TRUST FOR FEDERAL SECURITIES, 485B24E, 1995-02-27

TRUST FOR FEDERAL SECURITIES
485B24E, 1995-02-27

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 27, 1995
Registration No. 2-53808
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

POST-EFFECTIVE AMENDMENT NO. 40
on
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/

--------------------

TRUST FOR FEDERAL SECURITIES
(FedFund, T-Fund, FedCash, T-Cash, Federal Trust Fund,
Treasury Trust Fund, and Short Government Fund Portfolios)
(Exact Name of Registrant as Specified in Charter)

Bellevue Park Corporate Center EDWARD J. ROACH
400 Bellevue Parkway, Suite 100 Bellevue Park Corporate Center
Wilmington, Delaware 19809 400 Bellevue Parkway, Suite 100
(Address of Principal Executive Offices) Wilmington, Delaware 19809
Registrant's Telephone Number: (Name and Address of
(302) 792-2555 Agent for Service)

Copy to:
W. BRUCE McCONNEL, III
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496

It is proposed that this filing will become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b)
/x/ on February 28, 1995 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of rule 485.

If appropriate, check the following box:

/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

================================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE
UNDER THE SECURITIES ACT OF 1933(1)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum Amount
Securities Amounts Offering Aggregate of Regi-
Being Being Price Per Offering stration
Registered Registered(1) Unit(2) Price(3) Fee
- ---------- ------------- ----------- ----------- --------
<S> <C> <C> <C> <C>
Shares of bene-
ficial interest in

FedFund
No Par Value 1,386,808,372 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------

T-Fund
No Par Value 351,342,825 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------

FedCash
No Par Value 121,818,145 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------

T-Cash
No Par Value 284,021,419 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------

Federal Trust Fund
No Par Value 101,975,597 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------

Treasury Trust Fund
No Par Value 585,170,846 $1.00
- ------------------------------------------------------------------------------------------------------------------------------------

Short Government Fund
No Par Value 823,781 $9.28
- ------------------------------------------------------------------------------------------------------------------------------------

Total Shares of
Beneficial Interest
in Trust for
Federal Securities
No Par Value 2,831,960,985 $290,000 $100
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- ------------------------

1. Registrant has registered an indefinite number of shares of beneficial
interest in FedFund, T-Fund, FedCash, T-Cash, Federal Trust Fund,
Treasury Trust Fund, Short Government Fund and Intermediate Government
Fund Portfolios under the Securities Act of 1933 pursuant to Rule
24f-2 under the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for its fiscal year ending October 31, 1994 for
Registration No. 2-53808 was filed on December 23, 1994.

2. Estimated solely for the purpose of calculating the registration fees
pursuant to Rule 24e-2 under the Investment Company Act of 1940 and
Rule 457(c) under the Securities Act of 1933, based on an offering
price of $9.28, with respect to its Portfolio shares in Short
Government Fund on February 22, 1995.

3. The maximum aggregate offering price for Registrant's Portfolio shares
with respect to its FedFund, T-Fund, FedCash, T-Cash, Federal Trust
Fund, Treasury Trust Fund, Short Government Fund and Intermediate
<PAGE> 3
Government Fund portfolios is calculated pursuant to Rule 24e-2 under
the 1940 Act. During the year ended October 31, 1994, Registrant
redeemed a total of 20,100,673,406 FedFund Portfolio shares,
10,863,024,585 T-Fund Portfolio shares, 6,449,348,793 FedCash
Portfolio shares, 3,775,988,923 T-Cash Portfolio shares, 3,159,667,718
Federal Trust Fund Portfolio shares, 7,948,238,689 Treasury Trust Fund
Portfolio shares, 2,379,596 Short Government Fund Portfolio shares and
1,725,437 Intermediate Government Fund Portfolio shares, respectively.
Of these redeemed shares, 18,724,450,829 FedFund Portfolio shares,
10,514,363,640 T-Fund Portfolio shares, 6,328,460,517 FedCash
Portfolio shares, 3,494,135,508 T-Cash Portfolio shares, 3,058,470,533
Federal Trust Fund Portfolio shares, 7,367,534,568 Treasury Trust Fund
Portfolio shares, 1,554,825 Short Government Fund Portfolio shares
were used for reductions pursuant to paragraph (c) of Rule 24f-2
Notice dated December 23, 1994 for the year ended October 31, 1994,
and none of the redeemed shares were used for reductions pursuant to
Rule 24e-2 in previous post-effective amendments filed during the
fiscal year ended October 31, 1994. In addition, 2,043,472
Intermediate Government Fund Portfolio shares valued at $21,380,712
were allocated 10,444,136 to FedFund Portfolio shares, 2,645,991 to
T-Fund Portfolio shares, 917,425 to FedCash Portfolio shares,
2,138,991 to T-Cash Portfolio shares, 767,995 to Federal Trust Fund
Portfolio shares, 4,406,950 to Treasury Trust Fund Portfolio shares,
6,382 to Short Government Fund Portfolio shares. As a result
1,386,666,713 redeemed FedFund Portfolio shares, 351,306,936 redeemed
T-Fund Portfolio shares, 121,805,701 redeemed FedCash Portfolio
shares, 283,992,406 redeemed T-Cash Portfolio shares, 101,965,180
redeemed Federal Trust Fund Portfolio shares, 585,111,071 redeemed
Treasury Trust Fund Portfolio shares and 823,694 redeemed Short
Government Fund Portfolio shares are being used to reduce, pursuant to
paragraph (a) of Rule 24e-2, the number of shares for which the
registration fee is payable with respect to this Post-Effective
Amendment.

================================================================================

-2-
<PAGE> 4

TRUST FOR FEDERAL SECURITIES
(FedFund Portfolio)
Cross Reference Sheet

<TABLE>
<CAPTION>
Form N-1A Item Prospectus Caption
-------------- ------------------

<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page

2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Background and Expense Information

3. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . Financial Highlights; Yields

4. General Description of
Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page; Financial Highlights;
Investment Objective and Policies;
Description of Shares and
Miscellaneous

5. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . Management of the Fund; Dividends

6. Capital Stock and Other
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page; Financial Highlights;
Dividends; Taxes; Description of
Shares and Miscellaneous

7. Purchase of Securities Being
Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management of the Fund; Purchase and
Redemption of Shares

8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . Purchase and Redemption of Shares

9. Pending Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
</TABLE>
<PAGE> 5

FedFund
An Investment Portfolio Offered By
Trust for Federal Securities

<TABLE>
<S> <C>
Bellevue Park Corporate Center For purchase and redemption orders only call:
400 Bellevue Parkway 800-441-7450 (in Delaware: 302-791-5350).
Suite 100 For yield information call: 800-821-6006
Wilmington, DE 19809 (FedFund shares code: 30; FedFund Dollar
shares code: 31).
For other information call: 800-821-7432.
</TABLE>

Trust for Federal Securities (the "Company") is a no-load, diversified,
open-end investment company that currently offers shares in seven separate
investment portfolios. The shares described in this Prospectus represent
interests in the FedFund portfolio (the "Fund"), a money market portfolio.

The Fund's investment objective is to seek current income with liquidity
and security of principal. The Fund invests in a portfolio consisting of U.S.
Treasury bills, notes and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and repurchase agreements relating
to such obligations.

Fund shares may not be purchased by individuals directly, but institutional
investors may purchase shares for accounts maintained by individuals. In
addition to FedFund shares, investors may purchase FedFund "Dollar" shares which
accrue daily dividends in the same manner as FedFund shares but bear all fees
payable by the Fund to institutional investors for certain services they provide
to the beneficial owners of such shares. (See "Management of the Fund-Service
Organizations.")

------------------------
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED, ENDORSED,
OR OTHERWISE SUPPORTED BY PNC BANK CORP. OR ITS AFFILIATES, OR THE U.S.
GOVERNMENT, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THERE CAN BE NO
ASSURANCE THAT IT WILL BE ABLE TO MAINTAIN ITS NET ASSET
VALUE OF $1.00 PER SHARE.
------------------------

This Prospectus briefly sets forth certain information about the Fund that
investors should know before investing. Investors are advised to read this
Prospectus and retain it for future reference. Additional information about the
Fund, contained in a Statement of Additional Information currently dated
February 28, 1995, has been filed with the Securities and Exchange Commission
and is available to investors without charge by calling the Fund at
800-821-7432. The Statement of Additional Information, as amended from time to
time, is incorporated in its entirety by reference into 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.
------------------------

February 28, 1995

<PAGE> 6

BACKGROUND AND EXPENSE INFORMATION

Two classes of shares are offered by this Prospectus: FedFund shares and
FedFund Dollar shares. Shares of each class represent equal, pro rata interests
in the Fund and accrue daily dividends in the same manner except that the Dollar
shares bear fees payable by the Fund (at the rate of .25% per annum) to
institutional investors for services they provide to the beneficial owners of
such shares. (See "Management of the Fund--Service Organizations.")

EXPENSE SUMMARY

<TABLE>
<CAPTION>
FEDFUND
FEDFUND DOLLAR
SHARES SHARES
---------- ----------
<S> <C> <C> <C> <C>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
- ----------------------------------------------------------------------
(as a percentage of average net assets)
Management Fees (net of waivers)................................. .07% .07%
Other Expenses................................................... .11% .36%
Administration Fees (net of waivers)........................ .07% .07%
Shareholder Servicing Fees.................................. 0% .25%
Miscellaneous............................................... .04% .04%
--- ---
Total Fund Operating Expenses (net of waivers)................... .18% .43%
=== ===
</TABLE>

- ------------

<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 investment,
assuming (1) a 5% annual return and (2) redemption at the
end of each time period with respect to the following
shares:
FedFund shares: $2 $ 6 $10 $23
FedFund Dollar shares: $4 $14 $24 $54
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATE OF RETURN. ACTUAL EXPENSES AND RATE OF RETURN MAY BE GREATER OR
LESSER THAN THOSE SHOWN.

The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. In addition, institutional investors may charge
fees for providing shareholder administrative services in connection with their
customers' investment in FedFund Dollar shares. (For more complete descriptions
of the various costs and expenses, see "Management of the Fund" in this
Prospectus and the Statement of Additional Information and the financial
statements and related notes contained in the Statement of Additional
Information.) The investment adviser and administrators have waived advisory and
administration fees or have reimbursed the Fund for some or all of its operating
expenses pursuant to an agreement that extends to January 18, 1996. The
foregoing table gives effect to this agreement. It is anticipated that they may
continue to do so on a voluntary basis thereafter. Absent fee waivers for the
fiscal year ended October 31, 1994, the estimated "Total Fund Operating
Expenses" for FedFund Shares and FedFund Dollar Shares would have been .30% and
.55%, respectively, of the average net assets of the FedFund portfolio. The
foregoing table has not been audited by the Fund's independent accountants.

2
<PAGE> 7

FINANCIAL HIGHLIGHTS

The following financial highlights for FedFund Shares have been derived
from the financial statements of the Fund for the fiscal year ended October 31,
1994, and for each of the nine preceding fiscal years, and for FedFund Dollar
Shares for the fiscal year ended October 31, 1994 and for each of the nine
preceding fiscal years. The financial highlights for the fiscal years set forth
below have been audited by Coopers & Lybrand L.L.P. independent accountants
whose report on the financial statements and financial highlights (for the
most recent five years) of the Fund is included in the Statement of Additional
Information. The tables should be read in conjunction with the financial
statements and related notes included in the Statement of Additional
Information. Further information about the performance of the Fund is available
in the annual report to shareholders, which may be obtained without charge by
calling 800-821-7432.

TRUST FOR FEDERAL SECURITIES

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout Each Period)

FEDFUND SHARES

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income From Investment Operations:
Net Investment Income................. .0377 .0308 .0397 .0637 .0800 .0891 .0703
Net Capital Gains..................... -- .0001 .0010 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total From Investment Operations...... .0377 .0309 .0407 .0637 .0800 .0891 .0703
---------- ---------- ---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income................. (.0377) (.0308) (.0397) (.0637) (.0800) (.0891) (.0703)
Net Capital Gains..................... -- (.0001) (.0010) -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Distributions................... (.0377) (.0309) (.0407) (.0637) (.0800) (.0891) (.0703)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= ========= =========
Total Return.......................... 3.84% 3.12% 4.15% 6.56% 8.29% 9.29% 7.28%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s)... $1,557,562 $1,290,971 $2,976,954 $1,918,966 $1,488,141 $1,786,196 $1,772,390
Ratio of Expenses to Average Net
Assets.............................. .18%(1) .20%(1) .27% .30% .30%(1) .30%(1) .30%(1)
Ratio of Net Investment Income to
Average Net Assets.................. 3.78% 3.08% 3.91% 6.36% 8.00% 8.91% 7.02%

<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------
1987 1986 1985
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....$ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Income From Investment Operations:
Net Investment Income................. .0614 .0676 .0813
Net Capital Gains..................... -- -- --
---------- ---------- ----------
Total From Investment Operations...... .0614 .0676 .0813
---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income................. (.0614) (.0676) (.0813)
Net Capital Gains..................... -- -- --
---------- ---------- ----------
Total Distributions................... (.0614) (.0676) (.0813)
---------- ---------- ----------
Net Asset Value, End of Period..........$ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return.......................... 6.32% 6.98% 8.44%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s)...$2,108,838 $2,135,060 $1,644,635
Ratio of Expenses to Average Net
Assets.............................. .30%(1) .33% .35%(1)
Ratio of Net Investment Income to
Average Net Assets.................. 6.12% 6.70% 8.11%
</TABLE>

- ------------

(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets would have been .30%, .27%, .34%, .35%,
.32%, .32%, .42% and .39% respectively, for each of the years ended October
31, 1994, 1993, 1990, 1989, 1988, 1987, 1985 and 1984, respectively, for
FedFund shares.

3
<PAGE> 8

TRUST FOR FEDERAL SECURITIES
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout Each Period)
FEDFUND DOLLAR SHARES

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- ------- ------- -------
Income From Investment Operations:
Net Investment Income........................... .0352 .0283 .0372 .0612 .0775 .0866 .0678
Net Capital Gains............................... -- .0001 .0010 -- -- -- --
-------- -------- -------- ------- ------- ------- -------
Total From Investment Operations................ .0352 .0284 .0382 .0612 .0775 .0866 .0678
-------- -------- -------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income........................... (.0352) (.0283) (.0372) (.0612) (.0775) (.0866) (.0678)
Net Capital Gains............................... -- (.0001) (.0010) -- -- -- --
-------- -------- -------- ------- ------- ------- -------
Total Distributions............................. (.0352) (.0284) (.0382) (.0612) (.0775) (.0866) (.0678)
-------- -------- -------- ------- ------- ------- -------
Net Asset Value, End of Period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======= ======= ======= =======
Total Return.................................... 3.59% 2.87% 3.90% 6.31% 8.04% 9.04% 7.02%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s)............. $135,769 $169,877 $148,363 $62,842 $19,815 $15,473 $35,741
Ratio of Expenses to Average Net Assets......... .43%(1) .45%(1) .52% .55% .55%(1) .55%(1) .55%(1)
Ratio of Net Investment Income to Average Net
Assets........................................ 3.51% 2.83% 3.66% 6.11% 7.75% 8.66% 6.77%

<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------
1987 1986 1985
------- ------- -------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 1.00 $ 1.00 $ 1.00
------- ------- -------
Income From Investment Operations:
Net Investment Income........................... .0589 .0651 .0797
Net Capital Gains............................... -- -- --
------- ------- -------
Total From Investment Operations................ .0589 .0651 .0797
------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income........................... (.0589) (.0651) (.0797)
Net Capital Gains............................... -- -- --
------- ------- -------
Total Distributions............................. (.0589) (.0651) (.0797)
------- ------- -------
Net Asset Value, End of Period.................... $ 1.00 $ 1.00 $ 1.00
======= ======= =======
Total Return.................................... 6.05% 6.71% 8.26%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s)............. $29,372 $37,131 $44,736
Ratio of Expenses to Average Net Assets......... .55%(1) .58%(1) .41%(1)
Ratio of Net Investment Income to Average Net
Assets........................................ 5.87% 6.45% 7.91%
</TABLE>

- ------------

(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .55%, .52%, .59%, .60%,
.57%, .57%, 67% and .64% (annualized), respectively, for each of the years
ended October 31, 1994, 1993, 1990, 1989, 1988, 1987 and 1985, and the
period ended October 31, 1984, respectively, for FedFund Dollar shares.

4
<PAGE> 9

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to seek current income with liquidity
and security of principal. The Fund invests in obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities (in addition to direct
Treasury obligations) and repurchase agreements relating to such obligations.
Portfolio securities held by the Fund have remaining maturities of 397 days
(thirteen months) or less (with certain exceptions), subject to the quality,
diversification, and other requirements of Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act") and other rules of the
Securities and Exchange Commission (the "SEC").

The "instrumentalities" or "agencies" of the U.S. Government the
obligations of which may be purchased by FedFund include: the Central Bank for
Cooperatives, Export-Import Bank of the United States, Farmers Home
Administration, Federal Farm Credit Banks, Federal Financing Bank, Federal Home
Loan Banks, Federal Home Loan Mortgage Corporation, Federal Housing
Administration, Federal Intermediate Credit Banks, Federal Land Banks, Federal
National Mortgage Association, Financing Corporation, General Services
Administration, Government National Mortgage Association, International Bank for
Reconstruction and Development, Maritime Administration, Private Export Funding
Corp., Resolution Trust Company, Small Business Administration, Student Loan
Marketing Association, Tennessee Valley Authority and Washington D.C. Armory
Board. Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. Government are backed by the full faith and credit of the United
States; others are backed by the right of the issuer to borrow from the U.S.
Treasury or are backed only by the credit of the agency or instrumentality
issuing the obligation.

Securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities have historically involved little risk of loss of principal if
held to maturity. However, due to fluctuations in interest rates, the market
value of such securities may vary during the period a shareholder owns shares of
the Fund. Certain government securities held by the Fund may have remaining
maturities exceeding thirteen months if such securities provide for adjustments
in their interest rates not less frequently than every thirteen months. To the
extent consistent with its investment objectives, the Fund may invest in
Treasury receipts and other "stripped" securities issued or guaranteed by the
U.S. Government, where the principal and interest components are traded
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS"). Under the STRIPS program, the principal and
interest components are individually numbered and separately issued by the U.S.
Treasury at the request of depository financial institutions, which then trade
the component parts independently. Currently, the Fund only invests in
"stripped" securities issued or guaranteed by the U.S. Government which are
registered under the STRIPS program.

The Fund may purchase government securities from financial institutions,
such as banks and broker-dealers, subject to the seller's agreement to
repurchase them at an agreed upon time and price ("repurchase agreements"). The
securities subject to a repurchase agreement may bear maturities exceeding
thirteen months, provided the repurchase agreement itself matures in one year or
less. The Fund will not invest more than 10% of the value of its net assets in
repurchase agreements which do not provide for settlement within seven days. The
seller under a repurchase agreement will be required to maintain the value of
the securities subject to the agreement at not less than the repurchase price
(including accrued interest). Default by or bankruptcy of the seller

5
<PAGE> 10

would, however, expose the Fund to possible loss because of adverse market
action or delay in
connection with the disposition of the underlying obligations.

The Fund may borrow funds for temporary purposes by entering into reverse
repurchase agreements in accordance with the investment restrictions described
below. Pursuant to such agreements, the Fund would sell portfolio securities to
financial institutions and agree to repurchase them at an agreed upon date and
price. The Fund would consider entering into reverse repurchase agreements to
avoid otherwise selling securities during unfavorable market conditions to meet
redemptions. Reverse repurchase agreements involve the risk that the market
value of the portfolio securities sold by the Fund may decline below the price
of the securities the Fund is obligated to repurchase.

The Fund may purchase securities on a "when-issued" basis. When-issued
securities are securities purchased for delivery beyond the normal settlement
date at a stated price and yield. The Fund will generally not pay for such
securities or start earning interest on them until they are received. Securities
purchased on a when-issued basis are recorded as an asset and are subject to
changes in value based upon changes in the general level of interest rates. The
Fund expects that commitments to purchase when-issued securities will not exceed
25% of the value of its total assets absent unusual market conditions. The Fund
does not intend to purchase when-issued securities for speculative purposes but
only in furtherance of its investment objective.

The Fund may also lend its portfolio securities to financial institutions
in accordance with the investment restrictions described below. Such loans would
involve risks of delay in receiving additional collateral or in recovering the
securities loaned or even loss of rights in the collateral should the borrower
of the securities fail financially. However, loans will be made only to
borrowers deemed by the Fund's investment adviser to be of good standing and
only when, in the adviser's judgment, the income to be earned from the loans
justifies the attendant risks.

INVESTMENT LIMITATIONS

The Fund's investment objective and policies described above are not
fundamental and may be changed by the Company's Board of Trustees without a vote
of shareholders. If there is a change in the investment objective, shareholders
should consider whether the Fund remains an appropriate investment in light of
their then current financial position and needs. The Fund's investment
limitations summarized below may not be changed without the affirmative vote of
the holders of a majority of its outstanding shares. (A complete list of the
investment limitations that cannot be changed without a vote of shareholders is
contained in the Statement of Additional Information under "Investment
Objectives and Policies.")

The Fund may not:

1. Purchase securities other than U.S. Treasury bills, notes and
other obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, some of which may be subject to repurchase
agreements.

2. Borrow money except from banks for temporary purposes and then in
an amount not exceeding 10% of the value of the Fund's total assets, or
mortgage, pledge or hypothecate its assets except in connection with any
such borrowing and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of the Fund's total assets at the time
of such borrowing.

6
<PAGE> 11

3. Make loans except that the Fund may purchase or hold debt
obligations in accordance with its investment objective and policies, may
enter into repurchase agreements for securities and may lend portfolio
securities against collateral consisting of cash or securities which are
consistent with the Fund's permitted investments, which is equal at all
times to at least 100% of the value of the securities loaned. There is no
investment restriction on the amount of securities that may be loaned,
except that payments received on such loans, including amounts received
during the loan on account of interest on the securities loaned, may not
(together with all non-qualifying income) exceed 10% of the Fund's annual
gross income (without offset for realized capital gains) unless, in the
opinion of counsel to the Company, such amounts are qualifying income under
federal income tax provisions applicable to regulated investment companies.

PURCHASE AND REDEMPTION OF SHARES

PURCHASE PROCEDURES

Fund shares are sold at the net asset value per share next determined after
receipt of a purchase order by PFPC, the Fund's transfer agent. Purchase orders
for shares are accepted by the Fund only on days on which both New York Stock
Exchange and the Federal Reserve Bank of Philadelphia are open for business (a
"Business Day") and must be transmitted to PFPC in Wilmington, Delaware, by
telephone (800-441-7450; in Delaware: 302-791-5350); or through the Fund's
computer access program. Orders received before 12:00 noon, Eastern time, for
which payment has been received by PNC Bank, the Fund's custodian, will be
executed at 12:00 noon. Orders received after 12:00 noon and before 2:30 P.M.,
Eastern time, (or orders received earlier in the same day for which payment has
not been received by 12:00 noon) will be executed at 4:00 P.M., Eastern time, if
payment has been received by PNC Bank by that time. Orders received at other
times, and orders for which payment has not been received by 4:00 P.M., Eastern
time, will not be accepted, and notice thereof will be given to the institution
placing the order. (Payment for orders which are not received or accepted will
be returned after prompt inquiry to the sending institution.) The Fund may in
its discretion reject any order for shares.

Payment for Fund shares may be made only in federal funds or other funds
immediately available to PNC Bank. The minimum initial investment by an
institution is $5,000; however, broker-dealers and other institutional investors
may set a higher minimum for their customers. There is no minimum subsequent
investment.

Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund on fiduciary funds that are invested in Dollar
shares. (See also "Management of the Fund--Service Organizations.")
Institutions, including banks regulated by the Comptroller of the Currency and
investment advisers and other money managers subject to the jurisdiction of the
SEC, the Department of Labor or state securities commissions, should consult
their legal advisors before investing fiduciary funds in Dollar shares. (See
also "Management of the Fund--Banking Laws.")

REDEMPTION PROCEDURES

7
<PAGE> 12

best efforts to maintain its net asset value per share at $1.00, the proceeds
paid to a shareholder upon redemption may be more or less than the amount
invested depending upon a share's net asset value at the time of redemption.

Payment for redeemed shares for which a redemption order is received by
PFPC before 12:00 noon, Eastern time, on a Business Day is normally made in
federal funds wired to the redeeming shareholder on the same day. A shareholder
of record located in the Pacific Time Zone or Mountain Time Zone may receive
redemption proceeds wired the same day in federal funds to a destination within
such time zone if its redemption order is received before 2:30 P.M., Eastern
time, or 1:30 P.M., Eastern time, respectively. Payment for other redemption
orders which are received between 12:00 noon and 4:00 P.M., Eastern time, or on
a day when PNC Bank is closed, is normally wired in federal funds on the next
day following redemption that PNC Bank is open for business.

The Fund shall have the right to redeem shares in any account if the value
of the account is less than $1,000 after sixty-days' prior written notice to the
shareholder. Any such redemption shall be effected at the net asset value per
share next determined after the redemption order is entered. If during the sixty
day period the shareholder increases the value of its account to $1,000 or more,
no such redemption shall take place. In addition, the Fund may redeem shares
involuntarily or suspend the right of redemption under certain special
circumstances described in the Statement of Additional Information under
"Additional Purchase and Redemption Information."

OTHER MATTERS

The Fund's net asset value per share for purposes of pricing purchase and
redemption orders is determined by PIMC as of 12:00 noon and 4:00 P.M., Eastern
time, on each day on which both the Federal Reserve Bank of Philadelphia and the
New York Stock Exchange are open for business. Currently, one or both of these
institutions are closed on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day (observed), Independence Day
(observed), Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and
Christmas Day (observed). The net asset value per share of each class of the
Fund is calculated by adding the value of all securities and other assets
belonging to the Fund, subtracting liabilities attributable to each class, and
dividing the result by the total number of the outstanding shares of each class.
In computing net asset value, the Fund uses the amortized cost method of
valuation as described in the Statement of Additional Information under
"Additional Purchase and Redemption Information." The Fund's net asset value per
share for purposes of pricing purchase and redemption orders is determined
independently of the net asset values of the shares of the Company's other
investment portfolios.

