EDWARD D.
JONES & CO.
DAILY PASSPORT
CASH TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
AUGUST 31, 1994
ESTABLISHED 1980
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVETORS TOWER
PITTSBURGH, PA 15222-3779
480023100
8092605 (10/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for the Edward
D. Jones & Co. Daily Passport Cash Trust (the "Trust"). This Report covers the
six-month period ended August 31, 1994. The Report contains an interview with
the Trust's portfolio manager, Susan R. Hill, Assistant Vice President of
Federated Research Corp., and continues with a complete lisTing of the
Trust's holdings and financial statements.
During 1994, Alan Greenspan, Chairman of the Federal Reserve Board, increased
the Federal funds rate over 150 basis points causing the price of short-term
and long-term government bonds to decline. This rise in short- term rates was
the first the U.S. economy had experienced in four years.
Sophisticated investors and institutions alike misjudged the reaction to these
increases, and some of the investment activities they had engaged in during
1992 and 1993 caused their holdings to decline in value, as the rate
environment changed dramatically. In previous years, managers of short-term and
long-term government securities were able to use sophisticated interest rate
instruments to their advantage as rates declined. Some of these interest rate
instruments have become well-known to readers of financial publications as
"derivatives."
I would like to assure the shareholders of the Trust that in managing your
assets, we DO NOT use speculative derivatives.
Today, when managers of money market funds are being reviewed in publications
throughout the country, it is extremely important to realize that the Trust's
management team does not engage in the use of derivatives that have caused a
number of money market funds to break the $1.00 per share value.
A number of derivatives commonly written about--IOs or "income only," POs or
"principal only," floaters, etc. are not acceptable instruments for money
market funds. The sophisticated derivatives used by hedge funds and some
government bond funds are not suitable for use in money market funds either.
Shareholders of the Trust can be assured that the $1.00 per share value that
the Trust has maintained since April, 1980 to the present time will continue to
be as stable, and the income will be earned so that shareholders will receive a
competitive yield and daily liquidity.*
* Although no money market fund can guarantee that stable net asset value will
be maintained, the Trust has done so since its inception.
The Trust is the keystone of the Edward D. Jones Full Service Account. As a
shareholder, you have a convenient, relatively safe way to put your cash to
work earning income--every day. The Trust invests exclusively in short-term
U.S. government securities, including U.S. Treasury bills, Treasury and agency
notes, and the repurchase agreements fully collateralized by U.S. Treasury
securities. These securities are among the safest available because the payment
of principal and interest is guaranteed by the U.S. government.
During the six-month reporting period ended August 31, 1994, the Trust paid
dividends to shareholders totaling $0.02 per share, or $32 million. At the end
of the reporting period, the Trust's net assets stood at $2.1 billion. The
Trust's current 7-day yield is 3.83%.*
Thank you for participating in the Edward D. Jones & Co. Daily Passport Cash
Trust, now in its 15th year of serving the cash needs of Edward D. Jones'
clients. We welcome your questions and comments.
Best regards,
Richard B. Fisher
President
October 15, 1994
* Past performance may not be indicative of future performance. Yield will
vary.
INVESTMENT REVIEW
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<TABLE>
<S> <C>
Q Interest rates turned upward early in the year, thanks to the Federal
Reserve Board (the "Fed"). Can you bring us up-to-date on the series of rate
increases?
A 1994 brought with it the first changes in Fed policy since September, 1992.
Faced with the potential of rising inflation and sparked by a
strengthening economy, in early February, 1994, Alan Greenspan, Chair-
man of the Fed, raised the Fed funds' target rate by 0.25% to 3.25%. This
was the first in a series of tightenings in monetary policy. Further tighten-
ings occurred in March, April, May, and August, 1994, with the Fed funds'
target rate standing at 4.75% at the end of the semi-annual reporting period
in August, 1994. The policy moves in May and August, 1994 were accompa-
nied by 0.50% hikes in the discount rate, which currently rests at 4%.
Q How has the Trust's yield reacted to this rate rise?
Susan R. Hill
Assistant Vice
President,
Federated Research A The short-term money market investments in the Trust have proven to be quite
Corp. responsive to the changes in policy by the Fed. Over the semi-annual
reporting period, the Trust's yield rose from 2.6% to 3.9%.*
Q In this rising rate atmosphere, have you made any strategic changes to the
Trust's portfolio?
A We shortened the Trust's average maturity over the semi-annual reporting
period in response to the uncertain environment created by the Fed, and
currently the target is a rather conservative 30-40 day average maturity range. The
Trust continued to combine attractive yields from repurchase agreements
collateralized by U.S. government mortgage-backed securities with short-term agency
floating rate notes and Treasury and agency securities with longer maturities of six
to twelve months.
