -------------------------------------------------- ---------------- ----------------
Net change resulting from share transactions (1,516,553,450) (38,000,044)
- -------------------------------------------------- ---------------- ----------------
---------------- ----------------
</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 witholding taxes, and extraordinary
expenses) exceed .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. The FAS fee is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services, the Trust will pay Federated Shareholder
Services up to .25 of 1% of average net assets of the Trust for the period. This
fee is to obtain certain services for shareholders and to maintain the
shareholder accounts. For the period ended March 31, 1995, the Trust did not
incur a shareholder services fee.
10
TRUST FOR U.S. TREASURY OBLIGATIONS
- ---------------------------------------------------------
TRANSFER AGENT FEES--Federated Services Company serves as transfer and dividend
disbursing agent for the Trust. This fee is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--Federated Services Company maintains the Trust's
accounting records. The fee is based on the level of the Fund's average net
assets for the period plus, out-of-pocket expenses.
CUSTODIAN FEES--State Street Bank and Trust Company is the Trust's custodian.
The fee is based on the level of the Fund's average net assets for the period
plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Trustees of the above companies.
11
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Peter E. Madden VICE PRESIDENT
Gregor F. Meyer Edward C. Gonzales
John E. Murray, Jr. VICE PRESIDENT AND TREASURER
Wesley W. Posvar John W. McGonigle
Marjorie P. Smuts VICE PRESIDENT AND SECRETARY
David M. Taylor
ASSISTANT TREASURER
Robert C. Rosselot
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the Trust's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
12