Fund shares are sold and redeemed without charge by the Fund. Institutional
investors purchasing or holding Fund shares for their customer accounts may
charge customers fees for cash management and other services provided in
connection with their accounts. A customer should, therefore, consider the terms
of its account with an institution before purchasing Fund shares. An institution
purchasing or redeeming shares on behalf of its customers is responsible for
transmitting orders to the Fund in accordance with its customer agreements.

8
<PAGE> 13

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES

The business and affairs of the Fund are managed under the direction of the
Company's Board of Trustees. The trustees of the Company are as follows:

Philip E. Coldwell is an economic consultant and a former Member of
the Board of Governors of the Federal Reserve System.

Robert R. Fortune is a financial consultant and former Chairman,
President and Chief Executive Officer of Associated Electric & Gas
Insurance Services Limited.

Rodney D. Johnson is President of Fairmount Capital Advisors, Inc.

G. Willing Pepper, Chairman of the Board and President of the Company,
is a retired President of Scott Paper Company.

Anthony M. Santomero is the Richard K. Mellon Professor of Finance at
The Wharton School, University of Pennsylvania.

David R. Wilmerding, Jr., Vice Chairman of the Board of the Company,
is President and Chief Executive Officer of Gates, Wilmerding, Carper &
Rawlings, Inc.

Mr. Pepper is considered by the Company to be an "interested person" of the
Company as defined in the 1940 Act.

The other officers of the Company are as follows:

Edward J. Roach is Vice President and Treasurer of the Company.

W. Bruce McConnel, III, Secretary of the Company, is a partner of the
law firm of Drinker Biddle & Reath, Philadelphia, Pennsylvania.

INVESTMENT ADVISER AND SUB-ADVISER

PIMC, a wholly owned subsidiary of PNC Asset Management Group, Inc., which
is in turn a wholly owned subsidiary of PNC Bank, serves as the Fund's
investment adviser. PIMC was organized in 1977 by PNC Bank to perform advisory
services for investment companies and has its principal offices at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PNC Asset Management Group, Inc.'s
principal business address is 1835 Market Street, Philadelphia, Pennsylvania
19102. PNC Bank serves as the Fund's sub-adviser. PNC Bank is a wholly owned,
indirect subsidiary of PNC Bank Corp., and its principal business address is
Broad and Chestnut Streets, Philadelphia, Pennsylvania 19102. PNC Bank Corp. is
a multi-bank holding company. PIMC and PNC Bank also serve as adviser and
sub-adviser, respectively, to the Company's T-Fund, FedCash, T-Cash, Federal
Trust Fund, Treasury Trust Fund and Short Government Fund portfolios.

PNC Bank Corp., headquartered in Pittsburgh, Pennsylvania, is the eleventh
largest bank holding company in the United States. Categorized as a super
regional bank holding company, PNC Bank Corp. operates over 500 branch offices
in six U.S. states.

PNC Bank's Investment Management and Trust Division, headquartered in
Philadelphia, Pennsylvania, traces its money management services to individuals
and institutions to the year 1847, and is the second largest bank manager of
investments for individuals in the U.S. with $28 billion in discretionary trust
assets under management.

9
<PAGE> 14

PNC Financial Services Group is PNC Bank Corp.'s mutual fund complex,
headquartered in Wilmington, Delaware. This group includes PIMC, PFPC, and PNC
Bank. In 1973, Provident National Bank (predecessor to PNC Bank) commenced
advising the first institutional money market mutual fund -- a U.S.
dollar-denominated constant net asset value fund -- offered in the United
States.

The PNC Financial Services Group is one of the largest U.S. bank managers
of mutual funds with assets currently under management in excess of $30 billion.
This group, through PFPC and PFPC International Ltd, is also a leading mutual
fund service provider having contractual relationships with approximately 400
mutual funds with 3.5 million shareholders and in excess of $106 billion in
assets. This group, through its PNC Institutional Investment Service, provides
investment research to some 250 financial institutions located in the United
States and abroad. PNC Bank provides custodial services for approximately $217
billion in assets, including $106 billion in mutual fund assets.

As adviser, PIMC manages the Fund's portfolio and is responsible for all
purchases and sales of the Fund's portfolio securities. PIMC also maintains the
Fund's financial accounts and records and computes the Fund's net asset value
and net income. For the advisory services provided and expenses assumed by it,
PIMC is entitled to receive a fee, computed daily and payable monthly, based on
the combined average net assets of the Fund, T-Fund, FedCash, T-Cash, Federal
Trust Fund and Treasury Trust Fund. The advisory fee is allocated among these
Funds in proportion to their relative net assets. In addition, PIMC and the
administrators have agreed to reduce the advisory and administration fees
otherwise payable to them and to reimburse the Fund for its operating expenses
to the extent necessary to ensure that its operating expense ratio (excluding
fees paid to Service Organizations pursuant to Servicing Agreements) does not
exceed .18% of the Fund's average net assets. After January 18, 1996, PIMC and
the administrators may terminate this agreement to reduce fees and limit
expenses on 120-days' written notice to the Fund. Any fees waived or expenses
reimbursed by PIMC and the administrators with respect to a particular fiscal
year are not recoverable. For the fiscal year ended October 31, 1994, the Fund
paid investment advisory fees aggregating .07% of its average net assets. Absent
fee waivers, advisory fees would have been .13% of the Fund's average daily net
assets.

As sub-adviser, PNC Bank provides research, credit analysis and
recommendations with respect to the Fund's investments, and supplies PIMC with
certain computer facilities, personnel and other services. For its sub-advisory
and other services, PNC Bank is entitled to receive from PIMC an amount equal to
75% of the advisory fee paid by the Fund to PIMC (subject to adjustment in
certain circumstances). The sub-advisory fees paid by PIMC to PNC Bank have no
effect on the advisory fees payable by the Fund to PIMC. PNC Bank also serves as
the Fund's custodian. The services provided by PNC Bank and PIMC and the fees
payable by the Fund for these services are described in the Statement of
Additional Information under "Management of the Funds."

ADMINISTRATORS

10
<PAGE> 15

Statement of Additional Information under "Management of the Funds," include
providing and supervising the operation of an automated data processing system
to process purchase and redemption orders; assisting in maintaining the Fund's
Wilmington, Delaware office; performing administrative services in connection
with the Fund's computer access program maintained to facilitate shareholder
access to the Fund; accumulating information for and coordinating the
preparation of reports to the Fund's shareholders and the SEC; and maintaining
the registration or qualification of the Fund's shares for sale under state
securities laws.

For their administrative services, the administrators are entitled jointly
to receive a fee computed daily and payable monthly, determined in the same
manner as PIMC's advisory fee described above. (For information regarding the
administrators' obligations to waive administrative fees otherwise payable to
them and to reimburse the Fund for operating expenses, see "Investment Adviser
and Sub-Adviser" above.) The Fund also reimburses each administrator for its
reasonable out-of-pocket expenses incurred in connection with the Funds'
computer access program. For the fiscal year ended October 31, 1994, the Fund
paid PFPC and PDI administration fees aggregating .07% of its average net
assets. Absent fee waivers, administration fees would have been .13% of the
Fund's average net assets.

PFPC also serves as transfer agent, registrar and dividend disbursing
agent. The transfer agent's address is P.O. Box 8950, Wilmington, Delaware
19885-9628. The services provided by PFPC and PDI and the fees payable by the
Fund for these services are described in the Statement of Additional Information
under "Management of the Funds."

DISTRIBUTOR

PDI serves as distributor of the Fund's shares. Its principal offices are
located at 259 Radnor-Chester Road, Suite 120, Radnor, Pennsylvania 19087. Fund
shares are sold on a continuous basis by the distributor as agent. The
distributor pays the cost of printing and distributing prospectuses to persons
who are not shareholders of the Fund (excluding preparation and printing
expenses necessary for continued registration of the Fund's shares) and of
printing and distributing all sales literature. No compensation is payable by
the Fund to the distributor for its distribution services.

SERVICE ORGANIZATIONS

Institutional investors, such as banks, savings and loan associations and
other financial institutions, including affiliates of PNC Bank Corp. ("Service
Organizations"), may purchase Dollar shares. FedFund Dollar shares are identical
in all respects to the Company's FedFund shares except that they bear the
service fees described below and enjoy certain exclusive voting rights on
matters relating to these fees. The Fund will enter into an agreement with each
Service Organization which purchases Dollar shares requiring it to provide
support services to its customers who are the beneficial owners of Dollar shares
in consideration of the Fund's payment of .25% (on an annualized basis) of the
average daily net assets of the Dollar shares held by the Service Organization
for the benefit of customers. Such services, which are described more fully in
the Statement of Additional Information under "Management of the Funds--Service
Organizations," include aggregating and processing purchase and redemption
requests from customers and placing net purchase and redemption orders with
PFPC; processing dividend payments from the Fund on behalf of customers;
providing information periodically to customers showing their positions in
Dollar shares; and providing sub-accounting or the information

11
<PAGE> 16

necessary for sub-accounting with respect to Dollar shares beneficially owned by
customers. Under the terms of the agreements, Service Organizations are required
to provide to their customers a schedule of any fees that they may charge to the
customers relating to the investment of the customers' assets in Dollar shares.
FedFund shares are sold to institutions that have not entered into servicing
agreements with the Fund in connection with their investments.

EXPENSES

Except as noted above and in the Statement of Additional Information under
"Management of the Funds--Custodian and Transfer Agent," the Fund's service
contractors bear all expenses in connection with the performance of their
services. Similarly, the Fund bears the expenses incurred in its operations. For
the fiscal year ended October 31, 1994, the Fund's total expenses with respect
to FedFund shares and FedFund Dollar shares were .18% and .43% (net of fee
waivers of .12% and .12%, respectively) of the average net assets of the FedFund
shares and the FedFund Dollar shares, respectively. With regard to fees paid
exclusively by Dollar shares, see "Service Organizations" above.

BANKING LAWS

Banking laws and regulations presently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing or controlling a
registered, open-end investment company engaged continuously in the issuance of
its shares, and prohibit banks generally from issuing, underwriting, selling or
distributing securities such as Fund shares. Such banking laws and regulations
do not prohibit such a holding company or affiliate or banks generally from
acting as investment adviser, transfer agent or custodian to such an investment
company, or from purchasing shares of such a company for or upon the order of
customers. PNC Bank, PIMC and PFPC, as well as some Service Organizations, are
subject to such banking laws and regulations, but believe they may perform the
services for the Fund contemplated by their respective agreements, this
Prospectus and Statement of Additional Information without violating applicable
banking laws or regulations.

Should future legislative, judicial or administrative action prohibit or
restrict the activities of bank Service Organizations in connection with the
provision of support services to their customers, the Fund might be required to
alter or discontinue its arrangements with Service Organizations and change its
method of operations with respect to Dollar shares. It is not anticipated,
however, that any change in the Fund's method of operations would affect its net
asset value per share or result in a financial loss to any customer.

DIVIDENDS

12
<PAGE> 17

Dividends are determined in the same manner for each share of the Fund.
Dollar shares bear all the expense of fees paid to Service Organizations. As a
result, at any given time, the net yield on FedFund Dollar shares is
approximately .25% lower than the net yield on FedFund shares.

Institutional shareholders may elect to have their dividends reinvested in
additional full and fractional shares of the same class of shares to which such
dividends are declared at the net asset value of such shares on the payment
date. Reinvested dividends receive the same tax treatment as dividends paid in
cash. Such election, or any revocation thereof, must be made in writing to PFPC
at P.O. Box 8950, Wilmington, Delaware 19885-9628, and will become effective
after its receipt by PFPC with respect to dividends paid.

PFPC, as transfer agent, will send each Fund shareholder or its authorized
representative an annual statement designating the amount, if any, of any
dividends and distributions made during each year and their federal tax
qualification.

TAXES

The Fund qualified in its last taxable year and intends to qualify in
future years as a "regulated investment company" under the Internal Revenue Code
of 1986, as amended (the "Code"). A regulated investment company is generally
exempt from federal income tax on amounts distributed to its shareholders.

Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Fund distribute to its
shareholders at least 90% of its investment company taxable income for such
year. In general, the Fund's investment company taxable income will be its
taxable income (including interest and short-term capital gains, if any),
subject to certain adjustments and excluding the excess of any net long-term
capital gain for the taxable year over the net short-term capital loss, if any,
for such year. The Fund intends to distribute substantially all of its
investment company taxable income each year. Such distributions will be taxable
as ordinary income to the Fund's shareholders that are not currently exempt from
federal income taxes, whether such income is received in cash or reinvested in
additional shares. (Federal income taxes for distributions to an IRA or a
qualified retirement plan are deferred under the Code.) It is anticipated that
none of the Fund's distributions will be eligible for the dividends received
deduction for corporations. The Fund does not expect to realize long-term
capital gains and therefore does not expect to distribute any "capital gain
dividends," as described in the Code.

Dividends declared in October, November or December of any year payable to
shareholders of record on a specified date in such months will be deemed to have
been received by the shareholders and paid by the Fund on December 31 of such
year, in the event such dividends are actually paid during January of the
following year.

The foregoing is only a brief summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders. As indicated
above, IRAs receive special tax treatment. No attempt is made to present a
detailed explanation of the federal, state or local income tax treatment of the
Fund or its shareholders, and this discussion is not intended as a substitute
for careful tax planning. Accordingly, potential investors in the Fund should
consult their tax advisors with specific reference to their own tax situations.

13
<PAGE> 18

YIELDS

From time to time, in advertisements or in reports to shareholders,
"yields" and "effective yields" for FedFund shares and FedFund Dollar shares may
be quoted. Yield quotations are computed separately for FedFund shares and
FedFund Dollar shares. The "yield" quoted in advertisements for a particular
class or sub-class of Fund shares refers to the income generated by an
investment in such shares over a specified period (such as a seven-day period)
identified in the advertisement. This income is then "annualized." That is, the
amount of income generated by the investment during that period is assumed to be
generated for each such period over a 52-week or one-year period and is shown as
a percentage of the investment. The "effective-yield" is calculated similarly
but, when annualized, the income earned by an investment in a particular class
or sub-class is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment.

The Fund's yields may be compared to those of other mutual funds with
similar objectives, to stock or other relevant indices, or to rankings prepared
by independent services or other financial or industry publications that monitor
the performance of mutual funds. For example, such data are reported in national
financial publications such as IBC/Donoghue's Money Fund Report(R), The Wall
Street Journal, and The New York Times, reports prepared by Lipper Analytical
Services, Inc., and publications of a local or regional nature.

The Fund's yield figures for FedFund shares and FedFund Dollar shares
represent the Fund's past performance, will fluctuate, and should not be
considered as representative of future results. The yield of any investment is
generally a function of portfolio quality and maturity, type of investment and
operating expenses. Any fees charged by Service Organizations or other
institutional investors directly to their customers in connection with
investments in Fund shares are not reflected in the Fund's yield calculations;
and, such fees, if charged, would reduce the actual return received by customers
on their investments. The methods used to compute the Fund's yields are
described in more detail in the Statement of Additional Information. Investors
may call 800-821-6006 (FedFund shares code: 30; FedFund Dollar shares code: 31)
to obtain current-yield information.

DESCRIPTION OF SHARES AND MISCELLANEOUS

The Company is a Pennsylvania business trust established on May 14, 1975.
Effective March 2, 1987, the Company's name was changed from Trust for
Short-Term Federal Securities to Trust for Federal Securities. The Company
commenced operations of the Fund in October, 1975.

The Company's Declaration of Trust authorizes the Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
in the Company and to classify or reclassify any unissued shares into one or
more additional classes of shares. Pursuant to such authority, the Board of
Trustees has authorized the issuance of fourteen classes of shares designated as
FedFund, FedFund Dollar, T-Fund, T-Fund Dollar, FedCash, FedCash Dollar, T-Cash,
T-Cash Dollar, Federal Trust, Federal Trust Dollar, Treasury Trust, Treasury
Trust Dollar, Short Government and Short Government Dollar. The Declaration of
Trust further authorizes the trustees to classify or reclassify any class of
shares into one or more sub-classes.

14
<PAGE> 19

THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO THE FUND AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE
AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS RELATING TO THE FUND.
INVESTORS WISHING TO OBTAIN SIMILAR INFORMATION REGARDING THE COMPANY'S T-FUND,
FEDCASH, T-CASH, FEDERAL TRUST FUND, TREASURY TRUST FUND, AND SHORT GOVERNMENT
FUND PORTFOLIOS MAY OBTAIN SEPARATE PROSPECTUSES DESCRIBING THOSE PORTFOLIOS BY
CALLING THE DISTRIBUTOR AT 800-998-7633.

The Company does not presently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Company will call a meeting of shareholders for the purpose of voting upon the
question of removal of a member of the Board of Trustees upon written request of
shareholders owning at least 10% of the outstanding shares of the Company
entitled to vote.

Each FedFund share and FedFund Dollar share represents an equal
proportionate interest in the assets belonging to the Fund. Each share is
without par value and has no preemptive or conversion rights. When issued for
payment as described in this Prospectus, shares will be fully paid and
non-assessable.

Holders of the Company's FedFund shares and FedFund Dollar shares will vote
in the aggregate and not by class or sub-class on all matters, except where
otherwise required by law and except that only Dollar shares will be entitled to
vote on matters submitted to a vote of shareholders pertaining to the Fund's
arrangements with Service Organizations. Further, shareholders of all of the
Company's portfolios will vote in the aggregate and not by portfolio except as
otherwise required by law or when the Board of Trustees determines that the
matter to be voted upon affects only the interests of the shareholders of a
particular portfolio. (See the Statement of Additional Information under
"Additional Description Concerning Fund Shares" for examples where the 1940 Act
requires voting by portfolio.) Shareholders of the Company are entitled to one
vote for each full share held (irrespective of class, sub-class, or portfolio)
and fractional votes for fractional shares held. Voting rights are not
cumulative and, accordingly, the holders of more than 50% of the aggregate
shares of the Company may elect all of the trustees.

For information concerning the redemption of Fund shares and possible
restrictions on their transferability, see "Purchase and Redemption of Shares."

As stated above, the Company is organized as a trust under the laws of the
Commonwealth of Pennsylvania. Shareholders of such a trust may, under certain
circumstances, be held personally liable (as if they were partners) for the
obligations of the trust. The Company's Declaration of Trust provides for
indemnification out of the trust property of any shareholder of the Fund held
personally liable solely by reason of being or having been a shareholder and not
because of any acts or omissions or some other reason.

15
<PAGE> 20

- ------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS, OR IN THE FUND'S STATEMENT
OF ADDITIONAL INFORMATION INCORPORATED
HEREIN BY REFERENCE, IN CONNECTION WITH
THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ITS DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING BY THE COMPANY OR BY THE
DISTRIBUTOR IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE.

----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Background and Expense
Information.................. 2
Financial Highlights........... 3
Investment Objective and
Policies..................... 5
Purchase and Redemption of
Shares....................... 7
Management of the Fund......... 9
Dividends...................... 12
Taxes.......................... 13
Yields......................... 13
Description of Shares and
Miscellaneous................ 14
</TABLE>

PIF-P-003-02

FED FUND

AN INVESTMENT PORTFOLIO
OFFERED BY
TRUST FOR FEDERAL SECURITIES

[LOGO]

Prospectus

February 28, 1995

- ------------------------------------------------------

<PAGE> 21
TRUST FOR FEDERAL SECURITIES
(T-Fund Portfolio)
Cross Reference Sheet

<TABLE>
<CAPTION>
Form N-1A Item Prospectus Caption
-------------- ------------------

<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page

2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Background and Expense Information

3. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . Financial Highlights; Yields

4. General Description of
Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page; Financial Highlights;
Investment Objective and Policies

5. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . Management of the Fund; Dividends

6. Capital Stock and Other
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover Page; Financial Highlights;
Dividends; Taxes; Description of
Shares and Miscellaneous

7. Purchase of Securities Being
Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management of the Fund; Purchase and
Redemption of Shares

8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . Purchase and Redemption of Shares

9. Pending Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
</TABLE>
<PAGE> 22

T-Fund
An Investment Portfolio Offered By
Trust for Federal Securities

<TABLE>
<S> <C>
Bellevue Park Corporate Center For purchase and redemption orders only call:
400 Bellevue Parkway 800-441-7450 (in Delaware: 302-791-5350).
Suite 100 For yield information call: 800-821-6006
Wilmington, DE 19809 (T-Fund shares code: 60; T-Fund Dollar shares
code: 61).
For other information call: 800-821-7432.
</TABLE>

Trust for Federal Securities (the "Company") is a no-load, diversified,
open-end investment company that currently offers shares in seven separate
investment portfolios. The shares described in this Prospectus represent
interests in the T-Fund portfolio (the "Fund"), a money market portfolio.

The Fund's investment objective is to seek current income with liquidity
and security of principal. The Fund invests in a portfolio consisting of U.S.
Treasury bills, notes and direct obligations of the U.S. Treasury and repurchase
agreements relating to direct Treasury obligations.

Fund shares may not be purchased by individuals directly, but institutional
investors may purchase shares for accounts maintained by individuals. In
addition to T-Fund shares, investors may purchase T-Fund "Dollar" shares which
accrue daily dividends in the same manner as T-Fund shares but bear all fees
payable by the Fund to institutional investors for certain services they provide
to the beneficial owners of such shares. (See "Management of the Fund--Service
Organizations.")

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED, ENDORSED,
OR OTHERWISE SUPPORTED BY PNC BANK CORP. OR ITS AFFILIATES, OR THE U.S.
GOVERNMENT, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. AN INVESTMENT IN THE FUND INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THERE CAN BE NO ASSURANCE THAT IT WILL BE
ABLE TO MAINTAIN ITS NET ASSET VALUE
OF $1.00 PER SHARE.

------------------------

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.

------------------------

February 28, 1995

<PAGE> 23

BACKGROUND AND EXPENSE INFORMATION

Two classes of shares are offered by this Prospectus: T-Fund shares and
T-Fund Dollar shares. Shares of each class represent equal, pro rata interests
in the Fund and accrue daily dividends in the same manner except that the Dollar
shares bear fees payable by the Fund (at the rate of .25% per annum) to
institutional investors for services they provide to the beneficial owners of
such shares. (See "Management of the Fund -- Service Organizations.")

EXPENSE SUMMARY

<TABLE>
<CAPTION>
T-FUND
T-FUND DOLLAR
SHARES SHARES
------------ ------------
<S> <C> <C> <C> <C>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
- ----------------------------------------------------------------
(as a percentage of average net assets)
Management Fees (net of waivers)........................... .07% .07%
Other Expenses............................................. .11% .36%
Administration Fees (net of waivers).................. .07% .07%
Shareholder Servicing Fees............................ 0% .25%
Miscellaneous......................................... .04% .04%
--- ---
Total Fund Operating Expenses (net of waivers)............. .18% .43%
=== ===
</TABLE>

- ------------

<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
investment, assuming (1) a 5% annual return and
(2) redemption at the end of each time period with
respect to the following shares:
T-Fund shares: $2 $ 6 $10 $23
T-Fund Dollar shares: $4 $14 $24 $54
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATE OF RETURN. ACTUAL EXPENSES AND RATE OF RETURN MAY BE GREATER OR
LESSER THAN THOSE SHOWN.

The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. In addition, institutional investors may charge
fees for providing shareholder administrative services in connection with their
customers' investment in T-Fund Dollar shares. (For more complete descriptions
of the various costs and expenses, see "Management of the Fund" in this
Prospectus and the Statement of Additional Information and the financial
statements and related notes contained in the Statement of Additional
Information.) The investment adviser and administrators have waived advisory and
administration fees or have reimbursed the Fund for some or all of its operating
expenses pursuant to an agreement that extends to January 18, 1996. The
foregoing table gives effect to this agreement. It is anticipated that they may
continue to do so on a voluntary basis thereafter. Absent fee waivers for the
fiscal year ended October 31, 1994, the estimated "Total Fund Operating
Expenses" for T-Fund Shares and T-Fund Dollar Shares would have been .29% and
.54%, respectively, of the average net assets of the T-Fund portfolio. The
foregoing table has not been audited by the Fund's independent accountants.

2
<PAGE> 24

FINANCIAL HIGHLIGHTS

The following financial highlights for T-Fund Shares have been derived from
the financial statements of the Fund for the fiscal year ended October 31, 1994,
and for each of the nine preceding fiscal years, and for T-Fund Dollar Shares
for the fiscal year ended October 31, 1994 and for each of the seven preceding
fiscal years and the fiscal period ended October 31, 1986 (commencement of Fund
operations). The financial highlights for the fiscal years set forth below have
been audited by Coopers & Lybrand L.L.P. independent accountants whose report on
the financial statements and financial highlights (for the most recent five
years) of the Fund is included in the Statement of Additional Information. The
tables should be read in conjunction with the financial statements and related
notes included in the Statement of Additional Information. Further information
about the performance of the Fund is available in the annual report to
shareholders, which may be obtained without charge by calling 800-821-7432.

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)

T-FUND SHARES

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income From Investment Operations:
Net Investment Income................. .0368 .0303 .0392 .0626 .0799 .0880 .0692
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total From Investment Operations...... .0368 .0303 .0392 .0626 .0799 .0880 .0692
---------- ---------- ---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income............... (.0368) (.0303) (.0392) (.0626) (.0799) (.0880) (.0692)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Distributions................. (.0368) (.0303) (.0392) (.0626) (.0799) (.0880) (.0692)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= ========= =========
Total Return............................ 3.75% 3.07% 3.99% 6.44% 8.29% 9.17% 7.14%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s)... $1,035,172 $1,361,624 $1,327,743 $1,592,750 $1,497,476 $1,422,788 $1,793,479
Ratio of Expenses to Average Net
Assets.............................. .18%(1) .20%(1) .28% .30% .30%(1) .30%(1) .30%(1)
Ratio of Net Investment Income to
Average Net Assets.................. 3.65% 3.03% 3.93% 6.26% 7.99% 8.80% 6.91%

<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------
1987 1986 1985
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....$ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Income From Investment Operations:
Net Investment Income................. .0606 .0676 .0807
---------- ---------- ----------
Total From Investment Operations...... .0606 .0676 .0807
---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income............... (.0606) (.0676) (.0807)
---------- ---------- ----------
Total Distributions................. (.0606) (.0676) (.0807)
---------- ---------- ----------
Net Asset Value, End of Period..........$ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total Return............................ 6.23% 6.97% 8.38%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s)...$1,737,258 $1,680,120 $1,302,428
Ratio of Expenses to Average Net
Assets.............................. .30%(1) .33% .35%
Ratio of Net Investment Income to
Average Net Assets.................. 6.05% 6.72% 8.06%
</TABLE>

- ------------

(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .29%, .28%, .34%, .35%,
.33%, and .33%, respectively, for each of the years ended October 31, 1994,
1993, 1990, 1989, 1988 and 1987, respectively, for T-Fund shares.