</TABLE>
* Past performance may not be indicative of future performance. Yield will
vary.
<TABLE>
<S> <C>
We added to the Trust's positions in both repurchase agreements and agency floating
rate notes to increase its responsiveness to changes in short-term interest rates,
as well as to maintain the flexibility to reinvest at anticipated higher interest
rates. A yield advantage continued to exist for investments in repurchase agreements
versus direct investments in short-term, fixed rate Treasury and agency securities.
This portfolio structure has performed well in the current interest rate
environment. The Trust, is also rated AAAm by Standard & Poor's Ratings Group*, the
highest rating given to a money market fund.
Q Do you expect rates to remain stable over the near future?
A Amid signs of upward pressures on capacity and commodity prices, it is
expected that the Fed will act to tighten monetary policy again before the
end of 1994. As a result, the Trust is expected to continue to maintain its
conservative posture in the near future, while maximizing performance through
ongoing relative value analysis. However, changing economic and market developments
are continuously monitored to best serve our clients attracted to the short-term
fixed-rate Treasury and agency securities. This portfolio structure has performed
well in the current interest rate environment.
Q Some of our shareholders may have read about the recent problems some money
market funds have had with major losses on investments in derivative
securities. Can you comment on Federated's general policy on this issue?
A We have been managing money market funds since 1973, and have always
followed very, very strict policies regarding investment quality. We are
extremely sensitive to preserving the stable $1.00 share value of our money market
funds. As a result, Federated has not had, nor does it have, any problem related to
the use of derivatives in the Trust or any of the money market funds we manage.
</TABLE>
* Ratings are subject to change.
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1994
(UNAUDITED)
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- --------------- ----------------------------------------------------------------------------- -----------------
SHORT-TERM OBLIGATIONS--33.2%
- ----------------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE NOTES--4.7%
-----------------------------------------------------------------------------
$ 100,000,000 5.305%, 9/7/94(a) $ 99,971,594
----------------------------------------------------------------------------- -----------------
FEDERAL HOME LOAN MORTGAGE, DISCOUNT NOTES--0.3%
-----------------------------------------------------------------------------
6,000,000 3.31%, 9/16/94(b) 5,991,725
----------------------------------------------------------------------------- -----------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--13.3%
-----------------------------------------------------------------------------
283,045,000 3.42%-5.09%, 9/1/94-2/17/95(b) 279,963,416
----------------------------------------------------------------------------- -----------------
FEDERAL HOME LOAN BANK, DISCOUNT NOTES--3.1%
-----------------------------------------------------------------------------
66,000,000 3.92%-4.93%, 9/7/94-4/24/95(b) 64,936,776
----------------------------------------------------------------------------- -----------------
FEDERAL HOME LOAN MORTGAGE NOTES--2.1%
-----------------------------------------------------------------------------
43,500,000 4.72%, 8/10/95 43,459,122
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FEDERAL NATIONAL MORTGAGE ASSOCIATION NOTE--3.1%
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64,500,000 4.67%-4.71%, 6/1/95-8/30/96 64,481,044
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U.S. TREASURY BILLS--3.0%
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64,500,000 3.30%-5.378%, 9/22/94-5/4/95(b) 63,337,103
----------------------------------------------------------------------------- -----------------
U.S. TREASURY NOTES--3.6%
-----------------------------------------------------------------------------
76,000,000 5.50%-8.50%, 11/15/94-5/15/95 76,545,812
----------------------------------------------------------------------------- -----------------
TOTAL SHORT-TERM OBLIGATIONS 698,686,592
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*REPURCHASE AGREEMENTS--70.1%
- ----------------------------------------------------------------------------------------------
36,400,000 Barclays de Zoete Wedd Securities Inc., 4.82%, dated 8/31/94, due 9/1/94 36,400,000
-----------------------------------------------------------------------------
300,000,000 BT Securities Inc., 4.85%, dated 8/31/94, due 9/1/94 300,000,000
-----------------------------------------------------------------------------
100,000,000 Daiwa Securities America, Inc., 4.80%, dated 8/31/94, due 9/1/94 100,000,000
-----------------------------------------------------------------------------
100,000,000 Deutsche Bank Government Securities, Inc., 4.85%, dated
8/31/94, due 9/1/94 100,000,000
-----------------------------------------------------------------------------
100,000,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.80%, dated
8/31/94, due 9/1/94 100,000,000
-----------------------------------------------------------------------------
60,000,000 Fuji Securities, Inc., 4.88%, dated 8/31/94, due 9/1/94 60,000,000
-----------------------------------------------------------------------------
100,000,000 HSBC Securities, Inc., 4.87%, dated 8/31/94, due 9/1/94 100,000,000
-----------------------------------------------------------------------------
100,000,000 Kidder Peabody & Co., Inc., 4.875%, dated
8/31/94, due 9/1/94 100,000,000
-----------------------------------------------------------------------------
30,000,000 Merrill Lynch Government Securities, Inc., 4.875%, dated
8/31/94, due 9/1/94 30,000,000
-----------------------------------------------------------------------------