3
<PAGE> 25

TRUST FOR FEDERAL SECURITIES

Financial Highlights
(For a Share Outstanding Throughout Each Period)

T-FUND DOLLAR SHARES

<TABLE>
<CAPTION>
T-FUND DOLLAR SHARES
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1994 1993 1992 1991 1990 1989
------- ------- ------- ------- ------- -------
<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....................................... .0343 .0278 .0367 .0601 .0774 .0855
------- ------- ------- ------- ------- -------
Total From Investment Operations............................ .0343 .0278 .0367 .0601 .0774 .0855
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income....................................... (.0343) (.0278) (.0367) (.0601) (.0774) (.0855)
------- ------- ------- ------- ------- -------
Total Distributions......................................... (.0343) (.0278) (.0367) (.0601) (.0774) (.0855)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period............................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total Return................................................ 3.50% 2.82% 3.74% 6.19% 8.04% 8.92%
Ratios/Supplemental Data
Net Assets, End of Period
(in 000s)................................................. $22,195 $13,328 $ 4,915 $40,372 $27,116 $42,439
Ratio of Expenses to Average Net Assets..................... .43%(1) .45% .53% .55% .55%(1) .55%(1)
Ratio of Net Investment Income to Average Net Assets........ 3.40% 2.78% 3.68% 6.01% 7.74% 8.55%

T-FUND DOLLAR SHARES
YEAR ENDED OCTOBER 31, JANUARY 6, 1986
---------------------- TO
1988 1987 OCTOBER 31, 1986
------- ------- -----------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period......................... $ 1.00 $ 1.00 $ 1.00
------- ------- -------
Income From Investment Operations:
Net Investment Income....................................... .0667 .0581 .0520
------- ------- -------
Total From Investment Operations............................ .0667 .0581 .0520
------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income....................................... (.0667) (.0581) (.0520)
------- ------- -------
Total Distributions......................................... (.0667) (.0581) (.0520)
------- ------- -------
Net Asset Value, End of Period............................... $ 1.00 $ 1.00 $ 1.00
======== ======== =======
Total Return................................................ 6.89% 5.98% 5.32%
Ratios/Supplemental Data
Net Assets, End of Period
(in 000s)................................................. $52,083 $30,686 $ 4,259
Ratio of Expenses to Average Net Assets..................... .55%(1) .55%(1) .58%(2)
Ratio of Net Investment Income to Average Net Assets........ 6.66% 5.80% 6.27%(2)
</TABLE>

- ---------------

(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets would have been .54%, .53%, .59%,
.60%, .58% and .58%, respectively, for each of the years ended October 31,
1994, 1993, 1990, 1989, 1988 and 1987 for T-Fund Dollar shares.

(2) Annualized.

4
<PAGE> 26

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to seek current income with liquidity
and security of principal. The Fund invests solely in direct obligations of the
U.S. Treasury, such as Treasury bills and notes and repurchase agreements
relating to direct Treasury obligations. Portfolio securities held by the Fund
have remaining maturities of 397 days (thirteen months) or less (with certain
exceptions), subject to the quality, diversification, and other requirements of
Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act")
and other rules of the Securities and Exchange Commission (the "SEC").

Securities issued or guaranteed by the U.S. Government have historically
involved little risk of loss of principal if held to maturity. However, due to
fluctuations in interest rates, the market value of such securities may vary
during the period a shareholder owns shares of the Fund. Certain government
securities held by the Fund may have remaining maturities exceeding thirteen
months if such securities provide for adjustments in their interest rates not
less frequently than every thirteen months. To the extent consistent with its
investment objectives, the Fund may invest in Treasury receipts and other
"stripped" securities issued or guaranteed by the U.S. Government, where the
principal and interest components are traded independently under the Separate
Trading of Registered Interest and Principal of Securities program ("STRIPS").
Under the STRIPS program, the principal and interest components are individually
numbered and separately issued by the U.S. Treasury at the request of depository
financial institutions, which then trade the component parts independently.
Currently, the Fund only invests in "stripped" securities issued or guaranteed
by the U.S. Government which are registered under the STRIPS program.

5
<PAGE> 27

changes in value based upon changes in the general level of interest rates. The
Fund expects that commitments to purchase when-issued securities will not exceed
25% of the value of its total assets absent unusual market conditions. The Fund
does not intend to purchase when-issued securities for speculative purposes but
only in furtherance of its investment objective.

INVESTMENT LIMITATIONS

The Fund may not:

1. Purchase securities other than direct obligations of the U.S. Treasury
such as Treasury bills and notes, some of which may be subject to repurchase
agreements.

2. Borrow money except from banks for temporary purposes and then in an
amount not exceeding 10% of the value of the Fund's total assets, or mortgage,
pledge or hypothecate its assets except in connection with any such borrowing
and in amounts not in excess of the lesser of the dollar amounts borrowed or 10%
of the value of the Fund's total assets at the time of such borrowing.

3. Make loans except that the Fund may purchase or hold debt obligations in
accordance with its investment objective and policies, may enter into repurchase
agreements for securities and may lend portfolio securities against collateral
consisting of cash or securities which are consistent with the Fund's permitted
investments, which is equal at all times to at least 100% of the value of the
securities loaned. There is no investment restriction on the amount of
securities that may be loaned, except that payments received on such loans,
including amounts received during the loan on account of interest on the
securities loaned, may not (together with all non-qualifying income) exceed 10%
of the Fund's annual gross income (without offset for realized capital gains)
unless, in the opinion of counsel to the Company, such amounts are qualifying
income under federal income tax provisions applicable to regulated investment
companies.

6
<PAGE> 28

PURCHASE AND REDEMPTION OF SHARES

PURCHASE PROCEDURES

Fund shares are sold at the net asset value per share next determined after
receipt of a purchase order by PFPC, the Fund's transfer agent. Purchase orders
for shares are accepted by the Fund only on days on which both the New York
Stock Exchange and the Federal Reserve Bank of Philadelphia, are open for
business (a "Business Day") and must be transmitted to PFPC in Wilmington,
Delaware, by telephone (800-441-7450; in Delaware: 302-791-5350); or through the
Fund's computer access program. Orders received before 12:00 noon, Eastern time,
for which payment has been received by PNC Bank the Fund's custodian will be
executed at 12:00 noon. Orders received after 12:00 noon and before 2:30 P.M.,
Eastern time, (or orders received earlier in the same day for which payment has
not been received by 12:00 noon) will be executed at 4:00 P.M., Eastern time, if
payment has been received by PNC Bank by that time. Orders received at other
times, and orders for which payment has not been received by 4:00 P.M., Eastern
time, will not be accepted, and notice thereof will be given to the institution
placing the order. (Payment for orders which are not received or accepted will
be returned after prompt inquiry to the sending institution.) The Fund may in
its discretion reject any order for shares.

Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund on fiduciary funds that are invested in Dollar
shares. (See also "Management of the Fund -- Service Organizations.")
Institutions, including banks regulated by the Comptroller of the Currency and
investment advisers and other money managers subject to the jurisdiction of the
SEC, the Department of Labor or state securities commissions, should consult
their legal advisors before investing fiduciary funds in Dollar shares. (See
also "Management of the Fund -- Banking Laws.")

REDEMPTION PROCEDURES

Redemption orders must be transmitted to PFPC in Wilmington, Delaware, in
the manner described under "Purchase Procedures." Shares are redeemed at the net
asset value per share next determined after PFPC's receipt of the redemption
order. While the Fund intends to use its best efforts to maintain its net asset
value per share at $1.00, the proceeds paid to a shareholder upon redemption may
be more or less than the amount invested depending upon a share's net asset
value at the time of redemption.

Payment for redeemed shares for which a redemption order is received by
PFPC before 12:00 noon, Eastern time, on a Business Day is normally made in
federal funds wired to the redeeming shareholder on the same business day. A
shareholder of record located in the Pacific Time Zone or Mountain Time Zone may
receive redemption proceeds wired the same day in federal funds to a destination
within such time zone if its redemption order is received before 2:30 P.M.,
Eastern time, or 1:30 P.M., Eastern time, respectively. Payment for other
redemption orders which are received between 12:00 noon and 4:00 P.M., Eastern
time, or on a day when PNC

7
<PAGE> 29

Bank is closed, is normally wired in federal funds on the next day following
redemption that PNC Bank is open for business.

OTHER MATTERS

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES

The business and affairs of the Fund are managed under the direction of the
Company's Board of Trustees. The trustees of the Company are as follows:

Philip E. Coldwell is an economic consultant and a former Member of
the Board of Governors of the Federal Reserve System.

Robert R. Fortune is a financial consultant and former Chairman,
President and Chief Executive Officer of Associated Electric & Gas
Insurance Services Limited.

8
<PAGE> 30

Rodney D. Johnson is President of Fairmount Capital Advisors, Inc.

G. Willing Pepper, Chairman of the Board and President of the Company,
is a retired President of Scott Paper Company.

Anthony M. Santomero is the Richard K. Mellon Professor of Finance at
The Wharton School, University of Pennsylvania.

David R. Wilmerding, Jr., Vice Chairman of the Board of the Company,
is President and Chief Executive Officer of Gates, Wilmerding, Carper &
Rawlings, Inc.

Mr. Pepper is considered by the Company to be an "interested person" of the
Company as defined in the 1940 Act.

The other officers of the Company are as follows:

Edward J. Roach is Vice President and Treasurer of the Company.

W. Bruce McConnel, III, Secretary of the Company, is a partner of the
law firm of Drinker Biddle & Reath, Philadelphia, Pennsylvania.

INVESTMENT ADVISER AND SUB-ADVISER

PIMC, a wholly owned subsidiary of PNC Asset Management Group, Inc., which
is in turn a wholly owned subsidiary of PNC Bank, serves as the Fund's
investment adviser. PIMC was organized in 1977 by PNC Bank to perform advisory
services for investment companies and has its principal offices at 400 Bellevue
Parkway, Wilmington, Delaware 19809. PNC Asset Management Group, Inc.'s
principal business address is 1835 Market Street, Philadelphia, Pennsylvania
19102. PNC Bank serves as the Fund's sub-adviser. PNC Bank is a wholly owned,
indirect subsidiary of PNC Bank Corp. and its principal business address is
Broad and Chestnut Streets, Philadelphia, Pennsylvania 19102. PNC Bank Corp. is
a multi-bank holding company. PIMC and PNC Bank also serve as adviser and
sub-adviser, respectively, to the Company's FedFund, FedCash, T-Cash, Federal
Trust Fund, Treasury Trust Fund and Short Government Fund portfolios.

PNC Financial Services Group is PNC Bank Corp.'s mutual fund complex,
headquartered in Wilmington, Delaware. This group includes PIMC, PFPC and PNC
Bank. In 1973, Provident National Bank (predecessor to PNC Bank) commenced
advising the first institutional money market mutual fund -- a U.S.
dollar-denominated constant net asset value fund -- offered in the United
States.

9
<PAGE> 31

relationships with approximately 400 mutual funds with 3.5 million shareholders
and in excess of $106 billion in assets. This group, through its PNC
Institutional Investment Service, provides investment research to some 250
financial institutions located in the United States and abroad.. PNC Bank
provides custodial services for approximately $217 billion in assets, including
$106 billion in mutual fund assets.

As adviser, PIMC manages the Fund's portfolio and is responsible for all
purchases and sales of the Fund's portfolio securities. PIMC also maintains the
Fund's financial accounts and records and computes the Fund's net asset value
and net income. For the advisory services provided and expenses assumed by it,
PIMC is entitled to receive a fee, computed daily and payable monthly, based on
the combined average net assets of the Fund, FedFund, FedCash, T-Cash, Federal
Trust Fund and Treasury Trust Fund. The advisory fee is allocated among these
funds in proportion to their relative net assets. In addition, PIMC and the
administrators have agreed to reduce the advisory and administration fees
otherwise payable to them and to reimburse the Fund for its operating expenses
to the extent necessary to ensure that its operating expense ratio (excluding
fees paid to Service Organizations pursuant to Servicing Agreements) does not
exceed .18% of the Fund's average net assets. After January 18, 1996, PIMC and
the administrators may terminate this agreement to reduce fees and limit
expenses on 120-days' written notice to the Fund. Any fees waived by PIMC with
respect to a particular fiscal year are not recoverable. For the fiscal year
ended October 31, 1994, the Fund paid investment advisory fees aggregating .07%
of its average net assets. Absent fee waivers, the advisory fees would have been
.13% of the Fund's average daily net assets.

ADMINISTRATOR

PFPC, whose principal business address is 400 Bellevue Parkway, Wilmington,
Delaware 19809, and PDI whose principal business address is 259 Radnor-Chester
Road, Suite 120, Radnor, Pennsylvania 19087, serve as co-administrators. PFPC is
an indirect wholly-owned subsidiary of PNC Bank Corp. A majority of the
outstanding stock of PDI is owned by its officers. The administrative services
provided by the administrators, which are described more fully in the Statement
of Additional Information under "Management of the Funds," include providing and
supervising the operation of an automated data processing system to process
purchase and redemption orders; assisting in maintaining the Fund's Wilmington,
Delaware office; performing administrative services in connection with the
Fund's computer access program maintained to facilitate shareholder access to
the Fund; accumulating information for and coordinating the preparation of
reports to the Fund's shareholders and the SEC; and maintaining the registration
or qualification of the Fund's shares for sale under state securities laws.

10
<PAGE> 32

DISTRIBUTOR

PDI serves as distributor of the Fund's shares. Its principal offices are
located at 259 Radnor-Chester Road, Suite 120, Radnor, Pennsylvania 19087. Fund
shares are sold on a continuous basis by the distributor as agent. The
distributor pays the cost of printing and distributing prospectuses to persons
who are not shareholders of the Fund (excluding preparation and printing
expenses necessary for the continued registration of the Fund's shares) and of
printing and distributing all sales literature. No compensation is payable by
the Fund to the distributor for its distribution services.

SERVICE ORGANIZATIONS

Institutional investors, such as banks, savings and loan associations and
other financial institutions, including affiliates of PNC Bank Corp. ("Service
Organizations"), may purchase Dollar shares. T-Fund Dollar shares are identical
in all respects to the Company's T-Fund shares except that they bear the service
fees described below and enjoy certain exclusive voting rights on matters
relating to these fees. The Fund will enter into an agreement with each Service
Organization which purchases Dollar shares requiring it to provide support
services to its customers who are the beneficial owners of Dollar shares in
consideration of the Fund's payment of .25% (on an annualized basis) of the
average daily net assets of the Dollar shares held by the Service Organization
for the benefit of customers. Such services, which are described more fully in
the Statement of Additional Information under "Management of the Funds--Service
Organizations," include aggregating and processing purchase and redemption
requests from customers and placing net purchase and redemption orders with
PFPC; processing dividend payments from the Fund on behalf of customers;
providing information periodically to customers showing their positions in
Dollar shares; and providing sub-accounting or the information necessary for
sub-accounting with respect to Dollar shares beneficially owned by customers.
Under the terms of the agreements, Service Organizations are required to provide
to their customers a schedule of any fees that they may charge to the customers
relating to the investment of the customers' assets in Dollar shares. T-Fund
shares are sold to institutions that have not entered into servicing agreements
with the Fund in connection with their investments.

11
<PAGE> 33

EXPENSES

Except as noted above and in the Statement of Additional Information under
"Management of the Funds--Custodian and Transfer Agent," the Fund's service
contractors bear all expenses in connection with the performance of their
services. Similarly, the Fund bears the expenses incurred in its operations. For
the fiscal year ended October 31, 1994, the Fund's total expenses with respect
to T-Fund shares and T-Fund Dollar shares were .18% and .43% net of waivers of
.12% and .12%, respectively of the average net assets of the T-Fund shares and
the T-Fund Dollar shares respectively. With regard to fees paid exclusively by
Dollar shares, see "Service Organizations" above.

BANKING LAWS

DIVIDENDS

Dividends are determined in the same manner for each share of the Fund.
Dollar shares bear all the expense of fees paid to Service Organizations. As a
result, at any given time, the net yield on T-Fund Dollar shares is
approximately .25% lower than the net yield on T-Fund shares.

12
<PAGE> 34

Institutional shareholders may elect to have their dividends reinvested in
additional full and fractional shares of the same class of shares with respect
to which such dividends are declared at the net asset value of such shares on
the payment date. Reinvested dividends receive the same tax treatment as
dividends paid in cash. Such election, or any revocation thereof, must be made
in writing to PFPC at P.O. Box 8950, Wilmington, Delaware 19885-9628, and will
become effective after its receipt by PFPC with respect to dividends paid.

TAXES

YIELDS

From time to time, in advertisements or reports to Shareholders, "yields"
and "effective yields" for T-Fund shares and T-Fund Dollar shares may be quoted.
Yield quotations are

13
<PAGE> 35

computed separately for T-Fund and T-Fund Dollar Shares. The "yield" quoted in
advertisements for a particular class or sub-class of Fund shares refers to the
income generated by an investment in such shares over a specified period (such
as a seven-day period) identified in the advertisement. This income is then
"annualized." That is, the amount of income generated by the investment during
that period is assumed to be generated for each such period over a 52-week or
one year period and is shown as a percentage of the investment. The "effective
yield" is calculated similarly but, when annualized, the income earned by an
investment in a particular class or sub-class of Fund shares is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.

The Fund's yield figures for T-Fund shares and T-Fund Dollar shares
represent the Fund's past performance, will fluctuate, and should not be
considered as representative of future results. The yield of any investment is
generally a function of portfolio quality and maturity, type of investment and
operating expenses. Any fees charged by Service Organizations or other
institutional investors directly to their customers in connection with
investments in Fund shares are not reflected in the Fund's yield calculations;
and, such fees, if charged, would reduce the actual return received by customers
on their investments. The methods used to compute the Fund's yields are
described in more detail in the Statement of Additional Information. Investors
may call 800-821-6006 (T-Fund shares code 60: T-Fund Dollar shares code: 61) to
obtain current-yield information.

DESCRIPTION OF SHARES AND MISCELLANEOUS

14
<PAGE> 36

TRUST FUND, TREASURY TRUST FUND, AND SHORT GOVERNMENT FUND PORTFOLIOS MAY OBTAIN
SEPARATE PROSPECTUSES DESCRIBING THOSE PORTFOLIOS BY CALLING THE DISTRIBUTOR AT
800-998-7633.

Each T-Fund share and T-Fund Dollar share represents an equal proportionate
interest in the assets belonging to the Fund. Each share is without par value
and has no preemptive or conversion rights. When issued for payment as described
in this Prospectus, shares will be fully paid and non-assessable.

Holders of the Company's T-Fund shares and T-Fund Dollar shares will vote
in the aggregate and not by class or sub-class on all matters, except where
otherwise required by law and except that only Dollar shares will be entitled to
vote on matters submitted to a vote of shareholders pertaining to the Fund's
arrangements with Service Organizations. Further, shareholders of all of the
Company's portfolios will vote in the aggregate and not by portfolio except as
otherwise required by law or when the Board of Trustees determines that the
matter to be voted upon affects only the interests of the shareholders of a
particular portfolio. (See the Statement of Additional Information under
"Additional Description Concerning Fund Shares" for examples where the 1940 Act
requires voting by portfolio.) Shareholders of the Company are entitled to one
vote for each full share held (irrespective of class, sub-class, or portfolio)
and fractional votes for fractional shares held. Voting rights are not
cumulative and, accordingly, the holders of more than 50% of the aggregate
shares of the Company may elect all of the trustees.

For information concerning the redemption of Fund shares and possible
restrictions on their transferability, see "Purchase and Redemption of Shares."

15
<PAGE> 37

- ----------------------------------------------

-----------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Background and Expense
Information.................. 2
Financial Highlights........... 3
Investment Objective and
Policies..................... 5
Purchase and Redemption of
Shares....................... 7
Management of the Fund......... 8
Dividends...................... 12
Taxes.......................... 13

Yields......................... 13
Description of Shares and
Miscellaneous................ 14
</TABLE>

PIF-P-006-02

T-FUND

AN INVESTMENT PORTFOLIO
OFFERED BY
TRUST FOR FEDERAL SECURITIES

[LOGO]

Prospectus

February 28, 1995

- ----------------------------------------------
<PAGE> 38

FEDFUND AND T-FUND

Investment Portfolios Offered By
Trust for Federal Securities

Statement of Additional Information
February 28, 1995

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

MANAGEMENT OF THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ADDITIONAL YIELD INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ADDITIONAL DESCRIPTION CONCERNING FUND SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS-1
</TABLE>

This Statement of Additional Information is meant to be read
in conjunction with the Prospectuses for FedFund and T-Fund dated February 28,
1995 and is incorporated by reference in its entirety into those Prospectuses.
Because this Statement of Additional Information is not itself a prospectus, no
investment in shares of FedFund or T-Fund should be made solely upon the
information contained herein. Copies of the Prospectuses for FedFund and
T-Fund may be obtained by calling 800-821-7432. Capitalized terms used but not
defined herein have the same meanings as in the Prospectuses.
<PAGE> 39

THE COMPANY

Trust for Federal Securities (Trust for Short-Term Federal
Securities prior to March 2, 1987) is a no-load, diversified, open-end
investment company designed primarily as a vehicle by which institutional
investors can invest cash reserves in a choice of portfolios consisting of
government securities. Trust for Federal Securities (the "Company") consists
of seven separate investment portfolios--FedFund, T-Fund, FedCash, T-Cash,
Federal Trust Fund, Treasury Trust Fund and Short Government Fund. This
Statement of Additional Information relates primarily to the Company's FedFund
and T-Fund portfolios (the "Funds").

The securities held by FedFund consist of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities and
repurchase agreements relating to such obligations. Securities held by T-Fund
are limited to U.S. Treasury bills, notes and other direct obligations of the
U.S. Treasury and repurchase agreements relating to direct Treasury
obligations. Although both Funds have the same investment adviser and have
comparable investment objectives, their yields normally will differ due to
their differing cash flows and differences in the specific portfolio securities
held.

THIS STATEMENT OF ADDITIONAL INFORMATION AND THE FUNDS'
PROSPECTUSES RELATE PRIMARILY TO THE FUNDS AND DESCRIBE ONLY THE INVESTMENT
OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS, AND OTHER MATTERS RELATING TO
THE FUNDS. INVESTORS WISHING TO OBTAIN SIMILAR INFORMATION REGARDING THE
COMPANY'S FEDCASH, T-CASH, FEDERAL TRUST FUND, TREASURY TRUST FUND OR SHORT
GOVERNMENT FUND PORTFOLIOS MAY OBTAIN SEPARATE PROSPECTUSES DESCRIBING THOSE
PORTFOLIOS BY CALLING THE DISTRIBUTOR AT 800-998-7633.

INVESTMENT OBJECTIVES AND POLICIES

As stated in the Funds' Prospectuses, the investment objective
of each Fund is to seek current income with liquidity and security of
principal. The following policies supplement the description in the
Prospectuses of the investment objectives and policies of the Funds.

PORTFOLIO TRANSACTIONS

-2-
<PAGE> 40

Purchases and sales of portfolio securities are usually principal transactions
without brokerage commissions. In making portfolio investments, PIMC seeks to
obtain the best net price and the most favorable execution of orders. To the
extent that the execution and price offered by more than one dealer are
comparable, PIMC may, in its discretion, effect transactions in portfolio
securities with dealers who provide the Company with research advice or other
services. Although the Funds will not seek profits through short-term trading,
PIMC may, on behalf of the Funds, dispose of any portfolio security prior to
its maturity if it believes such disposition is advisable.

Investment decisions for the Funds are made independently from
those for other investment company portfolios or accounts advised or managed by
PIMC. Such other portfolios may invest in the same securities as the Funds.
When purchases or sales of the same security are made at substantially the same
time on behalf of such other portfolios, transactions are averaged as to price,
and available investments allocated as to amount, in a manner which PIMC
believes to be equitable to each portfolio, including either Fund. In some
instances, this investment procedure may adversely affect the price paid or
received by a Fund or the size of the position obtained for a Fund. To the
extent permitted by law, PIMC may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for such other
investment company portfolios in order to obtain best execution.

Portfolio securities will not be purchased from or sold to and
the Funds will not enter into repurchase agreements or reverse repurchase
agreements with PIMC, PNC, PFPC, Provident Distributors, Inc. ("PDI") or any
affiliated person (as such term is defined in the 1940 Act) of any of them,
except to the extent permitted by the Securities and Exchange Commission (the
"SEC"). Furthermore, with respect to such transactions, securities, deposits
and repurchase agreements, the Funds will not give preference to Service
Organizations with whom the Funds enter into agreements concerning the
provision of support services to customers who beneficially own FedFund Dollar
shares or T-Fund Dollar shares ("Dollar shares"). (See the Prospectuses,
"Management of the Fund--Service Organizations.")

The Funds do not intend to seek profits through short-term
trading. The Funds' annual portfolio turnover rates will be relatively high
but the Funds' portfolio turnover is not expected to have a material effect on
its net incomes. The portfolio turnover rate for each of the Funds is expected
to be zero for regulatory reporting purposes.

<PAGE> 41

ADDITIONAL INFORMATION ON INVESTMENT PRACTICES

The repurchase price under the repurchase agreements described
in the Funds' Prospectuses generally equals the price paid by a Fund plus
interest negotiated on the basis of current short-term rates (which may be more
or less than the rate on the securities underlying the repurchase agreement).
Securities subject to repurchase agreements will be held by the Funds'
custodian, sub-custodian or in the Federal Reserve/Treasury book-entry system.
Repurchase agreements are considered to be loans by the Funds under the 1940
Act.