85,000,000 Smith Barney, Inc., 4.87%, dated 8/31/94, due 9/1/94 85,000,000
-----------------------------------------------------------------------------
250,000,000 UBS Securities, Inc., 4.85%, dated 8/31/94, due 9/1/94 250,000,000
-----------------------------------------------------------------------------
27,000,000 +\First Boston Corp., 4.65%, dated 6/30/94, due 9/28/94 27,000,000
-----------------------------------------------------------------------------
40,000,000 +\Fuji Securities, Inc., 4.82%, dated 8/10/94, due 11/17/94 40,000,000
-----------------------------------------------------------------------------
68,000,000 +\Goldman, Sachs & Co., 4.75%, dated 8/25/94, due 9/23/94 68,000,000
-----------------------------------------------------------------------------
28,000,000 +\Merrill Lynch Government Securities, Inc., 4.625%, dated
6/29/94, due 9/26/94 28,000,000
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50,000,000 +\Morgan Stanley & Co., Inc., 4.60%, dated 7/5/94, due 9/6/94 50,000,000
----------------------------------------------------------------------------- -----------------
TOTAL REPURCHASE AGREEMENTS 1,474,400,000
----------------------------------------------------------------------------- -----------------
TOTAL INVESTMENTS, AT AMORTIZED COST $2,173,086,592+
----------------------------------------------------------------------------- -----------------
</TABLE>
(a) Floating rate note with current rate and next reset date shown.
(b) Discount rate at time of purchase.
* Repurchase Agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in repurchase agreements were through participation in joint
accounts with other Federated funds.
+ Also represents cost for federal tax purposes.
+\ Although final maturity falls beyond seven days, a liquidity feature is
included in this transaction to permit termination of the repurchase
agreements within seven days.
Note: The categories of investments are shown as a percentage of net assets
($2,101,641,746) at
August 31, 1994.
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1994
(UNAUDITED)
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<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------
Investments in repurchase agreements $ 1,474,400,000
- ---------------------------------------------------------------------------
Investments in other marketable securities 698,686,592
- --------------------------------------------------------------------------- -----------------
Investments, at amortized cost and value $ 2,173,086,592
- ----------------------------------------------------------------------------------------------
Cash 778,789
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Interest receivable 3,042,918
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Total assets 2,176,908,299
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LIABILITIES:
- ----------------------------------------------------------------------------------------------
Payable for Trust shares redeemed 36,491,500
- ---------------------------------------------------------------------------
Payable for investments purchased 34,983,200
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Dividends payable 1,935,298
- ---------------------------------------------------------------------------
Accrued expense 1,856,555
- --------------------------------------------------------------------------- -----------------
Total liabilities 75,266,553
- ---------------------------------------------------------------------------------------------- -----------------
NET ASSETS for 2,101,641,746 shares of beneficial interest outstanding $ 2,101,641,746
- ---------------------------------------------------------------------------------------------- -----------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
($2,101,641,746 / 2,101,641,746 shares of beneficial interest outstanding) $1.00
- ---------------------------------------------------------------------------------------------- -----------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1994
(UNAUDITED)
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<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------------
Interest income $ 42,417,180
- --------------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------------------
Investment advisory fee $ 4,874,539
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Trustees' fees 2,653
- -----------------------------------------------------------------------------------
Administrative personnel and services 768,137
- -----------------------------------------------------------------------------------
Shareholder services fees 2,654,628
- -----------------------------------------------------------------------------------
Custodian and record keeping fees and expenses 194,041
- -----------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 1,599,618
- -----------------------------------------------------------------------------------
Trust share registration costs 90,791
- -----------------------------------------------------------------------------------
Auditing fees 15,000
- -----------------------------------------------------------------------------------
Legal fees 11,332
- -----------------------------------------------------------------------------------
Printing and postage 127,999
- -----------------------------------------------------------------------------------
Miscellaneous 25,620
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Total expenses 10,364,358
- -------------------------------------------------------------------------------------------------- --------------
Net investment income $ 32,052,822
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28,
<S> <C> <C>
1995* 1994
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 32,052,822 $ 49,828,767
- ------------------------------------------------------------------------- ------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------