Whenever the Funds enter into reverse repurchase agreements as
described in their Prospectuses, they will place in a segregated custodial
account liquid assets having a value equal to the repurchase price (including
accrued interest) and will subsequently monitor the account to ensure such
equivalent value is maintained. Reverse repurchase agreements are considered
to be borrowings by the Funds under the 1940 Act.

As stated in the Funds' Prospectuses, the Funds may purchase
securities on a "when-issued" basis (i.e., for delivery beyond the normal
settlement date at a stated price and yield). When a Fund agrees to purchase
when-issued securities, its custodian will set aside cash or liquid portfolio
securities equal to the amount of the commitment in a separate account.
Normally, the custodian will set aside portfolio securities to satisfy a
purchase commitment, and in such a case such Fund may be required subsequently
to place additional assets in the separate account in order to ensure that the
value of the account remains equal to the amount of such Fund's commitment. It
may be expected that a Fund's net assets will fluctuate to a greater degree
when it sets aside portfolio securities to cover such purchase commitments than
when it sets aside cash. Because the Funds will set aside cash or liquid
assets to satisfy their respective purchase commitments in the manner
described, such a Fund's liquidity and ability to manage its portfolio might be
affected in the event its commitments to purchase when-issued securities ever
exceeded 25% of the value of its assets. Neither Fund intends to purchase
when-issued securities for speculative purposes but only in furtherance of its
investment objectives. The Funds reserve the right to sell the securities
before the settlement date if it is deemed advisable.

When a Fund engages in when-issued transactions, it relies on
the seller to consummate the trade. Failure of the seller to do so may result
in a Fund's incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
<PAGE> 42

Neither Fund will invest more than 10% of the value of its
assets in investments which are not readily marketable at the time of purchase
or subsequent valuation. Securities for purposes of this limitation do not
include securities which have been determined to be liquid by the Fund's Board
of Trustees based upon the trading markets for such securities.

INVESTMENT LIMITATIONS

The Funds' Prospectuses summarize certain investment
limitations that may not be changed without the affirmative vote of the holders
of a "majority of the outstanding shares" of the respective Fund (as defined
below under "Miscellaneous"). Below is a complete list of the Funds'
investment limitations that may not be changed without such a vote of
shareholders.

1. FedFund may not purchase securities other than U.S.
Treasury bills, notes and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, some of which may be subject to
repurchase agreements. There is no limit on the amount of FedFund's assets
which may be invested in the securities of any one issuer of such obligations.

2. T-Fund may not purchase securities other than direct
obligations of the U.S. Treasury such as Treasury bills and notes, some of
which may be subject to repurchase agreements. There is no limit on the amount
of T-Fund's assets which may be invested in securities of any one issuer of
such obligations.

FedFund and T-Fund may not:

3. Borrow money except from banks for temporary purposes and
then in an amount not exceeding 10% of the value of the particular Fund's total
assets, or mortgage, pledge or hypothecate its assets except in connection with
any such borrowing and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of the particular Fund's total assets at
the time of such borrowing. (This borrowing provision is not for investment
leverage, but solely to facilitate management of each Fund by enabling the
Company to meet redemption requests where the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous.)
<PAGE> 43

Borrowing may take the form of a sale of portfolio securities accompanied by a
simultaneous agreement as to their repurchase. Interest paid on borrowed funds
will not be available for investment.

4. Act as an underwriter.

5. Make loans except that the Funds may purchase or hold debt
obligations in accordance with their respective investment objective and
policies, may enter into repurchase agreements for securities, and may lend
portfolio securities against collateral consisting of cash or securities which
are consistent with the lending Fund's permitted investments, which is equal at
all times to at least 100% of the value of the securities loaned. There is no
investment restriction on the amount of securities that may be loaned, except
that payments received on such loans, including amounts received during the
loan on account of interest on the securities loaned, may not (together with
all non-qualifying income) exceed 10% of the Fund's annual gross income
(without offset for realized capital gains) unless, in the opinion of counsel
to the Company, such amounts are qualifying income under federal income tax
provisions applicable to regulated investment companies.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

IN GENERAL

Information on how to purchase and redeem a Fund's shares is
included in its Prospectus. The issuance of shares is recorded on the books of
the Funds, and share certificates are not issued unless expressly requested in
writing. Certificates are not issued for fractional shares.

The regulations of the Comptroller of the Currency provide
that funds held in a fiduciary capacity by a national bank approved by the
Comptroller to exercise fiduciary powers must be invested in accordance with
the instrument establishing the fiduciary relationship and local law. The
Company believes that the purchase of FedFund shares and T-Fund shares by such
national banks acting on behalf of their fiduciary accounts is not contrary to
applicable regulations if consistent with the particular account and proper
under the law governing the administration of the account.

Conflict of interest restrictions may apply to an
institution's receipt of compensation paid by the Funds on fiduciary funds that
are invested in Dollar shares.
<PAGE> 44

Institutions, including banks regulated by the Comptroller of the Currency and
investment advisers and other money managers subject to the jurisdiction of the
SEC, the Department of Labor or state securities commissions, should consult
their legal advisors before investing fiduciary funds in Dollar shares.

Prior to effecting a redemption of shares represented by
certificates, PFPC, the Funds' transfer agent, must have received such
certificates at its principal office. All such certificates must be endorsed
by the redeeming shareholder or accompanied by a signed stock power, in each
instance with the signature guaranteed by a commercial bank, a member of a
major stock exchange or other eligible guarantor institution, unless other
arrangements satisfactory to the Funds have previously been made. The Funds
may require any additional information reasonably necessary to evidence that a
redemption has been duly authorized.

Under the 1940 Act, the Funds may suspend the right of
redemption or postpone the date of payment upon redemption for any period
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which trading on said Exchange is
restricted, or during which (as determined by the SEC by rule or regulation) an
emergency exists as a result of which disposal or valuation of portfolio
securities is not reasonably practicable, or for such other periods as the SEC
may permit. (The Funds may also suspend or postpone the recordation of the
transfer of their shares upon the occurrence of any of the foregoing
conditions.)

In addition, the Funds may redeem shares involuntarily in
certain other instances if the Board of Trustees determines that failure to
redeem may have material adverse consequences to a Fund's shareholders in
general. Each Fund is obligated to redeem shares solely in cash up to $250,000
or 1% of the Fund's net asset value, whichever is less, for any one shareholder
within a 90-day period. Any redemption beyond this amount will also be in cash
unless the Board of Trustees determines that conditions exist which make
payment of redemption proceeds wholly in cash unwise or undesirable. In such a
case, the Fund may make payment wholly or partly in securities or other
property, valued in the same way as the Fund determines net asset value. (See
"Net Asset Value" below for an example of when such redemption or form of
payment might be appropriate.) Redemption in kind is not as liquid as a cash
redemption. Shareholders who receive a redemption in kind may incur
transaction costs if they sell such securities or property, and may receive
less than the redemption value of such securities or property upon sale,
particularly where such securities are sold prior to maturity.
<PAGE> 45

Any institution purchasing shares on behalf of separate
accounts will be required to hold the shares in a single nominee name (a
"Master Account"). Institutions investing in more than one of the Company's
portfolios or classes of shares must maintain a separate Master Account for
each portfolio and class of shares. Sub-accounts may be established by name or
number either when the Master Account is opened or later.

NET ASSET VALUE

As stated in each Fund's Prospectus, each Fund's net asset
value per share is calculated by adding the value of all of the Fund's
portfolio securities and other assets belonging to that Fund, subtracting the
liabilities charged to that Fund, and dividing the result by the total number
of that Fund's shares outstanding (by class). "Assets belonging to" a Fund
consist of the consideration received upon the issuance of shares together with
all income, earnings, profits and proceeds derived from the investment thereof,
including any proceeds from the sale, exchange or liquidation of such
investments, any funds or payments derived from any reinvestment of such
proceeds, and a portion of any general assets of the Company not belonging to a
particular portfolio. Assets belonging to a particular Fund are charged with
the direct liabilities of that Fund and with a share of the general liabilities
of the Company allocated in proportion to the relative net assets of such Fund
and the Company's other portfolios. Determinations made in good faith and in
accordance with generally accepted accounting principles by the Board of
Trustees as to the allocations of any assets or liabilities with respect to a
Fund are conclusive.

As stated in the Funds' Prospectuses, in computing the net
asset value of shares of the Funds for purposes of sales and redemptions, the
Funds use the amortized cost method of valuation. Under this method, the Funds
value each of their portfolio securities at cost on the date of purchase and
thereafter assume a constant proportionate amortization of any discount or
premium until maturity of the security. As a result, the value of a portfolio
security for purposes of determining net asset value normally does not change
in response to fluctuating interest rates. While the amortized cost method
provides certainty in portfolio valuation, it may result in valuations for the
Funds' securities which are higher or lower than the market value of such
securities.

thirteen months (with certain exceptions). In determining the average weighted
portfolio maturity of each Fund, a variable rate obligation that is issued or
guaranteed by the U.S. Government, or an agency or instrumentality thereof, is
deemed to have a maturity equal to the period remaining until the obligation's
next interest rate adjustment. The Company's Board of Trustees has also
established procedures, pursuant to rules promulgated by the SEC, that are
intended to stabilize the net asset value per share of each Fund for purposes
of sales and redemptions at $1.00. Such procedures include the determination
at such intervals as the Board deems appropriate, of the extent, if any, to
which each Fund's net asset value per share calculated by using available
market quotations or a matrix believed to provide reliable values deviates from
$1.00 per share. In the event such deviation exceeds 1/2 of 1% with respect to
either Fund, the Board will promptly consider what action, if any, should be
initiated. If the Board believes that the amount of any deviation from the
$1.00 amortized cost price per share of a Fund may result in material dilution
or other unfair results to investors or existing shareholders, it will take
such steps as it considers appropriate to eliminate or reduce to the extent
reasonably practicable any such dilution or unfair results. These steps may
include selling portfolio instruments prior to maturity; shortening the Fund's
average portfolio maturity; withholding or reducing dividends; redeeming shares
in kind; or utilizing a net asset value per share determined by using available
market quotations.

MANAGEMENT OF THE FUNDS

TRUSTEES AND OFFICERS

The Company's trustees and executive officers, their
addresses, principal occupations during the past five years and other
affiliations are provided below. In addition to the information set forth
below, the trustees serve in the following capacities:

Each trustee of the Company serves as a director of Temporary
Investment Fund, Inc. ("Temp"), as a trustee of Municipal Fund for Temporary
Investment ("Muni"), Portfolios for Diversified Investment ("PDI Fund") and The
PNC(R) Fund ("PNC Fund"). In addition, Messrs. Fortune, Pepper and Wilmerding
are directors of Independence Square Income Securities, Inc. ("ISIS") and
Managing General Partners of Chestnut Street Exchange Fund ("Chestnut");
Messrs. Pepper, Johnson and Santomero are directors of Municipal Fund for
California Investors, Inc. ("Cal Muni"); and Mr. Johnson is a director of
Municipal Fund for New York
<PAGE> 47

Investors, Inc. ("New York Muni") and a director of the International Dollar
Reserve Fund.

Each of the Company's officers, with the exception of Mr.
McConnel, holds like offices with Temp, PDI Fund and Muni. In addition, Mr.
McConnel is Secretary of PDI Fund and Temp; Mr. Roach is Treasurer of Chestnut
and PNC Fund, President and Treasurer of The RBB Fund, Inc. and Vice President
and Treasurer of ISIS, Cal Muni and New York Muni; Mr. Pepper is President and
Chairman of the Board of Muni, President and Chairman of the Cal Muni and PNC
Fund; and Mr. Fortune is President and Chairman of the Board of ISIS and
Managing General Partners of Chestnut.

<TABLE>
<CAPTION>
Principal Occupations
Position with the During Past 5 Years
Name and Address Company and Other Affiliations
- ---------------- ----------------- ----------------------
<S> <C> <C>
PHILIP E. COLDWELL(3,4) Trustee Economic Consultant;
Coldwell Financial Chairman, Coldwell Financial
Consultants Consultants, Member of the Board of
3330 Southwestern Blvd. Governors of the Federal Reserve
Dallas, Texas 75225 System, 1974 to 1980; President,
Federal Reserve Bank of Dallas, 1968
to 1974; Director, Maxus Energy
Corporation (energy products) (1989 -
1993); Director, Diamond Shamrock
Corp. (energy and chemical products)
until 1987.

ROBERT R. FORTUNE(2,3,4) Trustee Financial Consultant; Chairman,
2920 Ritter Lane President and Chief Executive Officer
Allentown, PA 18104 of Associated Electric & Gas
Insurance Services Limited, 1984-
1993; Member of the Financial
Executives Institute and American
Institute of Certified Public
Accountants; Director, Prudential
Utility Fund, Inc., Prudential
IncomeVertible Fund, Inc., and
Prudential Structured Maturity Fund,
Inc.
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
Principal Occupations
Position with the During the Past 5 Years
Name and Address Company and Other Affiliations
- ---------------- ----------------- ----------------------
<S> <C> <C>
RODNEY D. JOHNSON Trustee President, Fairmount
Fairmount Capital Capital Advisors, Inc. (financial
Advisors, Inc. advising) since 1987; Treasurer,
1435 Walnut Street North Philadelphia Health System
Drexel Building (formerly Girard Medical Center),
Philadelphia, PA 19102 1988 to 1992; Member, Board of
Education, School District of
Philadelphia, 1983 to 1988;
Treasurer, Cascade Aphasia Center,
1984 to 1988.

G. WILLING PEPPER(1,2) Chairman of the Board, Retired; Chairman of
128 Springton Lake Road President and Trustee the Board, The Institute for Cancer
Media, PA 19063 Research until 1979; Director,
Philadelphia National Bank until
1978; President, Scott Paper Company,
1971 to 1973; Chairman of the Board,
Specialty Composites Corp. until May
1984.

ANTHONY M. SANTOMERO Trustee Richard K. Mellon
310 Keithwood Road Professor of Finance since April
Wynnewood, PA 19096 1984, and Dean's Advisory Council
Member since July 1984, The Wharton
School, University of Pennsylvania;
Associate Editor, Journal of Banking
and Finance since June 1978;
Associate Editor, Journal of
Economics and Business since October
1979; Associate Editor, Journal of
Money, Credit and Banking since
January 1980; Research Associate, New
York University Center for Japan-US
Business and Economic Studies since
July 1989; Editorial Advisory Board,
Open Economics Review since November
1990; Director, The Zweig Fund and
The Zweig Total Return Fund.
</TABLE>
<PAGE> 49
<TABLE>
<CAPTION>
Principal Occupations
Position with the During the Past 5 Years
Name and Address Company and Other Affiliations
- ---------------- ----------------- ----------------------
<S> <C> <C>
DAVID R. WILMERDING, JR.(2) Vice Chairman of the President, Wilmerding &
Gates, Wilmerding, Carper Board and Trustee Co., Inc., Gates, Wilmerding, Carper
& Rawlings, Inc. & Rawlings, Inc. (investment
One Aldwyn Center advisers) since February 1989;
Villanova, PA 19085 Director, Beaver Management
Corporation.

EDWARD J. ROACH Vice President Certified Public
Bellevue Park Corporate and Treasurer Accountant; Partner of the accounting
Center firm of Main Hurdman until 1981; Vice
400 Bellevue Parkway Chairman of the Board, Fox Chase
Suite 100 Cancer Center; Trustee Emeritus,
Wilmington, DE 19809 Pennsylvania School for the Deaf;
Trustee Emeritus, Immaculata College.

W. BRUCE McCONNEL, III Secretary Partner of the law
PNB Building firm of Drinker Biddle & Reath
1345 Chestnut Street Philadelphia, Pennsylvania.
Philadelphia, PA 19107-3496
</TABLE>

- -----------------------

(1) This trustee is considered by the Company to be an "interested person"
of the Company as defined in the 1940 Act.

(2) Executive Committee Member.

(3) Audit Committee Member.

(4) Nominating Committee Member.

During intervals between meetings of the Board, the Executive
Committee may exercise the authority of the Board of Trustees in the management
of the Company's business to the extent permitted by law.

Each of the investment companies named above receives various
advisory and other services from PIMC and PNC. Of the above-mentioned funds,
PDI provides distribution services to Temp, Muni, PDI Fund, PNC Fund, Cal Muni
and New York Muni. Of the above-mentioned funds, the administrators provide
administration services to Temp, Muni, PDI Fund, PNC Fund, Cal Muni and New
York Muni.

For the fiscal year ended October 31, 1994, the Company paid a
total of $99,478 to its officers and trustees in all capacities of which
$47,633 was allocated to the Funds. In addition, the Company contributed
$2,678 during its last fiscal year to its retirement plan for employees (which
included Mr. Roach) of which $1,289 was allocated to the Funds. Drinker Biddle
& Reath, of which Mr. McConnel is a partner, receives legal fees as counsel to
the Company. No employee of PDI, PIMC, PFPC or PNC receives any compensation
from the Company for acting as an officer or trustee of the Company. The
trustees and officers of the Company as a group beneficially own less than 1%
of the shares of the Company's FedFund, T-Fund, FedCash, T-Cash, Federal Trust
Fund, Treasury Trust Fund and Short Government Fund portfolios.

By virtue of the responsibilities assumed by PDI, PIMC, PFPC
and PNC under their respective agreements with the Company, the Company itself
requires only one part-time employee in addition to its officers.
<PAGE> 50
The table below sets forth the compensation actually received
from the Fund Complex of which the Fund is a part by the trustees for the
fiscal year ended October 31, 1994:
<TABLE>
<CAPTION>
Total
Pension or Compensation
Retirement from Registrant
Aggregate Benefits Accrued Estimated Annual and Fund
Name of Person, Compensation as Part of Fund Benefits Upon Complex(1) Paid to
Position from Registrant Expenses Retirement Trustees
<S> <C> <C> <C> <C>
Philip E. Coldwell, $ 11,500.00 0 N/A (3)(2)$ 44,025.00
Trustee

Robert R. Fortune, 11,500.00 0 N/A (5)(2) 56,325.00
Trustee

Rodney D. Johnson, 11,500.00 0 N/A (5)(2) 54,775.00
Trustee

G. Willing Pepper, 20,500.00 0 N/A (6)(2) 98,275.00
Trustee and Chairman

Henry M. Watts, Jr.(3), 4,000.00 0 N/A (7)(2) 54,775.00
Trustee

David R. Wilmerding, 13,166.68 0 N/A (5)(2) 61,025.04
Jr., Trustee

Anthony M. Santomero, 11,500.00 0 N/A (4)(2) 44,025.00
Trustee ---------- ---------
$83,666.68 $413,225.04
</TABLE>

INVESTMENT ADVISER AND SUB-ADVISER

The advisory and sub-advisory services provided by PIMC and
PNC are described in the Funds' Prospectuses. For the advisory services
provided and expenses assumed by it, PIMC is entitled to receive a fee,
computed daily and payable monthly, based on the combined average net assets of
the Funds, FedCash, T-Cash, Federal Trust Fund and Treasury Trust Fund, as
follows:

- ----------------------------------

1. A Fund Complex means two or more investment companies that hold
themselves out to investors as related companies for purposes of
investment and investor services, or have a common investment adviser
or have an investment adviser that is an affiliated person of the
investment adviser of any of the other investment companies.

2. Total number of such other investment companies trustee serves on
within the Fund Complex.

3. Mr. Watts resigned as trustee of the Company on May 4, 1994.
<PAGE> 51
<TABLE>
<CAPTION>
Annual Fee The Funds' Combined
---------- Average Net Assets
--------------------
<S> <C>
.175% . . . . . . . . . . of the first $1 billion
.150% . . . . . . . . . . of the next $1 billion
.125% . . . . . . . . . . of the next $1 billion
.100% . . . . . . . . . . of the next $1 billion
.095% . . . . . . . . . . of the next $1 billion
.090% . . . . . . . . . . of the next $1 billion
.085% . . . . . . . . . . of the next $1 billion
.080% . . . of amounts in excess of $7 billion.
</TABLE>

The advisory fee is allocated between these Funds in proportion to their
relative net assets.

PIMC and the administrators have each agreed that if, in any
fiscal year, the expenses borne by a Fund exceed the applicable expense
limitations imposed by the securities regulations of any state in which shares
of the particular Fund are registered or qualified for sale to the public, they
will each reimburse such Fund for one-half of any excess to the extent required
by such regulations. Unless otherwise required by law, such reimbursement
would be accrued and paid on the same basis that the advisory and
administration fees are accrued and paid by such Fund. To the Funds'
knowledge, of the expense limitations in effect on the date of this Statement
of Additional Information, none is more restrictive than two and one-half
percent (2-1/2%) of the first $30 million of a Fund's average annual net
assets, two percent (2%) of the next $70 million of the average annual net
assets and one and one-half percent (1-1/2%) of the remaining average annual
net assets.

For the fiscal years ended October 31, 1992, 1993 and 1994,
the Company paid fees (net of waivers) for advisory services aggregating
$3,233,661, $1,488,938 and $924,760 with respect to FedFund, and $1,655,342,
$1,081,025 and $819,525 with respect to T-Fund, respectively. For the same
fiscal years, PIMC voluntarily waived advisory fees aggregating $0, $630,847
and $807,814 with respect to FedFund, and, $0 and $526,120 and $655,034 with
respect to T-Fund, respectively. Any fees waived by PIMC are not recoverable.
PIMC and PNC also serve as the adviser and sub-adviser, respectively, to the
Company's FedCash, T-Cash, Federal Trust Fund, Treasury Trust Fund and Short
Government Fund portfolios.

BANKING LAWS

Certain banking laws and regulations with respect to
investment companies are discussed in the Funds' Prospectuses. PIMC, PNC and
PFPC believe that they may perform the services for the Funds contemplated by
their respective agreements,
<PAGE> 52
Prospectuses and this Statement of Additional Information without violation of
applicable banking laws or regulations. It should be noted, however, that
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as further interpretations of present
requirements, could prevent PIMC and PFPC from continuing to perform such
services for the Funds and PNC from continuing to perform such services for
PIMC and the Funds. If PIMC, PFPC, or PNC were prohibited from continuing to
perform such services, it is expected that the Company's Board of Trustees
would recommend that the Funds enter into new agreements with other qualified
firms. Any new advisory agreement would be subject to shareholder approval.

In addition, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to State
law.

ADMINISTRATOR

As the Funds' administrators, PFPC and PDI have agreed to
provide the following services: (i) assist generally in supervising the Funds'
operations, including providing a Wilmington, Delaware order-taking facility
with toll-free IN-WATS telephone lines, providing for the preparing,
supervising and mailing of purchase and redemption order confirmations to
shareholders of record, providing and supervising the operation of an automated
data processing system to process purchase and redemption orders, maintaining a
back-up procedure to reconstruct lost purchase and redemption data, providing
information concerning the Funds to their shareholders of record, handling
shareholder problems, supervising the services of employees, provided by PDI,
whose principal responsibility and function is to preserve and strengthen
shareholder relations, and monitoring the arrangements pertaining to the Funds'
agreements with Service Organizations; (ii) assure that persons are available
to receive and transmit purchase and redemption orders; (iii) participate in
the periodic updating of the Funds' Prospectuses and Registration Statements;
(iv) assist in maintaining the Funds' Wilmington, Delaware office; (v) perform
administrative services in connection with the Fund's computer access program
maintained to facilitate shareholder access to the Funds; (vi) accumulate
information for and coordinate the preparation of reports to the Funds'
shareholders and the SEC; (vii) maintain the registration or qualification of
the Funds' shares for sale under state securities laws; (viii) prepare or
review, and provide advice with respect to, all sales literature
(advertisements, brochures and shareholder communications) for each of the
Funds and any class or sub-class thereof; and (ix) assist in the monitoring of
regulatory and legislative developments which may affect the
<PAGE> 53
Company, participate in counseling and assisting the Company in relation to
routine regulatory examinations and investigations, and work with the Company's
counsel in connection with regulatory matters and litigation.

For their administrative services, the administrators are
entitled jointly to receive fees from the six Funds referred to above
determined and allocated in the same manner as PIMC's advisory fee set forth
above. As stated in their Prospectuses, each administrator is also reimbursed
for its reasonable out-of-pocket expenses incurred in connection with the
Fund's computer access program. For the fiscal year ended October 31, 1992,
the Company paid fees (net of waivers) for administrative services to its
former administrator, The Boston Company Advisors, Inc. ("Boston Advisors"),
aggregating $3,233,661 with respect to FedFund, and $1,655,342 with respect to
T-Fund, respectively. Boston Advisors did not waive administration fees for
either Fund during the fiscal year 1992. For the period from October 1, 1992
through January 17, 1993 the Company paid fees (net of waivers) to its former
administrator, The Boston Company Advisors totalling $99,699 with respect to
FedFund and $65,982 with respect to T-Fund. Administration fees payable by
FedFund and T-Fund of $2,554 and $494, respectively, were voluntarily waived by
Boston Advisors during this period. For the period from January 18, 1993
through October 31, 1993, the Company paid fees (net of waivers) for
administrative services to PFPC and PDI (formerly called MFD Group, Inc.), its
administrators, aggregating $1,488,938 with respect to FedFund and $1,081,025
with respect to T-Fund. For the same period, administration fees of $630,847
with respect to FedFund and $526,120 with respect to T-Fund were voluntarily
waived. For the fiscal year ended October 31, 1994, the Company paid fees (net
of waivers) for administration fees aggregating $924,760 with respect to
FedFund and $807,814 with respect to T-Fund, respectively. For the same fiscal
year, PFPC and PDI voluntarily waived administration fees aggregating $819,525
with respect to FedFund and $655,034 with respect to T-Fund, respectively.

PFPC, a wholly owned, indirect subsidiary of PNC provides
administrative or and/or sub-administrative services to investment companies
which are distributed by PDI. PFPC and PDI also serve as co-administrators of
the Company's FedCash, T-Cash, Federal Trust Fund, Treasury Trust Fund and
Short Government Fund portfolios.

DISTRIBUTOR

PDI acts as the distributor of the Funds' shares. Each Fund's
shares are sold on a continuous basis by the distributor as agent, although it
is not obliged to sell any particular
<PAGE> 54
amount of shares. PDI will prepare or review, provide advice with respect to,
and file with the federal and state agencies or other organization as required
by federal, state, or other applicable laws and regulations, all sales
literature (advertisements, brochures and shareholder communications) for each
of the Funds and any class or sub-class thereof. The distributor pays the cost
of printing and distributing prospectuses to persons who are not shareholders
of the Funds (excluding preparation and printing expenses necessary for the
continued registration of Fund shares) and of preparing, printing and
distributing all sales literature. No compensation is payable by the Funds to
the distributor for its distribution services. PDI also serves as the
distributor for the Company's FedCash, T-Cash, Federal Trust Fund, Treasury
Trust Fund and Short Government Fund portfolios. PDI is a Delaware
corporation, with its principal place of business located at 259 Radnor-Chester
Road, Suite 120, Radnor, Pennsylvania 19087.

CUSTODIAN AND TRANSFER AGENT

Pursuant to a Custodian Agreement, PNC serves as the Funds'
custodian. Under the Agreement, PNC has agreed to provide the following
services: (i) maintain a separate account or accounts in the name of the
Funds; (ii) hold and disburse portfolio securities on account of the Funds;
(iii) collect and make disbursements of money on behalf of the Funds; (iv)
collect and receive all income and other payments and distributions on account
of the Funds' portfolio securities; and (v) make periodic reports to the Board
of Trustees concerning the Funds' operations. The Custodian Agreement permits
PNC, on 30 days' notice, to assign its rights and delegate its duties
thereunder to any other affiliate of PNC or PNC Bank Corp., provided that PNC
remains responsible for the performance of the delegate under the Custodian
Agreement.

The Funds reimburse PNC for its direct and indirect costs and
expenses incurred in rendering custodial services. Under the Custodian
Agreement, each Fund pays PNC an annual fee equal to $.25 for each $1,000 of
such Fund's average daily gross assets, which fee declines as such Fund's
average daily gross assets increase. In addition, each Fund pays the custodian
a fee for each purchase, sale or delivery of a security, interest collection or
claim item, and reimburses PFPC for out-of-pocket expenses incurred on behalf
of the Fund. For the fiscal years ended October 31, 1992, 1993 and 1994,
FedFund paid fees for custodian services aggregating, $349,147, $254,450 and
$220,443, respectively. For the same fiscal years, T-Fund paid fees for
custodian services aggregating, $226,417, $216,000, and $202,087, respectively.
PNC also serves as custodian for the Company's FedCash, T-Cash, Federal Trust
Fund, Treasury Trust Fund and
<PAGE> 55
Short Government Fund portfolios. PNC's principal business address is Broad
and Chestnut Streets, Philadelphia, Pennsylvania 19102.

PFPC also serves as the Funds' transfer agent, registrar and
dividend disbursing agent pursuant to a Transfer Agency Agreement. Under the
Agreement, PFPC has agreed to provide the following services: (i) maintain a
separate account or accounts in the name of the Funds; (ii) issue, transfer and
redeem shares of the Funds; (iii) disburse dividends and distributions, in the
manner described in each Fund's Prospectus, to shareholders of the Fund; (iv)
transmit all communications by the Funds to their shareholders or their
authorized representatives, including reports to shareholders, distribution and
dividend notices and proxy materials for meetings of shareholders; (v) prepare
and file with the appropriate taxing authorities reports or notices relating to
dividends and distributions made by the Funds; (vi) respond to correspondence
by shareholders, security brokers and others relating to its duties; (vii)
maintain shareholder accounts; and (viii) make periodic reports to the
Company's Board of Trustees concerning the Funds' operations. The Transfer
Agency Agreement permits PFPC, on 30-days' notice, to assign its rights and
duties thereunder to any other affiliate of PNC or PNC Bank Corp., provided
that PFPC remains responsible for the performance of the delegate under the
Transfer Agency Agreement.

Under the Transfer Agency Agreement, each Fund pays PFPC fees
at an annual rate of $12.00 per account and sub-account maintained by PFPC
plus $1.00 for each purchase or redemption transaction by an account (other
than a purchase transaction made in connection with the automatic reinvestment
of dividends). Payments to PFPC for sub-accounting services provided by others
are limited to the amount which PFPC pays to others for such services. In
addition, the Funds reimburse PFPC for out-of-pocket expenses related to such
services. For the fiscal years ended October 31, 1992, 1993 and 1994, FedFund
paid fees for transfer agency services aggregating, $159,340, $147,259 and
$189,439, respectively. For the same fiscal years, T-Fund paid fees for
transfer agency services aggregating, $123,706, $98,116 and $81,291,
respectively. PFPC also serves as transfer agent, registrar and dividend
disbursing agent for the Company's FedCash, T-Cash, Federal Trust Fund,
Treasury Trust Fund and Short Government Fund.

SERVICE ORGANIZATIONS

As stated in the Funds' Prospectuses, the Funds will enter
into an agreement with each Service Organization which purchases Dollar shares
requiring it to provide support services to its customers who beneficially own
Dollar shares in
<PAGE> 56
consideration of the Funds' payment of .25% (on an annualized basis) of the
average daily net asset value of the Dollar shares held by the Service
Organization for the benefit of customers. Such services include: (i)
aggregating and processing purchase and redemption requests from customers and
placing net purchase and redemption orders with the transfer agent; (ii)
providing customers with a service that invests the assets of their accounts in
Dollar shares; (iii) processing dividend payments from the Funds on behalf of
customers; (iv) providing information periodically to customers showing their
positions in Dollar shares; (v) arranging for bank wires; (vi) responding to
customer inquiries relating to the services performed by the Service
Organization; (vii) providing sub-accounting with respect to Dollar shares
beneficially owned by customers or the information necessary for sub-
accounting; (viii) forwarding shareholder communications from the Funds (such
as proxies, shareholder reports, annual and semi-annual financial statements
and dividend, distribution and tax notices) to customers, if required by law;
and (ix) other similar services if requested by the Funds. For the fiscal year
ended October 31, 1994, the Company paid $145,430 in servicing fees to an
affiliate of the Company's adviser (representing 12.0% of the aggregate
servicing fees) of which $101,779 and $43,651 was allocated to FedFund and
T-Fund, respectively, pursuant to service agreements in effect during such
period.

Each Fund's agreements with Service Organizations are governed
by a Shareholder Services Plan (the "Plan") that has been adopted by the
Company's Board of Trustees pursuant to an exemptive order granted by the SEC
in connection with the creation of the Dollar shares. Pursuant to each Plan,
the Board of Trustees reviews, at least quarterly, a written report of the
amounts expended under the Fund's agreements with Service Organizations and the
purposes for which the expenditures were made. In addition, the Funds'
arrangements with Service Organizations must be approved annually by a majority
of the Company's trustees, including a majority of the trustees who are not
"interested persons" of the Company as defined in the 1940 Act and have no
direct or indirect financial interest in such arrangements (the "Disinterested
Trustees").

The Board of Trustees has approved the Funds' arrangements
with Service Organizations based on information provided by the Funds' service
contractors that there is a reasonable likelihood that the arrangements will
benefit the Funds and their shareholders by affording the Funds greater
flexibility in connection with the servicing of the accounts of the beneficial
owners of their shares in an efficient manner. Any material amendment to the
Funds' arrangements with Service Organizations must be approved by a majority
of the Company's Board of Trustees (including a majority of the Disinterested
<PAGE> 57
Trustees). So long as the Funds' arrangements with Service Organizations are
in effect, the selection and nomination of the members of the Company's Board
of Trustees who are not "interested persons" (as defined in the 1940 Act) of
the Company will be committed to the discretion of such non-interested
trustees.

EXPENSES

The Funds' expenses include taxes, interest, fees and salaries
of the Company's trustees and officers, SEC fees, state securities
qualification fees, Standard & Poor's rating fees (cost incurred by T-Fund
only), Moody's rating fees (cost incurred by T-Fund only), costs of preparing
and printing prospectuses for regulatory purposes and for distribution to
shareholders, advisory and administration fees, charges of the custodian,
transfer agent and dividend disbursing agent, Service Organization fees,
certain insurance premiums, outside auditing and legal expenses, costs of the
Funds' computer access program, costs of shareholder reports and shareholder
meetings and any extraordinary expenses. The Funds also pay for brokerage fees
and commissions (if any) in connection with the purchase of portfolio
securities.

ADDITIONAL INFORMATION CONCERNING TAXES

The following summarizes certain additional tax considerations
generally affecting each Fund and its shareholders that are not described in
each Fund's Prospectus. No attempt is made to present a detailed explanation
of the tax treatment of the Funds or their shareholders or possible legislative
changes, and the discussion here and in each Fund's Prospectus is not intended
as a substitute for careful tax planning. Investors should consult their tax
advisors with specific reference to their own tax situations.

Each Fund of the Company is treated as a separate corporate
entity under the Code and intends to qualify each year as a regulated
investment company under the Code. In order to so qualify for a taxable year,
each Fund must satisfy the distribution requirement described in its
Prospectus, derive at least 90% of its gross income for the year from certain
qualifying sources, comply with certain diversification requirements and derive
less than 30% of its gross income from the sale or other disposition of
securities and certain other investments held for less than three months.
Interest (including original issue discount and accrued market discount)
received by a Fund upon maturity or disposition of a security held for less
than three months will not be treated as gross income derived from the sale or
other disposition of such security within the
<PAGE> 58
meaning of this requirement. However, any other income that is attributable to
realized market appreciation will be treated as gross income from the sale or
other disposition of securities for this purpose.

A 4% nondeductible excise tax is imposed on regulated
investment companies that fail to distribute currently an amount equal to
specified percentages of their ordinary taxable income and capital gain net
income (excess of capital gains over capital losses). Each Fund intends to
make sufficient distributions or deemed distributions of its ordinary taxable
income and any capital gain net income each calendar year to avoid liability
for this excise tax.

If for any taxable year a Fund does not qualify for tax
treatment as a regulated investment company, all of its taxable income will be
subject to federal income tax at regular corporate rates, without any deduction
for distributions to Fund shareholders. In such event, dividend distributions
would be taxable as ordinary income to Fund shareholders to the extent of that
Fund's current and accumulated earnings and profits and would be eligible for
the dividends received deduction in the case of corporate shareholders.

Each Fund will be required in certain cases to withhold and
remit to the U.S. Treasury 31% of taxable dividends or gross sale proceeds paid
to any shareholder who has failed to provide a correct tax identification
number in the manner required, who is subject to withholding by the Internal
Revenue Service for failure to properly include on his return payments of
taxable interest or dividends, or who has failed to certify to the Fund when
required to do so that he is not subject to backup withholding or that he is an
"exempt recipient."

Depending upon the extent of the Funds' activities in states
and localities in which their offices are maintained, in which their agents or
independent contractors are located or in which they are otherwise deemed to be
conducting business, the Funds may be subject to the tax laws of such states or
localities. In addition, in those states and localities which have income tax
laws, the treatment of the Funds and their shareholders under such laws may
differ from their treatment under federal income tax laws. Shareholders are
advised to consult their tax advisors concerning the application of state and
local taxes.

The foregoing discussion is based on federal tax laws and
regulations which are in effect on the date of this Statement of Additional
Information; such laws and regulations may be changed by legislative or
administrative action.
<PAGE> 59
DIVIDENDS

Net income of each of the Funds for dividend purposes consists
of (i) interest accrued and original issue discount earned on the Fund's
assets, (ii) plus the amortization of market discount and minus the
amortization of market premium on such assets, (iii) less accrued expenses
directly attributable to the Fund and the general expenses (e.g., legal,
accounting and trustees' fees) of the Company prorated to the Fund on the basis
of its relative net assets. In addition, Dollar shares bear exclusively the
expense of fees paid to Service Organizations. (See "Management of the
Funds--Service Organizations.")

As stated, the Company uses its best efforts to maintain the
net asset value per share of FedFund and T-Fund at $1.00. As a result of a
significant expense or realized or unrealized loss incurred by either Fund, it
is possible that the Fund's net asset value per share may fall below $1.00.

ADDITIONAL YIELD INFORMATION

The "yields" and "effective yields" are calculated separately
for each class of shares of each Fund and in accordance with the formulas
prescribed by the SEC. The seven-day yield for each class of shares is
calculated by determining the net change in the value of a hypothetical
pre-existing account in the particular Fund which has a balance of one share of
the class involved at the beginning of the period, dividing the net change by
the value of the account at the beginning of the period to obtain the base
period return, and multiplying the base period return by 365/7. The net change
in the value of an account in a Fund includes the value of additional shares
purchased with dividends from the original share and dividends declared on the
original share and any such additional shares, net of all fees charged to all
shareholder accounts in proportion to the length of the base period and the
Fund's average account size, but does not include gains and losses or
unrealized appreciation and depreciation. In addition, an effective annualized
yield quotation may be computed on a compounded basis with respect to each
class of its shares by adding 1 to the base period return for the class
involved (calculated as described above), raising that sum to a power equal to
365/7, and subtracting 1 from the result. Similarly, based on the calculations
described above, the Funds' 30-day (or one-month) yields and effective yields
may also be calculated.

For the seven-day period ended October 31, 1994, the yields on
FedFund shares and T-Fund shares were 4.86% and 4.70%, respectively, and the
compounded effective yields on FedFund shares and T-Fund shares were 4.98% and
4.81%, respectively; the
<PAGE> 60
yields on FedFund Dollar shares and T-Fund Dollar shares were 4.61% and 4.45%,
respectively, and the compounded effective yields on FedFund Dollar shares and
T-Fund Dollar shares were 4.72% and 4.55%, respectively. During this seven-day
period, the Funds' adviser and administrator voluntarily waived a portion of
its advisory and administration fees payable by the Funds. Without these
waivers, for the same period the yields on FedFund shares and T-Fund shares
would have been 4.74% and 4.59%, respectively, and the compounded effective
yields on FedFund shares and T-Fund shares would have been 4.85% and 4.69%,
respectively, the yield on FedFund Dollar Shares and T-Fund Dollar Shares would
have been 4.49% and 4.34%, respectively, and the compounded effective yields on
FedFund Dollar Shares and T-Fund Dollar Shares would have been 4.59% and 4.43%,
respectively.

For the 30-day period ended October 31, 1994, the yields on
FedFund shares and T-Fund shares were 4.81% and 4.68%, respectively, and the
compounded effective yields on FedFund shares and T-Fund shares were 4.93% and
4.79%, respectively; the yields on FedFund Dollar shares and T-Fund Dollar
shares were 4.56% and 4.43%, respectively, and the compounded effective yields
on FedFund Dollar shares and T-Fund Dollar shares were 4.66% and 4.53%,
respectively. During this 30-day period, the Funds' adviser and administrator
voluntarily waived a portion of the advisory and administration fees payable by
the Funds. Without these waivers, for the same period the yields on FedFund
shares and T-Fund shares would have been 4.69% and 4.57%, respectively, and the
compounded effective yields on FedFund shares and T-Fund shares would have been
4.80% and 4.67%, respectively, the yield on FedFund Dollar Shares and T-Fund
Dollar Shares would have been 4.44% and 4.32%, respectively, and the compounded
effective yields on FedFund Dollar Shares and T-Fund Dollar Shares would have
been 4.54% and 4.41%, respectively.

From time to time, in advertisements or in reports to
shareholders, the performance of the Funds may be quoted and compared to that
of other money market funds or accounts with similar investment objectives and
to stock or other relevant indices. For example, the yields of the Funds may
be compared to the Donoghue's Money Fund Average, which is an average compiled
by IBC/Donoghue's MONEY FUND REPORT(R) of Holliston, MA 01746, a widely
recognized independent publication that monitors the performance of money
market funds, or to the average yields reported by the Bank Rate Monitor from
money market deposit accounts offered by the 50 leading banks and thrift
institutions in the top five standard metropolitan statistical areas.

THE FUNDS' YIELDS WILL FLUCTUATE, AND ANY QUOTATION OF YIELD
SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF THE FUTURE
<PAGE> 61
PERFORMANCE OF THE FUNDS. Since yields fluctuate, yield data cannot
necessarily be used to compare an investment in the Funds' shares with bank
deposits, savings accounts, and similar investment alternatives which often
provide an agreed or guaranteed fixed yield for a stated period of time.
Shareholders should remember that performance and yield are generally functions
of kind and quality of the investments held in a portfolio, portfolio maturity,
operating expenses net of waivers and expense reimbursements, and market
conditions. Any fees charged by Service Organizations or other institutional
investors with respect to customer accounts in investing in shares of the Funds
will not be included in calculations of yield and performance; such fees, if
charged, would reduce the actual performance and yield from that quoted.

ADDITIONAL DESCRIPTION CONCERNING FUND SHARES

The Company does not presently intend to hold annual meetings
of shareholders except as required by the 1940 Act or other applicable law.
Upon the written request of shareholders owning at least twenty percent of the
Company's shares, the Company will call for a meeting of shareholders to
consider the removal of one or more trustees and other certain matters. To the
extent required by law, the Company will assist in shareholder communication in
such matters.

As stated in the Prospectuses for the Funds, holders of the
Company's FedFund and FedFund Dollar shares will vote in the aggregate and not
by class on all matters, except where otherwise required by law and except that
only FedFund Dollar shares will be entitled to vote on matters submitted to a
vote of shareholders pertaining to the Fund's arrangements with Service
Organizations. (See "Management of the Funds--Service Organizations.")
Holders of the Company's T-Fund and T-Fund Dollar shares will also vote in the
aggregate and not by class except as described above. Further, shareholders of
all of the Company's portfolios will vote in the aggregate and not by portfolio
except as otherwise required by law or when the Board of Trustees determines
that the matter to be voted upon affects only the interests of the shareholders
of a particular portfolio. Rule 18f-2 under the 1940 Act provides that any
matter required to be submitted by the provisions of such Act or applicable
state law, or otherwise, to the holders of the outstanding securities of an
investment company such as the Company shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each portfolio affected by the matter. Rule 18f-2
further provides that a portfolio shall be deemed to be affected by a matter
unless it is clear that the interests of each portfolio in the matter are
identical or that the matter does not affect any interest of the
<PAGE> 62
portfolio. Under the Rule the approval of an investment advisory agreement or
any change in a fundamental investment policy would be effectively acted upon
with respect to a portfolio only if approved by the holders of a majority of
the outstanding voting securities of such portfolio. However, the Rule also
provides that the ratification of the selection of independent accountants, the
approval of principal underwriting contracts and the election of trustees are
not subject to the separate voting requirements and may be effectively acted
upon by shareholders of the investment company voting without regard to
portfolio.

COUNSEL

Drinker Biddle & Reath, Philadelphia National Bank Building,
1345 Chestnut Street, Philadelphia, Pennsylvania 19107-3496, of which W. Bruce
McConnel, III, Secretary of the Company, is a partner, serves as counsel to the
Company and will pass upon the legality of the shares offered hereby.

AUDITORS

The financial statements of the Funds which appear in this
Statement of Additional Information and the information included in the
Financial Highlights section which appears in the Funds' Prospectuses have
been audited by Coopers & Lybrand L.L.P. independent accountants, whose
report thereon appears elsewhere herein, and have been included herein and in
the Funds' Prospectuses in reliance upon the report of said firm of accountants
given upon their authority as experts in accounting and auditing.
Coopers & Lybrand L.L.P. has offices at 2400 Eleven Penn Center, Philadelphia,
Pennsylvania 19103.

MISCELLANEOUS

SHAREHOLDER VOTE

As used in this Statement of Additional Information and the
Prospectuses for the Funds, a "majority of the outstanding shares" of a Fund or
of any other portfolio means the lesser of (1) 67% of the shares of such Fund
(irrespective of class) or of the portfolio represented at a meeting at which
the holders of more than 50% of the outstanding shares of such Fund or
portfolio are present in person or by proxy, or (2) more than 50% of the
outstanding shares of such Fund (irrespective of class) or of the portfolio.
<PAGE> 63
CERTAIN RECORD HOLDERS

On January 31, 1995, the name, address and percentage of ownership of
each institutional investor that owned of record 5% or more of the outstanding
shares of the Company's FedFund and T-Fund portfolio were as follows:

<TABLE>
<CAPTION>
FedFund
-------
<S> <C>
U S Trust Company of New York 5.02%
Attn: Trading Operations
114 West 47th Street, 5th Floor
New York, NY 10036

Mercantile Bank N.A. 5.60%
Trust Securities Unit 17-1
Attn: Koleen (Dede) Clark
P.O. Box 387 Main Post Office
St. Louis, MO 63166

Saxon & Company/Custody 5.87%
PNC Bank
Income Collections 76-A-260
Airport Bus Ctr/Intl Court 2
200 Stevens Drive
Lester, PA 19113

Bank of America NT & SA 6.90%
The Private Bank #8329
Attn: ACI Unit
701 S. Western Avenue
Glendale, CA 91201

Securities Lending 13.45%
State Street Bank & Trust Co.
Global Securities Lending
Kerry Reardon/Mgmt Accountant
2 International Place, 31st Floor
Boston, MA 02110

Reinvested Earnings 5.63%
State Street Bank & Trust Co.
Kerry Reardon/Mgmt Accountant
2 International Place, 31st Floor
Boston, MA 02110

T-Fund
------

AKPAC & Co. 16.21%
Society/Key
Attn: Robyn Kudley
900 Euclid Avenue, 5th Floor
Cleveland, OH 44101
</TABLE>
<PAGE> 64
<TABLE>
<S> <C>
U S Trust Company of New York 5.90%
Attn: Trading Operations
114 West 47th Street, 5th Floor
New York, NY 10036

Integon Life Insurance Corp 14.30%
Head Asset Management
Attn: Dirk Russell
545 Madison Avenue, 6th Floor
New York, NY 10022

PNC Mortgage Securities Corp 6.29%
Attn: Trust Cash
700 Deerpath Drive
Vernon Hills, IL 60061
</TABLE>

SHAREHOLDER AND TRUSTEE LIABILITY

The Company is organized as a "business trust" under the laws
of the Commonwealth of Pennsylvania. Shareholders of such a trust may, under
certain circumstances, be held personally liable (as if they were partners) for
the obligations of the trust. The Declaration of Trust of the Company provides
that shareholders of the Funds shall not be subject to any personal liability
for the acts or obligations of the Company and that every note, bond, contract,
order or other undertaking made by the Company shall contain a provision to the
effect that the shareholders are not personally liable thereunder. The
Declaration of Trust provides for indemnification out of the trust property of
any shareholder held personally liable solely by reason of being or having been
a shareholder and not because of any acts or omissions or some other reason.
The Declaration of Trust also provides that the Company shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the Company and satisfy any judgment thereon. Thus, the risk of
a shareholder's incurring financial loss beyond its investment on account of
shareholder liability is limited to circumstances in which the Company itself
would be unable to meet its obligations.

The Company's Declaration of Trust provides further that no
trustee, officer or agent of the Company shall be personally liable for or on
account of any contract, debt, tort, claim, damage, judgment or decree arising
out of or connected with the administration or preservation of the trust estate
or the conduct of any business of the Company, nor shall any trustee be
personally liable to any person for any action or failure to act except by
reason of bad faith, willful misfeasance, gross negligence in the performance
of any duties or by reason of reckless disregard of the obligations and duties
as trustee. It also provides that all persons having any claim against the
trustees or the Company shall look solely to the trust property for payment.
With the exceptions stated, the Declaration of Trust provides that a trustee is
entitled to be indemnified
<PAGE> 65
against all liabilities and expenses reasonably incurred by him or her in
connection with the defense or disposition of any proceeding in which the
trustee may be involved or with which the trustee may be threatened by reason
of being or having been a trustee, and that the trustees have the power, but
not the duty, to indemnify officers and employees of the Company unless such
person would not be entitled to indemnification had he or she been a trustee.
<PAGE> 66

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of Trust for Federal Securities:

We have audited the accompanying statements of net assets of the FedFund,
T-Fund, FedCash, T-Cash, Federal Trust Fund, Treasury Trust Fund and Short
Government Fund Portfolios of Trust for Federal Securities (the "Fund") as of
October 31, 1994 and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund'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
October 31, 1994, by correspondence with the custodian and brokers. 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 the
FedFund, T-Fund, FedCash, T-Cash, Federal Trust Fund, Treasury Trust Fund and
Short Government Fund Portfolios of Trust for Federal Securities, as of October
31, 1994, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 15, 1994

FS-1
<PAGE> 67

FEDFUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
U.S. GOVERNMENT
SECURITIES-- 0.6%
U.S. Treasury Notes
12/31/94...... 4.625% $ 10,000 $ 10,017,084
--------------
Total.................... 10,017,084
--------------
AGENCY AND
INSTRUMENTALITY
OBLIGATIONS--57.3%
Federal Farm Credit
Bank Bonds
11/01/94...... 4.750 4,500 4,500,000
01/03/95...... 5.000 15,000 15,000,000
--------------
19,500,000
--------------
Federal Farm Credit
Bank Discount Notes
11/01/94...... 4.600 1,500 1,500,000
06/26/95...... 5.200 14,000 13,520,733
--------------
15,020,733
--------------
Federal Home Loan
Bank Bonds
03/27/95...... 6.450 14,835 14,909,268
06/13/95...... 5.190 15,000 14,991,807
--------------
29,901,075
--------------
Federal Home Loan Bank Discount
Notes
11/04/94...... 4.620 15,000 14,994,225
11/07/94...... 4.640 20,000 19,984,533
02/28/95...... 5.400 25,000 24,553,750
03/28/95...... 5.310 15,000 14,674,763
04/17/95...... 5.580 20,000 19,482,300
05/08/95...... 5.500 25,000 24,281,944
--------------
117,971,515
--------------
Federal Home Loan Bank Variable
Rate Notes+
11/02/94...... 5.360 17,000 17,000,000
10/03/95...... 5.2175 30,000 29,986,192
10/20/95...... 4.780 20,000 19,984,894
--------------
66,971,086
--------------
Federal Home Loan Mortgage
Corporation
Discount Notes
02/15/95...... 5.250 24,000 23,629,000
02/23/95...... 5.420 20,000 19,656,733
--------------
43,285,733
--------------

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
Federal National
Mortgage Association
Discount Notes
11/04/94...... 4.600% $ 5,000 $ 4,998,083
11/07/94...... 4.890 10,000 9,991,850
11/10/94...... 4.650 25,000 24,970,938
11/17/94...... 4.880 50,000 49,891,556
11/29/94...... 4.690 15,000 14,945,283
11/29/94...... 4.750 25,000 24,907,639
12/16/94...... 4.660 25,000 24,854,375
12/23/94...... 4.800 20,000 19,861,333
12/29/94...... 4.770 20,000 19,846,300
02/17/95...... 5.090 20,000 19,694,600
03/22/95...... 5.330 40,000 39,164,966
03/31/95...... 5.370 20,000 19,552,500
06/30/95...... 5.500 10,000 9,631,806
--------------
282,311,229
--------------
Federal National Mortgage
Association Variable Rate
Notes+
11/01/94...... 4.820 75,000 75,000,000
11/01/94...... 5.750 40,000 40,000,000
--------------
115,000,000
--------------
Student Loan
Marketing
Association
Bonds
06/30/95...... 5.315 10,000 10,000,000
--------------
Student Loan
Marketing
Association
Variable Rate Notes+
11/01/94...... 5.360 4,000 4,002,120
11/01/94...... 5.380 47,850 47,837,160
11/01/94...... 5.400 22,000 21,999,492
11/01/94...... 5.410 10,000 10,000,000
11/01/94...... 5.420 10,000 10,007,604
11/01/94...... 5.510 55,000 55,031,260
11/01/94...... 5.540 11,600 11,606,064
11/01/94...... 5.560 20,000 20,022,047
11/01/94...... 5.585 71,520 71,699,582
11/01/94...... 5.610 18,700 18,779,062
--------------
270,984,391
--------------
Total.................... 970,945,762
--------------
</TABLE>

FS-2
<PAGE> 68

FEDFUND PORTFOLIO
Statement of Net Assets (Continued)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS--42.2%
Donaldson Lufkin & Jenrette
Securities Corp.
11/01/94...... 4.900% $ 75,000 $ 75,000,000
(Agreement dated 10/31/94
to be repurchased at
$75,010,208,
collateralized by
$34,340,000 Federal Home
Loan Mortgage Corporation
Bonds 6.000% to 7.500%
due from 03/01/23 to
03/01/24; $132,735,000
Federal National Mortgage
Association Strips 8.000%
due from 01/01/24 to
07/01/24 and $50,434,000
Federal National Mortgage
Association Bonds 9.000%
to 10.000% due from
02/15/20 to 08/01/21. The
market value is
$77,250,462.)
First (The) Boston Corp.
11/10/94...... 4.800 30,000 30,000,000
(Agreement dated 08/15/94
to be repurchased at
$30,348,000,
collateralized by
$37,300,572, Federal Home
Loan Mortgage Corporation
Adjustable Rate Mortgage
Bonds 5.466% to 5.648%
due from 06/01/22 to
07/01/23. The market
value is $36,845,222.)
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
11/10/94...... 4.950% $ 40,000 $ 40,000,000
(Agreement dated 10/12/94
to be repurchased at
$40,159,500,
collateralized by
$45,880,580, Federal Home
Loan Mortgage Corporation
Adjustable Rate Mortgage
Bonds 4.025% to 6.031%
due from 08/01/23 to
06/01/24. The market
value is $45,785,289.)
11/17/94...... 4.800 40,000 40,000,000
(Agreement dated 10/19/94
to be repurchased at
$40,154,667,
collateralized by
$44,880,000, Federal Home
Loan Mortgage Corporation
Adjustable Rate Mortgage
Bonds 6.254% due from
11/17/94 to 04/01/24. The
market value is
$45,216,600.)
Greenwich Capital Markets, Inc.
11/01/94...... 4.900 70,000 70,000,000
(Agreement dated 10/31/94
to be repurchased at
$70,009,528,
collateralized by
$146,068,000, Resolution
Funding Corporation
Adjustable Rate Mortgage
Bonds 8.625% to 9.375%
due from 07/01/14 to
04/15/30 and $1,000,000
Student Loan Marketing
Association Floating Rate
Notes 3.510% due
07/01/96. The market
value is $71,502,581.)
</TABLE>

FS-3
<PAGE> 69

FEDFUND PORTFOLIO
Statement of Net Assets (Continued)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- -------------
<S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Kidder, Peabody & Co., Inc.
11/01/94....... 4.890% $170,000 $ 170,000,000
(Agreement dated 10/31/94 to
be repurchased at
$170,023,092,
collateralized
by $228,684,284,
Government National
Mortgage Association Bonds
6.000% to 9.750% due from
08/15/08 to 11/15/30. The
market value is
$175,734,665.)
Lehman Government Securities,
Inc.
11/01/94....... 4.900 150,000 150,000,000
(Agreement dated 10/31/94 to
be repurchased at
$150,020,417,
collateralized by
$154,047,000, U.S.
Treasury Notes 4.375%
to 7.875% due from
07/31/96 to 08/15/04. The
market value is
$152,955,550.)
Merrill Lynch & Co., Inc.
11/17/94....... 4.850 40,000 40,000,000
(Agreement dated 10/19/94 to
be repurchased at
$40,156,277,
collateralized by
$41,400,000, Federal
National Mortgage
Association Notes 5.290%
due 07/28/97. The market
value is $40,882,500.)
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
PaineWebber Inc.
11/01/94...... 4.820% $ 98,800 $ 98,800,000
(Agreement dated 10/31/94
to be repurchased at
$98,813,228,
collateralized by
$8,411,100 Federal Farm
Credit Bank Strips,
5.375% to 5.470% due from
06/01/95 to 08/01/95;
$25,000,000 Federal Farm
Credit Bank Bonds 5.300%
due 07/05/95; $14,705,000
Federal National Mortgage
Association Discount
Notes 5.350% due
11/30/94; $6,993,000
Federal National Mortgage
Association Bonds 6.900%
to 8.050% due from
08/11/99 to 07/14/04;
$207,000 Federal Home
Loan Bank Floating Rate
Notes 6.500% to 7.000%
due 03/01/97; $43,014,900
Federal National Mortgage
Association Medium Term
Notes 6.150% to 6.870%
due 04/01/97 to 04/01/99
and $3,225,000 Student
Loan Marketing
Association Floating Rate
Notes 4.300% due
01/01/99. The market
value is $101,153,443.)
--------------
Total.................. 713,800,000
--------------
</TABLE>

FS-4
<PAGE> 70

FEDFUND PORTFOLIO
Statement of Net Assets (Concluded)

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
VALUE
--------------
<S> <C> <C>
TOTAL INVESTMENT IN SECURITIES
(Cost $1,694,762,846*)....... 100.1% $1,694,762,846
LIABILITIES IN EXCESS OF OTHER
ASSETS....................... (0.1) (1,431,349)
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
1,557,712,604 FedFund and
135,782,689 FedFund Dollar
shares of beneficial interest
outstanding)................. 100.0% $1,693,331,497
------ --------------
------ --------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($1,693,331,497 / 1,693,495,293)........ $1.00
-----
-----
</TABLE>

- ---------------
* Cost for federal income tax purposes.
+ Variable rate obligations--the rate shown is the rate as of October 31, 1994,
and the maturity date shown is the date the principal amount can be recovered
upon demand or put.

FEDFUND
Maturity Schedule of Portfolio
October 31, 1994

<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- -------------- ----------
<S> <C> <C>
1- 30 Days $1,287,470,000 75.7%
31- 60 Days 65,000,000 3.8
61- 90 Days 25,000,000 1.5
91-120 Days 89,000,000 5.2
Over 120 Days 233,835,000 13.8
</TABLE>

Average Weighted Maturity--41 Days

See accompanying notes to financial statements.

FS-5
<PAGE> 71

T-FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
U.S. GOVERNMENT
SECURITIES--23.7%
U.S. Treasury Bills
11/25/94...... 4.625% $ 30,000 $ 29,907,500
12/22/94...... 4.630 15,000 14,901,613
02/02/95...... 4.880 15,000 14,810,900
02/09/95...... 4.905 40,000 39,455,000
03/23/95...... 5.170 50,000 48,980,361
05/04/95...... 4.890 15,000 14,625,100
05/04/95...... 5.105 50,000 48,695,389
06/01/95...... 4.870 10,000 9,713,211
06/01/95...... 4.905 10,000 9,711,150
--------------
230,800,224
--------------
U.S. Treasury Notes
11/15/94...... 6.000 15,000 15,005,693
--------------
Total............................... 245,805,917
--------------
</TABLE>

<TABLE>
<S> <C> <C>
REPURCHASE AGREEMENTS--76.5%
Barclay De Zoete Wedd Limited
11/01/94...... 4.750 50,000 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,597,
collateralized by
$44,935,000 U.S. Treasury
Notes 7.250% to 11.625%
due from 08/15/03 to
05/15/16. The market
value is $50,941,469.)
B.T. Securities Corp.
11/01/94...... 4.770 25,000 25,000,000
(Agreement dated 10/31/94
to be repurchased at
$25,003,313,
collateralized by
$25,760,000 U.S. Treasury
Bills due 01/12/95. The
market value is
$25,000,080.)
Daiwa Securities America, Inc.
11/01/94...... 4.750 50,000 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,597,
collateralized by
$54,040,000 U.S. Treasury
Notes 7.250% due
05/15/16. The market
value is $51,056,992.)

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
Donaldson Lufkin & Jenrette
Securities Corp.
11/01/94...... 4.750% $ 50,000 $ 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,597,
collateralized by
$50,670,000 U.S. Treasury
Notes 4.250% to 7.875%
due from 12/31/95 to
07/15/96. The market
value is $51,015,589.)
First (The) Boston Corp.
11/15/94...... 4.820 40,000 40,000,000
(Agreement dated 08/22/94
to be repurchased at
$40,455,222,
collateralized by
$38,955,000 U.S. Treasury
Notes 8.125% due
08/15/21. The market
value is $40,820,945.)
11/23/94...... 4.770 40,000 40,000,000
(Agreement dated 08/25/94
to be repurchased at
$40,477,000,
collateralized by
$40,530,000 U.S. Treasury
Notes 6.250% due
04/30/99. The market
value is $40,801,551.)
Kidder, Peabody & Co., Inc.
11/01/94...... 4.780 100,000 100,000,000
(Agreement dated 10/31/94
to be repurchased at
$100,013,278
collateralized by
$99,290,000 U.S. Treasury
Bonds 8.00% due 11/15/21.
The market value is
$102,000,889.)
Lehman Government Securities, Inc.
11/01/94...... 4.750 50,000 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,597,
collateralized by
$50,955,000 U.S. Treasury
Notes 6.875% due
10/31/96. The market
value is $51,002,896.)
Merrill Lynch & Co., Inc.
11/01/94...... 4.800 50,000 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,667,
collateralized by
$51,000,000 U.S. Treasury
Notes 4.625% due
02/29/96. The market
value is $51,003,871.)
</TABLE>

FS-6
<PAGE> 72

T-FUND PORTFOLIO
Statement of Net Assets (Concluded)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
Morgan (J.P.) Securities, Inc.
11/04/94...... 4.800% $ 45,000 $ 45,000,000
(Agreement dated 10/04/94
to be repurchased at
$45,186,000,
collateralized by
$47,110,000 U.S. Treasury
Notes 4.250% to 7.500%
due from 07/31/95 to
11/15/16. The market
value is $45,901,700.)
Morgan Stanley & Co.
11/01/94...... 4.8125 109,608 109,608,000
(Agreement dated 10/31/94
to be repurchased at
$109,622,652
collateralized by
$112,343,000 U.S.
Treasury Notes 5.125% to
6.125% due from 03/31/96
to 07/31/96. The market
value is $111,835,639.)
Nikko Securities, Inc.
11/01/94...... 4.770 50,000 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,625,
collateralized by
$49,755,000 U.S. Treasury
Notes 7.500% due
11/15/01. The market
value is $51,008,826.)
Sanwa Bank BGK Securities
11/01/94...... 4.750 50,000 50,000,000
(Agreement dated 10/31/94
to be repurchased at
$50,006,597,
collateralized by
$49,830,000 U.S. Treasury
Notes 6.375% to 10.750%
due from 06/30/99 to
02/15/03. The market
value is $50,911,154.)
Smith Barney Inc.
12/30/94...... 5.200 60,000 60,000,000
(Agreement dated 10/06/94
to be repurchased at
$60,736,667,
collateralized by
$59,750,000 U.S. Treasury
Notes 7.500% to 8.875%
due from 11/15/01 to
08/15/17. The market
value is $61,723,125.)

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
Swiss Bank Corp.
11/01/94...... 4.800% $ 22,000 $ 22,000,000
(Agreement dated 10/31/94
to be repurchased at
$22,002,933,
collateralized by
$23,905,000 U.S. Treasury
Notes 6.375% to 7.500%
due from 05/15/02 to
08/15/02. The market
value is $22,502,714.)
--------------
Total............................. 791,608,000
--------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,037,413,917*)....... 100.2% 1,037,413,917
LIABILITIES IN EXCESS OF OTHER
ASSETS....................... (0.2) (2,242,255)
------ --------------
NET ASSETS (equivalent to $1.00
per share based on
1,013,033,991 T-Fund and
22,194,581 T-Fund Dollar
shares of beneficial interest
outstanding)................. 100.0% $1,035,171,662
------ --------------
------ --------------
NET ASSET VALUE, OFFERING AND
REDEMPTION
PRICE PER SHARE
($1,035,171,662 / 1,035,228,572)........ $1.00
-----
-----
</TABLE>

- ---------------
* Cost for federal income tax purposes.

T-FUND
Maturity Schedule of Portfolio
October 31, 1994

<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1- 30 Days $776,608,000 74.6%
31- 60 Days 75,000,000 7.2
91-120 Days 55,000,000 5.3
Over 120 Days 135,000,000 12.9
</TABLE>

Average Weighted Maturity--34 days

See accompanying notes to financial statements.

FS-7
<PAGE> 73

FEDCASH PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- ------- ------------
<S> <C> <C>
U.S. TREASURY NOTES--0.8%
12/31/94........ 4.625% $ 5,000 $ 5,008,540
------------
Total................................. 5,008,540
------------
AGENCY & INSTRUMENTALITY
OBLIGATIONS--62.2%
Federal Farm Credit
Bank Discount
Notes
01/13/95........ 5.030 10,000 9,898,003
03/06/95........ 4.950 10,000 9,828,125
04/25/95........ 5.600 10,000 9,727,778
------------
29,453,906
------------
Federal Home Loan
Bank Discount Notes
01/03/95........ 4.720 15,000 14,876,100
01/30/95........ 4.830 15,000 14,818,875
01/30/95........ 4.860 15,000 14,817,750
05/08/95........ 5.610 5,000 4,853,517
------------
49,366,242
------------
Federal Home Loan
Bank Variable Rate Notes+
11/01/94........ 4.800 10,000 9,996,396
10/20/95........ 4.780 10,000 9,992,447
------------
19,988,843
------------
Federal Home Loan
Mortgage Corporation
Discount Notes
12/30/94........ 4.800 10,000 9,921,333
------------
Federal National
Mortgage Association
Discount Notes
11/18/94........ 4.750 20,000 19,955,139
11/25/94........ 3.360 14,000 13,968,640
11/28/94........ 4.910 15,000 14,944,763
02/17/95........ 5.090 10,000 9,847,300
03/02/95........ 5.360 15,000 14,729,767
03/22/95........ 5.330 10,000 9,791,242
03/22/95........ 5.370 30,000 29,369,025
06/30/95........ 5.360 8,000 7,712,942
------------
120,318,818
------------
Federal National
Mortgage Association
Variable Rate Notes+
11/01/94........ 5.750 18,000 18,000,000
------------
Student Loan Marketing
Association
Discount Notes
12/02/94........ 4.740 15,000 14,938,775
------------

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- ------- ------------
<S> <C> <C>
Student Loan Marketing
Association
Variable Rate Notes+
11/01/94........ 5.380% $25,000 $ 25,009,882
11/01/94........ 5.390 10,000 10,008,807
11/01/94........ 5.400 10,000 10,000,000
11/01/94........ 5.420 10,000 10,000,000
11/01/94........ 5.430 7,545 7,551,516
11/01/94........ 5.510 30,000 30,017,051
11/01/94........ 5.560 28,450 28,521,557
11/01/94........ 5.585 17,000 17,052,394
11/01/94........ 5.610 5,000 5,011,468
------------
143,172,675
------------
Total................................. 405,160,592
------------
REPURCHASE AGREEMENTS--37.2%
Donaldson, Lufkin & Jenrette Securities Corp.
11/01/94........ 4.900 75,000 75,000,000
(Agreement dated 10/31/94 to
be repurchased at
$75,010,208, collateralized
by $187,787,778 Federal
National Mortgage
Association Strips due
12/01/21 to 10/01/24. The
market value is
$77,250,717.)
First (The) Boston Corp.
11/10/94........ 4.950 20,000 20,000,000
(Agreement dated 10/12/94 to
be repurchased at
$20,079,750, collateralized
by $21,935,000 Federal Home
Loan Mortgage Corporation
Adjustable Rate Mortgage
Bonds 4.117% due 06/01/24.
The market value is
$21,441,463.)
Greenwich Capital Markets, Inc.
11/01/94........ 4.900 30,000 30,000,000
(Agreement dated 10/31/94 to
be repurchased at
$30,004,083, collateralized
by $29,965,000 U.S. Treasury
Bonds 8.125% to 8.875% due
from 02/15/19 to 08/15/19.
The market value is
$30,600,932.)
</TABLE>

FS-8
<PAGE> 74

FEDCASH PORTFOLIO
Statement of Net Assets (Concluded)

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- ------- ------------
<S> <C> <C>
PaineWebber, Inc.
11/01/94........ 4.820% $17,800 $ 17,800,000
(Agreement dated 10/31/94
to be repurchased at
$17,802,383, collateralized
by $18,420,000 Federal
National Mortgage
Association Discount Notes
5.350% due 11/30/94. The
market value is
$18,337,111.)
------------
Total............................... 242,800,000
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $652,969,132*)............ 100.2% 652,969,132
LIABILITIES IN EXCESS OF
OTHER ASSETS.................... (0.2) (1,022,965)
------ ------------
NET ASSETS (Equivalent to $1.00
per share based on 629,261,242
FedCash and 22,742,508 FedCash
Dollar shares of beneficial
interest outstanding)........... 100.0% $651,946,167
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($651,946,167 / 652,003,750).............. $1.00
-----
-----
</TABLE>

- ---------------
* Cost for federal income tax purposes.
+ Variable Rate Obligations--The rate shown is the rate as
of October 31, 1994, and the maturity date is the date
the principal amount can be received upon demand or put.

FEDCASH
Maturity Schedule of Portfolio
October 31, 1994

<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1- 30 Days $462,795,000 70.6%
31- 60 Days 25,000,000 3.8
61- 90 Days 30,000,000 4.6
91-120 Days 40,000,000 6.1
Over 120 Days 98,000,000 14.9
</TABLE>

Average Weighted Maturity--39 days

See accompanying notes to financial statements.

FS-9
<PAGE> 75

T-CASH PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- ------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES--23.5%
U.S. Treasury Bills
11/17/94....... 4.770% $ 5,000 $ 4,989,400
11/17/94....... 4.810 5,000 4,989,311
11/25/94....... 4.625 10,000 9,969,167
02/09/95....... 4.905 15,000 14,795,625
02/09/95....... 4.950 10,000 9,862,500
06/01/95....... 4.905 3,000 2,913,345
08/24/95....... 5.355 10,000 9,559,700
------------
57,079,048
------------
U.S. Treasury Notes
11/15/94....... 6.000 10,000 10,003,795
02/28/95....... 3.875 5,000 4,981,674
------------
14,985,469
------------
Total................................. 72,064,517
------------
REPURCHASE AGREEMENTS--76.7%
B.T. Securities Corp.
11/01/94....... 4.770 8,000 8,000,000
(Agreement dated 10/31/94 to
be repurchased at
$8,001,060, collateralized
by $8,245,000 U.S. Treasury
Bills 8.500% due 01/12/95.
The market value is
$8,001,773.)
Barclay De Zoete Wedd Limited
11/01/94....... 4.750 16,000 16,000,000
(Agreement dated 10/31/94 to
be repurchased at
$16,002,111, collateralized
by $13,285,000 U.S.
Treasury Notes 10.375% due
11/15/12. The market value
is $16,331,251.)
Daiwa Securities America, Inc.
11/01/94....... 4.750 16,000 16,000,000
(Agreement dated 10/31/94 to
be repurchased at
$16,002,111, collateralized
by $17,740,000 U.S.
Treasury Notes 7.250% due
08/15/22. The market value
is $16,350,958.)

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- ------------
<S> <C> <C>
Donaldson, Lufkin & Jenrette
Securities, Inc.
11/01/94....... 4.750% $ 16,000 $ 16,000,000
(Agreement dated 10/31/94 to
be repurchased at
$16,002,111, collateralized
by $16,299,000 U.S.
Treasury Notes 3.875% due
02/28/95. The market value
is $16,326,708.)
First (The) Boston Corp.
11/15/94....... 4.820 15,000 15,000,000
(Agreement dated 08/22/94 to
be repurchased at
$15,170,708, collateralized
by $13,205,000 U.S.
Treasury Notes 9.250% due
02/15/16. The market value
is $15,309,877.)
11/23/94....... 4.770 15,000 15,000,000
(Agreement dated 08/25/94 to
be repurchased at
$15,178,875, collateralized
by $15,200,000 U.S.
Treasury Notes 6.500% due
04/30/99. The market value
is $15,301,840.)
J.P. Morgan Securities
11/04/94....... 4.800 20,000 20,000,000
(Agreement dated 10/04/94 to
be repurchased at
$20,082,667, collateralized
by $20,529,000 U.S.
Treasury Notes 4.250% due
07/31/95. The market value
is $20,399,667.)
Kidder, Peabody & Co., Inc.
11/01/94....... 4.780 30,000 30,000,000
(Agreement dated 10/31/94 to
be repurchased at
$30,003,983, collateralized
by $24,815,000 U. S.
Treasury Bonds 10.750% due
05/15/03. The market value
is $30,600,346.)
</TABLE>

FS-10
<PAGE> 76

T-CASH PORTFOLIO
Statement of Net Assets (Concluded)

<CAPTION>
VALUE
------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $307,769,517*)........... 100.2% $307,769,517
LIABILITIES IN EXCESS OF OTHER
ASSETS......................... (0.2) (566,353)
------ ------------
NET ASSETS (equivalent to $1.00
per share based on 217,915,135
T-Cash and 89,291,139 T-Cash
Dollar shares of beneficial
interest outstanding).......... 100.0% $307,203,164
------ ------------
------ ------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($307,203,164 / 307,206,274).............. $1.00
</TABLE>

- ---------------
* Cost for federal income tax purposes.

T-CASH
Maturity Schedule of Portfolio
October 31, 1994

<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1- 30 Days $245,705,000 79.6%
31- 60 Days 20,000,000 6.5
91-120 Days 30,000,000 9.7
Over 120 Days 13,000,000 4.2

</TABLE>
Average Weighted Maturity--29 days

See accompanying notes to financial statements.

FS-11
<PAGE> 77

FEDERAL TRUST FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- ------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES-- 0.2%
U.S. Treasury Bills
11/03/94...... 4.440% $ 68 $ 67,983
11/10/94...... 4.510 677 676,237
------------
Total................................ 744,220
------------
AGENCY AND INSTRUMENTALITY
OBLIGATIONS -- 100.0%
Federal Farm Credit Bank
Discount Notes
11/01/94...... 4.800 440 440,000
11/03/94...... 4.830 900 899,759
11/03/94...... 4.870 2,100 2,099,432
11/04/94...... 4.900 1,875 1,874,234
11/07/94...... 4.830 660 659,469
11/09/94...... 4.800 5,000 4,994,667
11/18/94...... 4.780 4,000 3,990,971
11/22/94...... 4.740 1,350 1,346,267
11/22/94...... 4.750 1,650 1,645,428
11/28/94...... 4.780 5,000 4,982,075
11/30/94...... 4.780 2,975 2,963,545
12/02/94...... 4.950 10,000 9,957,375
12/05/94...... 4.900 10,000 9,953,722
12/12/94...... 4.740 4,125 4,102,732
12/12/94...... 4.760 4,650 4,624,792
12/14/94...... 4.740 555 551,858
12/19/94...... 4.600 6,480 6,440,256
12/20/94...... 4.600 5,000 4,968,694
12/20/94...... 4.630 5,000 4,968,490
12/29/94...... 4.700 2,350 2,332,205
01/09/95...... 5.100 5,000 4,951,125
01/19/95...... 5.140 8,000 7,909,764
02/15/95...... 4.980 5,000 4,926,683
------------
91,583,543
------------
Federal Home Loan Bank
Discount Notes
11/07/94...... 4.940% 5,000 4,995,883
11/10/94...... 4.700 2,320 2,317,274
11/18/94...... 4.740 4,220 4,210,554
11/21/94...... 4.710 5,900 5,884,562
11/25/94...... 4.730 7,000 6,977,927
11/25/94...... 4.880 4,215 4,201,287
11/28/94...... 4.790 5,000 4,982,038

<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- ------------
<S> <C> <C>
12/09/94...... 4.720% $ 4,280 $ 4,258,676
12/09/94...... 4.730 7,335 7,298,378
12/12/94...... 4.740 5,000 4,973,008
12/15/94...... 4.800 10,000 9,941,333
12/15/94...... 4.920 5,000 4,969,933
12/29/94...... 4.780 6,000 5,953,793
01/23/95...... 4.810 5,000 4,944,551
02/10/95...... 4.970 5,000 4,930,282
------------
80,839,479
------------
Federal Home Loan Bank Variable
Rate Notes+
11/01/94...... 4.800 25,000 24,990,991
------------
Student Loan Marketing
Association
Discount Notes
12/14/94...... 4.800 5,000 4,971,333
12/15/94...... 4.870 4,000 3,976,191
------------
8,947,524
------------
Student Loan Marketing
Association
Variable Rate Notes+
11/01/94...... 5.610 5,000 5,021,140
11/01/94...... 5.380 5,000 4,997,169
11/01/94...... 5.390 16,360 16,383,404
11/01/94...... 5.410 30,000 30,000,000
11/01/94...... 5.510 6,640 6,649,916
11/01/94...... 5.585 5,000 5,011,252
11/01/94...... 5.810 6,060 6,067,859
------------
74,130,740
------------
Tennessee Valley Authority
Notes
11/01/94...... 4.690 3,420 3,420,000
11/01/94...... 4.700 280 280,000
11/02/94...... 4.800 2,000 1,999,733
11/02/94...... 4.900 9,850 9,848,659
11/28/94...... 4.790 5,000 4,982,038
12/02/94...... 4.900 10,000 9,957,806
12/06/94...... 5.000 5,000 4,975,695
12/09/94...... 4.920 10,000 9,948,067
------------
45,411,998
------------
Total................................ 325,904,275
------------
</TABLE>

FS-12
<PAGE> 78

FEDERAL TRUST FUND PORTFOLIO
Statement of Net Assets (Concluded)

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
VALUE
------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $326,648,495*).......... 100.2% $326,648,495
LIABILITIES IN EXCESS OF
OTHER ASSETS.................. (0.2) (601,060)
------ ------------
NET ASSETS (Equivalent to $1.00
per share based on 317,928,045
Federal Trust and 8,279,970
Federal Trust Dollar shares of
beneficial interest
outstanding).................. 100.0% $326,047,435
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SHARE
($326,047,435 / 326,208,015)............. $1.00
</TABLE>

- ---------------
* Cost for federal income tax purposes is $326,655,858.
+ Variable Rate Obligations--the rate shown is the rate as
of October 31, 1994, and the maturity date is the date
the principal amount can be recovered upon demand or put.

FEDERAL TRUST FUND
Maturity Schedule of Portfolio
October 31, 1994
<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1- 30 Days $179,960,000 54.9%
31- 60 Days 119,775,000 36.5%
61- 90 Days 18,000,000 5.5%
Over 90 Days 10,000,000 3.1%
</TABLE>

Average Weighted Maturity--27 days

See accompanying notes to financial statements.

FS-13
<PAGE> 79

TREASURY TRUST FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- -------- --------------
<S> <C> <C>
U.S. GOVERNMENT
SECURITIES--98.6%
U.S. Treasury Bills
11/10/94..... 4.470% $ 2,739 $ 2,735,939
11/10/94..... 4.500 10,000 9,988,750
11/17/94..... 4.550 35,000 34,929,222
12/08/94..... 4.475 9,095 9,053,169
12/08/94..... 4.625 38,086 37,904,959
12/22/94..... 4.715 10,585 10,514,297
12/22/94..... 4.770 50,000 49,662,126
12/22/94..... 4.785 15,000 14,898,319
12/22/94..... 4.790 50,000 49,660,708
12/22/94..... 4.800 40,000 39,728,000
12/22/94..... 4.835 75,000 74,486,281
12/22/94..... 4.870 2,358 2,341,732
01/19/95..... 4.760 50,000 49,477,722
01/19/95..... 5.005 50,000 49,450,840
01/26/95..... 4.975 50,000 49,405,764
--------------
484,237,828
--------------
U.S. Treasury Notes
11/15/94..... 6.000 129,500 129,559,963
11/15/94..... 8.250 94,125 94,248,774
11/15/94..... 10.125 131,060 131,319,804
11/15/94..... 11.625 117,600 117,900,682
11/30/94..... 4.625 50,000 49,993,293
12/31/94..... 4.625 124,530 124,424,534
12/31/94..... 7.625 50,000 50,194,530
--------------
697,641,580
--------------

<CAPTION>
VALUE
--------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,181,879,408*)....... 98.6% $1,181,879,408
OTHER ASSETS IN EXCESS OF
LIABILITIES.................. 1.4 16,689,474
NET ASSETS (equivalent to $1.00
per share based on
1,016,866,555 Treasury Trust
and 181,971,046 Treasury
Trust Dollar shares of
beneficial interest
outstanding)................. 100.0% $1,198,568,882
NET ASSET VALUE, OFFERING
AND REDEMPTION
PRICE PER SHARE
($1,198,568,882 /
1,198,837,601).......................... $1.00
</TABLE>

- ---------------
* Cost for federal income tax purposes.

TREASURY TRUST FUND
Maturity Schedule of Portfolio
October 31, 1994

<TABLE>
<CAPTION>
MATURITY
PERIOD PAR PERCENTAGE
------------- ------------ ----------
<S> <C> <C>
1-30 Days $570,024,000 48.1%
31-60 Days 290,124,000 24.5
61-90 Days 324,530,000 27.4
</TABLE>

Average Weighted Maturity--39 days

See accompanying notes to financial statements.

FS-14
<PAGE> 80

SHORT GOVERNMENT FUND PORTFOLIO
Trust for Federal Securities
Statement of Net Assets

October 31, 1994
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
DISCOUNT RATE
OR PAR
COUPON RATE (000) VALUE
------------- ------ ----------
<S> <C> <C>
U.S. TREASURY NOTES--45.3%
01/15/95............ 8.625% $ 500 $ 503,430
11/15/95............ 8.500 450 460,147
03/31/96............ 7.750 1,000 1,016,840
10/15/98............ 7.125 250 248,675
----------
Total (Cost $2,232,735)......... 2,229,092
----------
AGENCY & INSTRUMENTALITY
OBLIGATIONS--50.7%
Federal Home Loan Bank Notes
03/27/95............ 7.875 500 504,145
05/24/99............ 7.040 500 489,145
----------
993,290
----------
Federal Home Loan Mortgage
Corporation Bonds
04/15/99............ 7.500 500 498,781
----------
Federal National Mortgage Association
Discount Notes
11/01/94............ 4.690 500 500,000
----------
Federal National Mortgage
Association Notes
06/17/99............ 6.310 500 499,256
----------
Total (Cost $2,507,467)......... 2,491,327
----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $4,740,202*).................. 96.0% $4,720,419
OTHER ASSETS IN EXCESS OF
LIABILITIES......................... 4.0 197,179
NET ASSETS (Equivalent to $9.28 per
share based on 89,311 Short
Government and 440,438 Short
Government Dollar shares of
beneficial interest outstanding).... 100.0% $4,917,598
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
($4,917,598 / 529,749).............. $9.28
</TABLE>

- ---------------
* Cost for federal income tax purposes is $4,742,541. The
aggregate unrealized depreciation for all securities is as
follows.
Excess of tax cost over value................ $(22,122)

SHORT GOVERNMENT FUND
Maturity of Portfolio
October 31, 1994

Average Weighted Maturity--2.11 years

See accompanying notes to financial statements.

FS-15
<PAGE> 81

TRUST FOR FEDERAL SECURITIES
Statements of Operations
Year Ended October 31, 1994

<TABLE>
<CAPTION>
FEDERAL TREASURY
TRUST TRUST
FEDFUND T-FUND FEDCASH T-CASH FUND FUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ----------- -----------
Investment Income:
<S> <C> <C> <C> <C> <C> <C>
Interest income......................... $53,696,867 $44,393,192 $24,458,141 $16,309,460 $11,831,680 $51,213,480
----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Investment advisory fee................. 1,732,574 1,474,559 790,883 559,416 373,008 1,740,663
Administration fee...................... 1,732,574 1,474,559 790,883 559,416 373,008 1,740,663
Trustees' fees and officer's salary..... 25,608 22,025 11,807 8,384 5,505 25,983
Transfer agent fee...................... 189,439 81,291 23,192 25,305 36,244 133,142
Custodian fee........................... 220,443 202,087 130,951 100,276 71,103 220,900
Shareholder computer access program..... 37,698 32,701 6,866 5,753 3,368 36,447
Legal and audit......................... 47,627 40,760 21,841 15,461 10,272 48,086
Organization expense.................... 0 0 5,161 5,209 9,158 5,366
Registration fees and expenses.......... 21,150 10,520 19,760 19,174 20,177 20,007
Printing................................ 12,482 10,946 6,454 6,252 4,247 14,876
Other................................... 50,081 48,157 11,511 15,278 15,511 47,056
----------- ----------- ----------- ----------- ----------- -----------
4,069,676 3,397,605 1,819,309 1,319,924 921,601 4,033,189
Service Organization fees--Dollar
shares................................ 308,757 45,095 100,915 265,700 7,882 465,117
----------- ----------- ----------- ----------- ----------- -----------
4,378,433 3,442,700 1,920,224 1,585,624 929,483 4,498,306
Less fees waived........................ (1,615,628) (1,310,068) (1,093,063) (819,786) (394,224) (1,569,441)
----------- ----------- ----------- ----------- ----------- -----------
Total expenses........................ 2,762,805 2,132,632 827,161 765,838 535,259 2,928,865
----------- ----------- ----------- ----------- ----------- -----------
Net investment income................... 50,934,062 42,260,560 23,630,980 15,543,622 11,296,421 48,284,615
----------- ----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments:
Net realized gain (loss) from security
transactions.......................... (69,818) 24,931 (6,709) 10,453 (71,784) (184,663)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations....................... $50,864,244 $42,285,491 $23,624,271 $15,554,075 $11,224,637 $48,099,952
=========== =========== =========== =========== =========== ===========
</TABLE>

See accompanying notes to financial statements.

FS-16
<PAGE> 82

TRUST FOR FEDERAL SECURITIES
Statements of Operations
Year Ended October 31, 1994

<TABLE>
<CAPTION>
SHORT
GOVERNMENT
FUND
PORTFOLIO
----------
<S> <C>
Investment Income:
Interest income....................................................................... $372,234
--------
Expenses:
Investment advisory fee............................................................... 13,299
Administration fee.................................................................... 13,299
Trustees' fees and officer's salary................................................... 166
Transfer agent fee.................................................................... 2,077
Custodian fee......................................................................... 4,376
Legal and audit....................................................................... 284
Registration fees and expenses........................................................ 17,240
Printing.............................................................................. 5,435
Other................................................................................. 726
--------
56,902
Service Organization fees--Dollar shares.............................................. 13,989
--------
70,891
Less fees waived and expenses reimbursed.............................................. (30,305)
--------
Total expenses...................................................................... 40,586
--------
Net investment income................................................................. 331,648
--------
Realized and unrealized gain (loss) on investments:
Net realized loss from security transactions.......................................... (132,747)
Change in unrealized appreciation of investments...................................... (226,735)
--------
Net loss on investments............................................................... (359,482)
--------
Net decrease in net assets resulting from operations.................................. $(27,834)
========
</TABLE>

See accompanying notes to financial statements.

FS-17
<PAGE> 83

TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
FEDFUND PORTFOLIO T-FUND PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993 OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............................ $ 50,934,062 $ 53,299,898 $ 42,260,560 $ 39,730,518
Net gain (loss) on investments................... (69,818) (93,978) 24,931 (81,841)
---------------- ---------------- ---------------- ----------------
Net increase in net assets resulting from
operations..................................... 50,864,244 53,205,920 42,285,491 39,648,677
---------------- ---------------- ---------------- ----------------
Distributions to shareholders:
From net investment income:
FedFund shares................................. (46,624,473) (49,659,695) -- --
FedFund Dollar shares.......................... (4,309,589) (3,640,203) -- --
T-Fund shares.................................. -- -- (41,643,869) (39,458,611)
T-Fund Dollar shares........................... -- -- (616,691) (271,907)
From net realized gains:
FedFund shares................................. -- (108,308) -- --
FedFund Dollar shares.......................... -- (5,798) -- --
---------------- ---------------- ---------------- ----------------
Total distributions to shareholders.......... (50,934,062) (53,414,004) (42,260,560) (39,730,518)
---------------- ---------------- ---------------- ----------------
Capital share transactions (at $1 per share):
Sale of shares................................... 20,324,163,439 23,526,843,983 10,514,363,640 11,562,455,722
Reinvestment of dividends........................ 9,062,973 9,248,522 8,945,390 7,831,656
Repurchase of shares............................. (20,100,673,406) (25,200,353,376) (10,863,024,585) (11,528,001,611)
---------------- ---------------- ---------------- ----------------
Increase (decrease) in net assets derived from
capital share transactions..................... 232,553,006 (1,664,260,871) (339,715,555) 42,285,767
---------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets...... 232,483,188 (1,664,468,955) (339,690,624) 42,203,926
Net assets:
Beginning of period................................ 1,460,848,309 3,125,317,264 1,374,862,286 1,332,658,360
---------------- ---------------- ---------------- ----------------
End of period...................................... $ 1,693,331,497 $ 1,460,848,309 $ 1,035,171,662 $ 1,374,862,286
================ ================ ================ ================
</TABLE>

See accompanying notes to financial statements.

FS-18

<PAGE> 84

TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
FEDCASH T-CASH
PORTFOLIO PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993 OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ---------------- ---------------- ----------------
Increase (decrease) in net assets:
<S> <C> <C> <C> <C>
Operations:
Net investment income............................ $ 23,630,980 $ 16,488,878 $ 15,543,622 16,927,589
Net gain (loss) on investments................... (6,709) (50,874) 10,453 (13,563)
--------------- --------------- --------------- ---------------
Net increase in net assets resulting from
operations..................................... 23,624,271 16,438,004 15,554,075 16,914,026
--------------- --------------- --------------- ---------------
Distributions to shareholders:
From net investment income:
FedCash shares................................. (22,236,307) (14,559,669) -- --
FedCash Dollar shares.......................... (1,394,673) (1,929,209) -- --
T-Cash shares.................................. -- -- (11,980,470) (15,024,913)
T-Cash Dollar shares........................... -- -- (3,563,152) (1,902,676)
From net realized gains:
FedCash shares................................. -- (11,761) -- --
FedCash Dollar shares.......................... -- (1,386) -- --
--------------- --------------- --------------- ---------------
Total distributions to shareholders.......... (23,630,980) (16,502,025) (15,543,622) (16,927,589)
--------------- --------------- --------------- ---------------
Capital share transactions (at $1 per share):
Sale of shares................................... 6,586,200,619 6,515,247,570 3,494,135,508 4,034,594,005
Reinvestment of dividends........................ 8,312,109 4,679,113 3,229,181 3,036,140
Repurchase of shares............................. (6,449,348,793) (6,784,877,551) (3,775,988,923) (3,953,659,674)
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets derived from
capital share transactions..................... 145,163,935 (264,950,868) (278,624,234) 83,970,471
--------------- --------------- --------------- ---------------
Total increase (decrease) in net assets...... 145,157,226 (265,014,889) (278,613,781) 83,956,908
Net assets:
Beginning of period................................ 506,788,941 771,803,830 585,816,945 501,860,037
--------------- --------------- --------------- ---------------
End of period...................................... $ 651,946,167 $ 506,788,941 $ 307,203,164 $ 585,816,945
=============== =============== =============== ===============
</TABLE>

See accompanying notes to financial statements.

FS-19
<PAGE> 85

TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
FEDERAL TRUST TREASURY TRUST
FUND PORTFOLIO FUND PORTFOLIO
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993 OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ---------------- ---------------- ----------------
Increase (decrease) in net assets:
<S> <C> <C> <C> <C>
Operations:
Net investment income............................ $ 11,296,421 $ 11,083,277 $ 48,284,615 $ 45,181,276
Net loss on investments.......................... (71,784) (63,460) (184,663) (52,959)
---------------- ---------------- ---------------- ----------------
Net increase in net assets resulting from
operations..................................... 11,224,637 11,019,817 48,099,952 45,128,317
---------------- ---------------- ---------------- ----------------
Distributions to shareholders:
From net investment income:
Federal Trust shares........................... (11,168,689) (11,005,479) -- --
Federal Trust Dollar shares.................... (127,732) (77,798) -- --
Treasury Trust shares.......................... -- -- (42,229,885) (40,045,868)
Treasury Trust Dollar shares................... -- -- (6,054,730) (5,135,408)
From net realized gains:
Federal Trust shares........................... -- (27,793) -- --
Federal Trust Dollar shares.................... -- (161) -- --
Treasury Trust shares.......................... -- -- (6,557) (3,989)
Treasury Trust Dollar shares................... -- -- (1,220) (515)
---------------- ---------------- ---------------- ----------------
Total distributions to shareholders.......... (11,296,421) (11,111,231) (48,292,392) (45,185,780)
---------------- ---------------- ---------------- ----------------
Capital share transactions (at $1 per share):
Sale of shares................................... 3,224,796,906 3,003,073,377 7,688,786,462 9,302,817,012
Reinvestment of dividends........................ 2,840,411 1,433,506 11,595,449 12,237,109
Repurchase of shares............................. (3,159,667,718) (3,177,072,598) (7,948,238,689) (9,638,888,666)
---------------- ---------------- ---------------- ----------------
Increase (decrease) in net assets derived from
capital share transactions..................... 67,969,599 (172,565,715) (247,856,778) (323,834,545)
---------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets...... 67,897,815 (172,657,129) (248,049,218) (323,892,008)
Net assets:
Beginning of period.............................. 258,149,620 430,806,749 1,446,618,100 1,770,510,108
---------------- ---------------- ---------------- ----------------
End of period.................................... $ 326,047,435 $ 258,149,620 $ 1,198,568,882 $ 1,446,618,100
================ ================ ================ ================
</TABLE>

See accompanying notes to financial statements.

FS-20
<PAGE> 86

TRUST FOR FEDERAL SECURITIES
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
SHORT
GOVERNMENT
FUND PORTFOLIO
-----------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ----------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income................................................................... $ 331,648 $ 459,809
Net gain (loss) on investments.......................................................... (359,482) 122,130
---------------- ----------------
Net increase (decrease) in net assets resulting from operations......................... (27,834) 581,939
---------------- ----------------
Distributions to shareholders:
From net investment income:
Short Government shares............................................................... (55,662) (243,699)
Short Government Dollar shares........................................................ (275,986) (216,110)
From net realized gains:
Short Government shares............................................................... (67,302) --
Short Government Dollar shares........................................................ (359,354) --
---------------- ----------------
Total distributions to shareholders................................................. (758,304) (459,809)
---------------- ----------------
Capital share transactions:
Sale of shares.......................................................................... 22,233,001 17,945,163
Reinvestment of dividends............................................................... 70,596 302
Repurchase of shares.................................................................... (22,716,105) (25,605,174)
---------------- ----------------
Decrease in net assets derived from capital share transactions.......................... (412,508) (7,659,709)
---------------- ----------------
Total decrease in net assets........................................................ (1,198,646) (7,537,579)
Net assets:
Beginning of period....................................................................... 6,116,244 13,653,823
---------------- ----------------
End of period............................................................................. $ 4,917,598 $ 6,116,244
================ ================
</TABLE>

See accompanying notes to financial statements.

FS-21
<PAGE> 87

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)

<TABLE>
<CAPTION>
FEDFUND SHARES
--------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations:
Net Investment Income............................ .0377 .0308 .0397 .0637 .0800
Net Capital Gains................................ -- .0001 .0010 -- --
---------- ---------- ---------- ---------- ----------
Total From Investment Operations............... .0377 .0309 .0407 .0637 .0800
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income............................ (.0377) (.0308) (.0397) (.0637) (.0800)
Net Capital Gains................................ -- (.0001) (.0010) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions............................ (.0377) (.0309) (.0407) (.0637) (.0800)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return....................................... 3.84% 3.12% 4.15% 6.56% 8.29%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................... $1,557,562 $1,290,971 $2,976,954 $1,918,966 $1,488,141
Ratios of Expenses to Average Net Assets........... .18%(1) .20%(1) .27% .30% .30%(1)
Ratios of Net Investment Income to
Average Net Assets............................... 3.76% 3.08% 3.91% 6.36% 8.00%
</TABLE>

<TABLE>
<CAPTION>
FEDFUND DOLLAR SHARES
--------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- -------
Income From Investment Operations:
Net Investment Income............................ .0352 .0283 .0372 .0612 .0775
Net Capital Gains................................ -- .0001 .0010 -- --
-------- -------- -------- ------- -------
Total From Investment Operations............... .0352 .0284 .0382 .0612 .0775
-------- -------- -------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income............................ (.0352) (.0283) (.0372) (.0612) (.0775)
Net Capital Gains................................ -- (.0001) (.0010) -- --
-------- -------- -------- ------- -------
Total Distributions............................ (.0352) (.0284) (.0382) (.0612) (.0775)
-------- -------- -------- ------- -------
Net Asset Value, End of Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ======== ========
Total Return....................................... 3.59% 2.87% 3.90% 6.31% 8.04%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................... $135,769 $169,877 $148,363 $62,842 $19,815
Ratios of Expenses to Average Net Assets........... .43%(1) .45%(1) .52% .55% .55%(1)
Ratios of Net Investment Income to
Average Net Assets............................... 3.51% 2.83% 3.66% 6.11% 7.75%
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .30%, .27% and .34%
for the years ended October 31, 1994, 1993 and 1990, respectively, for
FedFund shares and .55%, .52% and .59%, for the years ended October 31,
1994, 1993 and 1990, respectively, for FedFund Dollar shares.

See accompanying notes to financial statements.

FS-22
<PAGE> 88

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)

<TABLE>
<CAPTION>
T-FUND SHARES
--------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations:
Net Investment Income............................... .0368 .0303 .0392 .0626 .0799
---------- ---------- ---------- ---------- ----------
Total From Investment Operations.................. .0368 .0303 .0392 .0626 .0799
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income............................... (.0368) (.0303) (.0392) (.0626) (.0799)
---------- ---------- ---------- ---------- ----------
Total Distributions............................... (.0368) (.0303) (.0392) (.0626) (.0799)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return.......................................... 3.75% 3.07% 3.99% 6.44% 8.29%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)...................... $1,035,172 $1,361,624 $1,327,743 $1,592,750 $1,497,476
Ratios of Expenses to Average Net Assets.............. .18%(1) .20%(1) .28% .30% .30%(1)
Ratios of Net Investment Income to
Average Net Assets.................................. 3.65% 3.03% 3.93% 6.26% 7.99%
</TABLE>

<TABLE>
<CAPTION>
T-FUND DOLLAR SHARES
-------------------------------------------------
YEAR ENDED OCTOBER 31,
-------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ------- -------
Income From Investment Operations:
Net Investment Income............................... .0343 .0278 .0367 .0601 .0774
-------- -------- ------- ------- -------
Total From Investment Operations.................. .0343 .0278 .0367 .0601 .0774
-------- -------- ------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income............................... (.0343) (.0278) (.0367) (.0601) (.0774)
-------- -------- ------- ------- -------
Total Distributions............................... (.0343) (.0278) (.0367) (.0601) (.0774)
-------- -------- ------- ------- -------
Net Asset Value, End of Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ========
Total Return.......................................... 3.50% 2.82% 3.74% 6.19% 8.04%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)...................... $22,195 $13,328 $ 4,915 $40,372 $27,116
Ratios of Expenses to Average Net Assets.............. .43%(1) .45%(1) .53% .55% .55%(1)
Ratios of Net Investment Income to
Average Net Assets.................................. 3.40% 2.78% 3.68% 6.01% 7.74%
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees, the ratios of
expenses to average daily net assets would have been .29%, .28% and .34%,
respectively, for each of the years ended October 31, 1994, 1993 and 1990
for T-Fund Shares and .54%, .53% and .59%, respectively, for each of the
years ended October 31, 1994, 1993 and 1990 for T-Fund Dollar shares.

See accompanying notes to financial statements.

FS-23
<PAGE> 89

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
FEDCASH DOLLAR
FEDCASH SHARES SHARES
------------------------------------------------------ --------------
MAY 21,
1991(3)
YEAR ENDED YEAR ENDED YEAR ENDED TO YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1994 1993 1992 1991 1994
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ -------
Income From Investment Operations:
Net Investment Income..................... .0382 .0316 .0433 .0266 .0357
Net Capital Gains......................... -- -- .0012 -- --
------------ ------------ ------------ ------------ -------
Total From Investment Operations........ .0382 .0316 .0445 .0266 .0357
------------ ------------ ------------ ------------ -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income..................... (.0382) (.0316) (.0433) (.0266) (.0357)
Net Capital Gains......................... -- -- (.0012) -- --
------------ ------------ ------------ ------------ -------
Total Distributions..................... (.0382) (.0316) (.0445) (.0266) (.0357)
------------ ------------ ------------ ------------ -------
Net Asset Value, End of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ =============
Total Return............................... 3.89% 3.20% 4.54% 2.69% 3.64%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)........... $629,209 $447,942 $717,978 $290,558 $ 22,737
Ratios of Expenses to Average Net
Assets(1)................................. .12% .10% .07% .00%(2) .37%
Ratios of Net Investment Income to
Average Net Assets........................ 3.80% 3.16% 3.99% 5.80%(2) 3.55%

FEDCASH DOLLAR
SHARES
----------------------------------
DECEMBER 13,
1991(4)
YEAR ENDED TO
OCTOBER 31, OCTOBER 31,
1993 1992
-------------- ------------------
<S> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.00 $ 1.00
------- -------
Income From Investment Operations:
Net Investment Income..................... .0291 .0349
Net Capital Gains......................... -- .0012
------- -------
Total From Investment Operations........ .0291 .0361
------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income..................... (.0291) (.0349)
Net Capital Gains......................... -- (.0012)
------- -------
Total Distributions..................... (.0291) (.0361)
------- -------
Net Asset Value, End of Period............. $ 1.00 $ 1.00
========= =========
Total Return............................... 2.95% 3.67%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)........... $ 58,847 $ 53,813
Ratios of Expenses to Average Net
Assets(1)................................. .35% .32%(2)
Ratios of Net Investment Income to
Average Net Assets........................ 2.91% 3.66%(2)
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees and without expense
reimbursements, the ratio of expenses to average daily net assets for
FedCash shares would have been .29%, .28% and .29%, respectively, for each
of the years ended October 31, 1994, 1993 and 1992, and .39% (annualized)
for the period ended October 31, 1991, and for FedCash Dollar shares would
have been .54% and .53%, respectively for each of years ended October 31,
1994, 1993 and .54% (annualized) for the period ended October 31, 1992.
(2) Annualized.
(3) Commencement of operations.
(4) First issuance of shares.

See accompanying notes to financial statements.

FS-24
<PAGE> 90

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
T-CASH DOLLAR
T-CASH SHARES SHARES
----------------------------------------------------------- --------------
JUNE 5,
1991(3)
YEAR ENDED YEAR ENDED YEAR ENDED TO YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1994 1993 1992 1991 1994
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- ------------- -------
Income From Investment Operations:
Net Investment Income..................... .0371 .0311 .0406 .0235 .0346
------------- ------------- ------------- ------------- -------
Total From Investment Operations........ .0371 .0311 .0406 .0235 .0346
------------- ------------- ------------- ------------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income..................... (.0371) (.0311) (.0406) (.0235) (.0346)
------------- ------------- ------------- ------------- -------
Total Distributions..................... (.0371) (.0311) (.0406) (.0235) (.0346)
------------- ------------- ------------- ------------- -------
Net Asset Value, End of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= ============
Total Return............................... 3.77% 3.15% 4.13% 2.38% 3.52%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)........... $217,910 $424,641 $477,599 $301,526 $ 82,293
Ratios of Expenses to Average Net
Assets(1)................................. .11% .10% .06% .00%(2) .36%
Ratios of Net Investment Income to
Average Net Assets........................ 3.58% 3.11% 3.99% 5.70%(2) 3.33%

T-CASH DOLLAR
SHARES
----------------------------------
AUGUST 4,
1992(4)
YEAR ENDED TO
OCTOBER 31, OCTOBER 31,
1993 1992
-------------- ------------------
<S> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.00 $ 1.00
------------- -------
Income From Investment Operations:
Net Investment Income..................... .0286 .0080
------------- -------
Total From Investment Operations........ .0286 .0080
------------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income..................... (.0286) (.0080)
------------- -------
Total Distributions..................... (.0286) (.0080)
------------- -------
Net Asset Value, End of Period............. $ 1.00 $ 1.00
============= ===============
Total Return............................... 2.90% .76%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)........... $161,176 $ 24,261
Ratios of Expenses to Average Net
Assets(1)................................... .35% .35%(2)
Ratios of Net Investment Income to
Average Net Assets........................ 2.86% 3.03%(2)
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees and without expense
reimbursements, the ratio of expenses to average daily net assets for T-Cash
shares would have been .30%, .29% and .29%, respectively, for each of the
years ended October 31, 1994, 1993 and 1992, and .37% (annualized) for the
period ended October 31, 1991, and for T-Cash Dollar shares would have been
.55% and .54% for the years ended October 31, 1994, 1993 and .58%
(annualized) for the period ended October 31, 1992.
(2) Annualized.
(3) Commencement of operations.
(4) First issuance of shares.

See accompanying notes to financial statements.

FS-25
<PAGE> 91

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)

<TABLE>
<CAPTION>
FEDERAL TRUST SHARES FEDERAL TRUST DOLLAR SHARES
-------------------------------------------------- ---------------------------------------------------
DECEMBER 3, DECEMBER 31,
1990(3) 1990(4)
YEAR ENDED YEAR ENDED YEAR ENDED TO YEAR ENDED YEAR ENDED YEAR ENDED TO
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1994 1993 1992 1991 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Net Asset Value,
Beginning of
Period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Income From Investment
Operations:
Net Investment
Income............. .0380 .0302 .0389 .0564 .0355 .0277 .0364 .0487
Net Capital Gains.... -- .0001 .0018 -- -- .0001 .0018 --
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Total From Investment
Operations......... .0380 .0303 .0407 .0564 .0355 .0278 .0382 .0487
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Less Distributions:
Dividends to
Shareholders from:
Net Investment
Income............... (.0380) (.0302) (.0389) (.0564) (.0355) (.0277) (.0364) (.0487)
Net Capital Gains.... -- (.0001) (.0018) -- -- (.0001) (.0018) --
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Total
Distributions.... (.0380) (.0303) (.0407) (.0564) (.0355) (.0278) (.0382) (.0487)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Net Asset Value, End
of Period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== ============ =========== =========== =========== =============
Total Return.......... 3.87% 3.06% 4.15% 5.79% 3.62% 2.81% 3.90% 4.98%
Ratios/Supplemental
Data:
Net Assets, End of
Period $(000)........ $ 317,769 $ 257,125 $ 428,365 $ 184,063 $ 8,278 $ 1,025 $ 2,442 $ 1,681
Ratios of Expenses to
Average Net
Assets(1)............ .18% .18% .20% .12%(2) .43% .43% .45% .37%(2)
Ratios of Net
Investment Income to
Average Net Assets... 3.85% 3.02% 3.75% 5.93%(2) 3.60% 2.77% 3.50% 5.86%(2)
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees and without expense
reimbursements, the ratios of expenses to average daily net assets would
have been .31%, .29% and .30%, respectively, for each of the years ended
October 31, 1994, 1993 and 1992 and .39% (annualized) for the period ended
October 31, 1991 for Federal Trust shares, and .56%, .54% and .55%,
respectively, for each of the years ended October 31, 1994, 1993 and 1992,
and .64% (annualized) for the period ended October 31, 1991 fo Federal
Trust Dollar shares.
(2) Annualized.
(3) Commencement of operations.
(4) First issuance of shares.

See accompanying notes to financial statements.

FS-26
<PAGE> 92

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
TREASURY
TRUST
DOLLAR
SHARES
--------
TREASURY TRUST SHARES YEAR
---------------------------------------------------------------- ENDED
OCTOBER
YEAR ENDED OCTOBER 31, 31,
---------------------------------------------------------------- --------
1994 1993 1992 1991 1990 1994
---------- ---------- ---------- ---------- -------- --------
Net Asset Value, Beginning of Period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
<S> <C> <C> <C> <C> <C> <C>
---------- ---------- ---------- ---------- -------- --------
Income From Investment Operations:
Net Investment Income...................... .0359 .0292 .0380 .0612 .0777 .0334
---------- ---------- ---------- ---------- -------- --------
Total From Investment Operations......... .0359 .0292 .0380 .0612 .0777 .0334
---------- ---------- ---------- ---------- -------- --------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income...................... (.0359) (.0292) (.0380) (.0612) (.0777) (.0334)
---------- ---------- ---------- ---------- -------- --------
Total Distributions...................... (.0359) (.0292) (.0380) (.0612) (.0777) (.0334)
---------- ---------- ---------- ---------- -------- --------
Net Asset Value, End of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ======== ========
Total Return................................ 3.65% 2.96% 3.85% 6.30% 8.05% 3.40%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)............ $1,016,635 $1,188,412 $1,552,207 $1,275,545 $692,404 $181,934
Ratios of Expenses to
Average Net Assets(1)...................... .18% .18% .20% .20% .20% .43%
Ratios of Net Investment Income to
Average Net Assets......................... 3.57% 2.92% 3.78% 6.00% 7.74% 3.32%

<CAPTION>
TREASURY TRUST DOLLAR SHARES
------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------
1993 1992 1991 1990
-------- -------- ------- -------
<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...................... .0267 .0355 .0587 .0752
-------- -------- ------- -------
Total From Investment Operations......... .0267 .0355 .0587 .0752
-------- -------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income...................... (.0267) (.0355) (.0587) (.0752)
-------- -------- ------- -------
Total Distributions...................... (.0267) (.0355) (.0587) (.0752)
-------- -------- ------- -------
Net Asset Value, End of Period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= =======
Total Return................................ 2.71% 3.60% 6.05% 7.80%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)............ $258,206 $218,320 $50,729 $61,270
Ratios of Expenses to
Average Net Assets(1)...................... .43% .45% .45% .45%
Ratios of Net Investment Income to
Average Net Assets......................... 2.67% 3.53% 5.75% 7.49%
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets would have been .29%, .28%, .27%,
.32% and .37%, respectively, for each of the years ended October 31, 1994,
1993, 1992, 1991 and 1990, for Treasury Trust shares, and .54%, .53%, .52%,
.57% and .62%, respectively, for each of the years ended October 31, 1994,
1993, 1992, 1991 and 1990 for Treasury Trust Dollar shares.

See accompanying notes to financial statements.

FS-27
<PAGE> 93

TRUST FOR FEDERAL SECURITIES
Financial Highlights
(For a Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
SHORT
GOVERNMENT
DOLLAR
SHARES
YEAR
ENDED
SHORT GOVERNMENT SHARES OCTOBER
YEAR ENDED OCTOBER 31, 31,
------------------------------------------------------- --------
1994 1993 1992 1991 1990 1994
------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $ 10.47 $ 10.39 $ 10.24 $ 9.99 $ 9.92 $ 10.47
------- ------- ------- ------- ------- --------
Income From Investment Operations:
Net Investment Income........................... .5032 .0575 .6669 .7597 .7618 .4791
Net Realized and Unrealized Gain (Loss) on
Investments................................... (1.0813) .0800 .1500 .2500 .0700 (.6096)
------- ------- ------- ------- ------- --------
Total From Investment Operations.............. (.5781) .1375 .8169 1.0097 .8318 (.1305)
------- ------- ------- ------- ------- --------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income........................... (.5032) (.0575) (.6669) (.7597) (.7618) (.4791)
Net Capital Gains............................... (.1087) -- -- -- -- (.5804)
------- ------- ------- ------- ------- --------
Total Distributions........................... (.6119) (.0575) (.6669) (.7597) (.7618) (1.0595)
------- ------- ------- ------- ------- --------
Net Asset Value, End of Period................... $ 9.28 $ 10.47 $ 10.39 $ 10.24 $ 9.99 $ 9.28
======= ======= ======= ======= ======= ========
Total Return..................................... .04% 6.46% 8.20% 10.49% 8.71% (.21%)
Ratios/Supplemental Data:
Net Assets, End of Period
$(000).......................................... $ 829 $ 1,061 $10,874 $10,530 $10,114 $ 4,089
Ratios of Expenses to Average Net Assets(1)...... .40% .40% .40% .40% .40% .65%
Ratios of Net Investment Income to
Average Net Assets.............................. 5.19% 5.65% 6.44% 7.54% 7.68% 4.94%
Portfolio turnover rate.......................... 362% 66% 27% 31% 60% 362%

<CAPTION>
SHORT GOVERNMENT DOLLAR SHARES
YEAR ENDED OCTOBER 31,
-------------------------------------------
1993 1992 1991 1990
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $ 10.39 $ 10.24 $ 9.99 $ 9.92
------- ------- ------- -------
Income From Investment Operations:
Net Investment Income........................... .0549 .6410 .7387 .6521
Net Realized and Unrealized Gain (Loss) on
Investments................................... .0800 .1500 .2500 .0700
------- ------- ------- -------
Total From Investment Operations.............. .1349 .7910 .9887 .7221
------- ------- ------- -------
Less Distributions:
Dividends to Shareholders from:
Net Investment Income........................... (.0549) (.6410) (.7387) (.6521)
Net Capital Gains............................... -- -- -- --
------- ------- ------- -------
Total Distributions........................... (.0549) (.6410) (.7387) (.6521)
------- ------- ------- -------
Net Asset Value, End of Period................... $ 10.47 $ 10.39 $ 10.24 $ 9.99
======= ======= ======= =======
Total Return..................................... 6.21% 7.95% 10.24% 7.53%
Ratios/Supplemental Data:
Net Assets, End of Period
$(000).......................................... $ 5,055 $ 2,780 $ 295 $ 1
Ratios of Expenses to Average Net Assets(1)...... .65% .65% .65% .65%
Ratios of Net Investment Income to
Average Net Assets.............................. 5.40% 5.98% 7.29% 7.43%
Portfolio turnover rate.......................... 66% 27% 31% 60%
</TABLE>

- ---------------
(1) Without the waiver of advisory and administration fees and without expense
reimbursements, the ratio of expenses to average daily net assets for Short
Government shares would have been .86%, .75%, .67%, .68% and .67%
respectively, for each of the years ended October 31, 1994, 1993, 1992, 1991
and 1990. For Short Government Dollar shares, the ratio of expenses to
average daily net assets would have been 1.11%, 1.00%, .92%, .93% and .92%
respectively, for each of the years ended October 31, 1994, 1993, 1992, 1991
and 1990.

See accompanying notes to financial statements.

FS-28
<PAGE> 94

Notes to Financial Statements

A. Trust for Federal Securities (the Company) was established as a Pennsylvania
business trust under a Declaration of Trust originally dated as of May 14, 1975,
and is registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company. The Company consists of
seven separate portfolios, FedFund, T-Fund, FedCash, T-Cash, Federal Trust Fund,
Treasury Trust Fund and Short Government Fund. The Intermediate Government Fund
Portfolio was liquidated on October 31, 1994.

Each portfolio has two classes of shares, one class being referred to as
Dollar shares. Dollar shares and the other class of shares of each portfolio are
identical in all respects, except that Dollar shares are sold to institutions
(Service Organizations) which provide support services to their customers who
beneficially own such shares, in consideration of the Company's payment of 0.25%
(on an annualized basis) of the average daily net asset value of the Dollar
shares held by the institutions for the benefit of their customers. The Service
Organization fee is applicable only to the earnings of the respective Dollar
shares.

B. Significant accounting policies are as follows:

Security Valuation--FedFund, T-Fund, FedCash, T-Cash, Federal Trust Fund and
Treasury Trust Fund:

Portfolio securities are valued under the amortized cost method which
approximates current market value. Under this method, securities are valued at
cost when purchased and thereafter a constant proportionate amortization of any
discount or premium is recorded until maturity of the security. Regular review
and monitoring of the valuation is performed in an attempt to avoid dilution or
other unfair results to shareholders. The Company seeks to maintain the net
asset value per share of each portfolio at $1.00.

Security Valuation--Short Government Fund:

Portfolio securities for which market quotations are readily available (other
than debt securities with remaining maturities of 60 days or less) are valued at
the mean between the most recent quoted bid and asked prices provided by
investment dealers. Other securities and assets for which market quotations are
not readily available are valued at their fair value in the best judgment of PNC
Institutional Management Corporation under procedures established by and under
the supervision of the Company's Board of Trustees. Debt securities with
remaining maturities of 60 days or less are valued on an amortized cost basis
(unless the Board determines that such basis does not represent fair value at
the time).

Repurchase Agreements--The Company may purchase, for any portfolio except
Federal Trust Fund and Treasury Trust Fund, money market instruments from
financial institutions, such as banks and non-bank dealers, subject to the
seller's agreement to repurchase them at an agreed upon date and price.
Collateral for repurchase agreements may have longer maturities than the maximum
permissible remaining maturity of portfolio investments, provided the repurchase
agreements themselves mature in one year or less. The seller will be required on
a daily basis to maintain the value of the securities subject to the agreement
at no less than the repurchase price. Repurchase agreements with maturities in
excess of seven days are subject to a seven day put feature.

Dividends to Shareholders--Dividends are declared daily and paid monthly.
Dividends payable are recorded on the dividend record date. Net income for
dividend purposes includes interest accrued and discount earned, less the
amortization of market premium and applicable expenses and, for the Money Market
Portfolios, includes net realized gains on portfolio securities. Short
Government Fund will distribute net realized capital gains, if any, at least
once a year.

FS-29
<PAGE> 95

Notes to Financial Statements (Continued)

Federal Taxes--No provision is made for federal taxes as it is the Company's
intention to have each portfolio continue to qualify as a regulated investment
company and to make the requisite distributions to its shareholders which will
be sufficient to relieve it from federal income and excise taxes.

Other--Investment transactions are accounted for on the trade date and the
cost of investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes. Expenses not
directly attributable to a specific portfolio are allocated among the portfolios
based on their relative net assets.

Costs incurred by FedCash, T-Cash, Federal Trust Fund and Treasury Trust Fund
in connection with their organization, registration and the initial public
offering of shares have been deferred and are being amortized using the
straight-line method over a five-year period beginning on the date on which the
portfolios commenced their investment activities.

C. Under agreements among the Company, PNC Bank, National Association (PNC Bank)
and PNC Institutional Management Corporation (PIMC), a wholly owned subsidiary
of PNC Bank, PIMC manages the Company's portfolios and maintains their financial
accounts. PNC Bank is the Company's sub-advisor and custodian and PFPC Inc.
(PFPC) is the Company's transfer agent.

As of January 31, 1994, Provident Distributors, Inc. (PDI) became the
Company's Distributor succeeding Pennsylvania Merchant Group Ltd. No
compensation is payable by the Company to PDI for its distribution services.

The Company has entered into an Administration Agreement with PFPC and PDI for
certain administrative services.

In return for their advisory and administrative services, the Company pays
PIMC and the administrators each a fee, computed daily and payable monthly,
based upon an annualized percentage of the average net assets of each portfolio
as follows:

FedFund, T-Fund, FedCash, T-Cash, Federal Trust Fund and Treasury Trust Fund
(on a combined basis)--.175% of the first $1 billion, .15% of the next $1
billion, .125% of the next $1 billion, .10% of the next $1 billion, .095% of the
next $1 billion, .09% of the next $1 billion, .085% of the next $1 billion and
.08% of net assets in excess of $7 billion.

Short Government Fund--.20% of average net assets.

If expenses borne by any portfolio in any fiscal year exceed the applicable
expense limitation imposed by state securities regulations, the administrators
and PIMC will each reimburse the portfolio for one-half of any excess expense up
to the amount of fees payable to it (except where such regulations require
reimbursement regardless of the fees payable to it).

The administrators and PIMC have also agreed to reduce their fees, on an equal
basis, to the extent necessary to ensure that the total operating expenses
(excluding Service Organization fees) of FedFund, T-Fund, Federal Trust Fund,
and Treasury Trust Fund do not exceed .18% of their respective average net
assets for the 36-month period ending January 18, 1996, and with respect to
FedCash and T-Cash, .16%. For the year ended October 31, 1994, the
administrators and PIMC voluntarily agreed to reimburse, on an equal basis, for
expenses in the amount of $4,592 with respect to Short Government Fund. For the
year ended October 31, 1994, the administrators (or former administrator) and
PIMC waived, on an equal basis, a total of $1,615,628 of the administration and
advisory fees payable to them with respect to FedFund, $1,310,068 with respect
to T-Fund, $1,093,063 with respect to FedCash, $819,786 with respect to T-Cash,
$394,224 with

FS-30
<PAGE> 96

Notes to Financial Statements (Continued)

respect to Federal Trust Fund, $1,569,441 with respect to Treasury Trust Fund
and $25,713 with respect to Short Government Fund.

D. The Company's Declaration of Trust permits the Trustees to authorize the
issuance of an unlimited number of full and fractional shares of beneficial
interest (shares) in the Company and to classify or reclassify any unissued
shares into one or more additional classes of shares.

Transactions in shares of the Company are summarized as follows:

<TABLE>
<CAPTION>
FEDFUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ----------------
<S> <C> <C>
Shares sold:
FedFund...................................................... 13,216,424,487 17,262,796,478
FedFund Dollar............................................... 7,107,738,952 6,264,047,505
Shares issued in reinvestment of dividends:
FedFund...................................................... 6,637,408 7,117,459
FedFund Dollar............................................... 2,425,565 2,131,063
Shares repurchased:
FedFund...................................................... (12,956,407,780) (18,955,700,485)
FedFund Dollar............................................... (7,144,265,626) (6,244,652,891)
---------------- ----------------
Net increase (decrease) in shares......................... 232,553,006 (1,664,260,871)
Shares outstanding:
Beginning of period.......................................... 1,460,942,287 3,125,203,158
---------------- ----------------
End of period................................................ 1,693,495,293 1,460,942,287
================ ================
</TABLE>

<TABLE>
<CAPTION>
T-FUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ----------------
<S> <C> <C>
Shares sold:
T-Fund....................................................... 10,373,466,042 11,464,012,656
T-Fund Dollar................................................ 140,897,598 98,443,066
Shares issued in reinvestment of dividends:
T-Fund....................................................... 8,928,181 7,800,781
T-Fund Dollar................................................ 17,209 30,875
Shares repurchased:
T-Fund....................................................... (10,731,065,139) (11,437,851,421)
T-Fund Dollar................................................ (131,959,446) (90,150,190)
---------------- ----------------
Net increase (decrease) in shares......................... (339,715,555) 42,285,767
Shares outstanding:
Beginning of period.......................................... 1,374,944,127 1,332,658,360
---------------- ----------------
End of period................................................ 1,035,228,572 1,374,944,127
================ ================
</TABLE>

FS-31
<PAGE> 97

Notes to Financial Statements (Continued)

<TABLE>
<CAPTION>
FEDCASH PORTFOLIO
-----------------------------------
YEAR ENDED
YEAR ENDED OCTOBER 31,
OCTOBER 31, 1994 1993
---------------- ---------------
<S> <C> <C>
Shares sold:
FedCash........................................................ 6,271,269,784 5,028,403,933
FedCash Dollar................................................. 314,930,835 1,486,843,637
Shares issued in reinvestment of dividends:
FedCash........................................................ 8,312,109 4,679,113
FedCash Dollar................................................. -- --
Shares repurchased:
FedCash........................................................ (6,098,307,231) (5,303,074,017)
FedCash Dollar................................................. (351,041,562) (1,481,803,534)
---------------- ---------------
Net increase (decrease) in shares........................... 145,163,935 (264,950,868)
Shares outstanding:
Beginning of period............................................ 506,839,815 771,790,683
---------------- ---------------
End of period.................................................. 652,003,750 506,839,815
=============== ===============
</TABLE>

<TABLE>
<CAPTION>
T-CASH PORTFOLIO
-----------------------------------
YEAR ENDED
YEAR ENDED OCTOBER 31,
OCTOBER 31, 1994 1993
---------------- ---------------
<S> <C> <C>
Shares sold:
T-Cash......................................................... 3,078,794,751 3,409,340,772
T-Cash Dollar.................................................. 415,340,757 625,253,233
Shares issued in reinvestment of dividends:
T-Cash......................................................... 2,866,836 2,974,150
T-Cash Dollar.................................................. 362,345 61,990
Shares repurchased:
T-Cash......................................................... (3,288,400,674) (3,465,260,073)
T-Cash Dollar.................................................. (487,588,249) (488,399,601)
---------------- ---------------
Net increase (decrease) in shares........................... (278,624,234) 83,970,471
Shares outstanding:
Beginning of period............................................ 585,830,508 501,860,037
---------------- ---------------
End of period.................................................. 307,206,274 585,830,508
=============== ===============
</TABLE>

FS-32
<PAGE> 98

Notes to Financial Statements (Continued)

<TABLE>
<CAPTION>
FEDERAL TRUST FUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ----------------
<S> <C> <C>
Shares sold:
Federal Trust.................................................. 3,188,210,343 3,002,371,176
Federal Trust Dollar........................................... 36,586,563 702,201
Shares issued in reinvestment of dividends:
Federal Trust.................................................. 2,838,942 1,427,201
Federal Trust Dollar........................................... 1,469 6,305
Shares repurchased:
Federal Trust.................................................. (3,130,334,569) (3,174,947,516)
Federal Trust Dollar........................................... (29,333,149) (2,125,082)
---------------- ----------------
Net increase (decrease) in shares........................... 67,969,599 (172,565,715)
Shares outstanding:
Beginning of period............................................ 258,238,416 430,804,131
---------------- ----------------
End of period.................................................. 326,208,015 258,238,416
=============== ===============
</TABLE>

<TABLE>
<CAPTION>
TREASURY TRUST FUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ----------------
<S> <C> <C>
Shares sold:
Treasury Trust................................................. 7,214,439,647 8,777,768,209
Treasury Trust Dollar.......................................... 474,346,815 525,048,803
Shares issued in reinvestment of dividends:
Treasury Trust................................................. 7,153,403 7,969,643
Treasury Trust Dollar.......................................... 4,442,046 4,267,466
Shares repurchased:
Treasury Trust................................................. (7,393,205,005) (9,149,466,425)
Treasury Trust Dollar.......................................... (555,033,684) (489,422,241)
---------------- ----------------
Net decrease in shares...................................... (247,856,778) (323,834,545)
Shares outstanding:
Beginning of period............................................ 1,446,694,379 1,770,528,924
---------------- ----------------
End of period.................................................. 1,198,837,601 1,446,694,379
=============== ===============
</TABLE>

FS-33
<PAGE> 99

Notes to Financial Statements (Continued)

<TABLE>
<CAPTION>
SHORT GOVERNMENT
FUND PORTFOLIO
------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
---------------- ----------------
<S> <C> <C>
Shares sold:
Short Government................................................. 97,814 131,705
Short Government Dollar.......................................... 2,220,216 1,583,584
Shares issued in reinvestment of dividends:
Short Government................................................. 7,288 29
Short Government Dollar.......................................... -- --
Shares repurchased:
Short Government................................................. (117,136) (1,076,751)
Short Government Dollar.......................................... (2,262,460) (1,368,453)
--------------- ---------------
Net decrease in shares........................................ (54,278) (729,886)
Shares outstanding:
Beginning of period.............................................. 584,027 1,313,913
--------------- ---------------
End of period.................................................... 529,749 584,027
============== ==============
</TABLE>

FS-34
<PAGE> 100

Notes to Financial Statements (Concluded)

E. At October 31, 1994, net assets consisted of:

<TABLE>
<CAPTION>
FEDERAL TREASURY
TRUST TRUST SHORT
FEDFUND T-FUND FEDCASH T-CASH FUND FUND GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND PORTFOLIO
-------------- -------------- ------------ ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paid-in Capital... $1,693,495,293 $1,035,228,572 $652,003,750 $307,206,274 $326,208,015 $1,198,837,601 $5,070,128
Accumulated net
realized gain
(loss) on
security
transactions.... (163,796) (56,910) (57,583) (3,110) (160,580) (268,719) (132,747)
Net unrealized
depreciation of
investments..... -- -- -- -- -- -- (19,783)
-------------- -------------- ------------ ------------ ------------ -------------- --------------
$1,693,331,497 $1,035,171,662 $651,946,167 $307,203,164 $326,047,435 $1,198,568,882 $4,917,598
============== ============== ============= ============= ============= ============== ================
</TABLE>

F. At October 31, 1994, FedFund, T-Fund, FedCash, T-Cash, Federal Trust,
Treasury Trust and Short Government Fund had capital loss carryovers amounting
to $163,796, $56,910, $57,583, $3,110, $153,217, $268,719 and $130,408
respectively, which expire in 2002. The capital loss carryovers are available to
offset possible future capital gains of the related portfolios.

FS-35
<PAGE> 101
TRUST FOR FEDERAL SECURITIES
(FedCash Portfolio)
Cross Reference Sheet