Dividends to shareholders from net investment income (32,052,822) (49,828,767)
- ------------------------------------------------------------------------- ------------------ ------------------
TRUST SHARE (PRINCIPAL) TRANSACTIONS
- -------------------------------------------------------------------------
Proceeds from sale of shares 4,670,047,472 9,022,703,218
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 30,611,310 49,139,474
- -------------------------------------------------------------------------
Cost of shares redeemed (4,770,241,552) (9,123,844,305)
- ------------------------------------------------------------------------- ------------------ ------------------
Change in net assets from Trust share transactions (69,582,770) (52,001,613)
- ------------------------------------------------------------------------- ------------------ ------------------
Change in net assets (69,582,770) (52,001,613)
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 2,171,224,516 2,223,226,129
- ------------------------------------------------------------------------- ------------------ ------------------
End of period $ 2,101,641,746 $ 2,171,224,516
- ------------------------------------------------------------------------- ------------------ ------------------
</TABLE>
* Six months ended August 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995* 1994 1993 1992 1991 1990 1989 1988 1987
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.02 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.06
- ---------------------------
LESS DISTRIBUTIONS
- ---------------------------
Dividends to shareholders
from net investment income (0.02) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (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
- --------------------------- ----- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN** 1.54% 2.33% 2.82% 4.98% 7.39% 8.63% 7.24% 6.15% 5.79%
- ---------------------------
RATIOS TO AVERAGE NET
ASSETS
- ---------------------------
Expenses 0.98%(a) 0.95% 0.95% 0.87% 0.83% 0.88% 1.01% 1.03% 1.03%
- ---------------------------
Net investment income 3.02%(a) 2.31% 2.79% 4.89% 7.13% 8.23% 7.14% 6.00% 5.63%
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
Net assets, end of period
(000 omitted)
$2,101,642 $2,171,225 $2,223,226 $2,469,295 $2,631,671 $2,235,991 $1,279,762 $744,107 $656,730
- ---------------------------
<CAPTION>
<S> <C>
1986
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.07
- ---------------------------
LESS DISTRIBUTIONS
- ---------------------------
Dividends to shareholders
from net investment income (0.07)
- --------------------------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00
- --------------------------- ---------
TOTAL RETURN** 7.43%
- ---------------------------
RATIOS TO AVERAGE NET
ASSETS
- ---------------------------
Expenses 1.03%
- ---------------------------
Net investment income 7.17%
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
Net assets, end of period
(000 omitted) $645,553
- ---------------------------
</TABLE>
* Six months ended August 31, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
EDWARD D. JONES & CO. DAILY PASSPORT CASH TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Edward D. Jones & Co. Daily Passport Cash Trust (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 guidelines established
by the Board of Trustees ("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 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 August
31, 1994, capital paid-in aggregated $2,101,641,746. Transactions in Trust
shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28,
<S> <C> <C>
1995* 1994
- ---------------------------------------------------------------------------- ----------------- -----------------
Shares sold 4,670,047,472 9,022,703,218
- ----------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 30,611,310 49,139,474
- ----------------------------------------------------------------------------
Shares redeemed (4,770,241,552) (9,123,844,305)
- ---------------------------------------------------------------------------- ----------------- -----------------
Net change resulting from Trust share transactions (69,582,770) (52,001,613)
- ---------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
* Six months ended August 31, 1994 (unaudited)
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Passport Research, Ltd., the Trust's investment adviser
("Adviser"), receives an annual investment advisory fee based on average daily
net assets of the Trust as follows: 0.50% on the first $500 million, 0.475% on
the next $500 million, 0.45% on the next $500 million, 0.425% on the next $500
million and 0.40% thereafter. The Adviser will waive the amount that normal
operating expenses of the Trust (including the investment advisory fee, but
excluding brokerage commissions, interest, taxes and extraordinary expenses)
exceed 2-1/2% per year on the first $30 million of average daily net assets of
the Trust, 2% per year on the next $70 million of average daily net assets of
the Trust, and 1-1/2% per year on any additional net assets.
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 share.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Edward D. Jones & Co., the Trust will pay Edward D. Jones & Co. 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 AND DIVIDEND DISBURSING AGENT--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. Edward D. Jones & Co.
is sub-transfer agent for the shares of the Trust.
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Richard B. Fisher
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Vice President and Treasurer
Wesley W. Posvar John W. McGonigle
Marjorie P. Smuts Vice President and Secretary
David M. Taylor
Assistant Treasurer
Charles H. Field
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 FDIC, the Federal
Reserve Board, or any other government agency. 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.
