SHORT-TERM
MUNICIPAL
TRUST
(formerly, Federated Short-Intermediate
Municipal Trust)
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
DECEMBER 31, 1993
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for the
Institutional Shares and Institutional Service Shares of Short-Term Municipal
Trust (the "Trust") (formerly Federated Short-Intermediate Municipal Trust) for
the six-month period ended December 31, 1993. The Report begins with our
Investment Review, which is a brief commentary on the municipal market from the
Trust's portfolio manager. Following the Investment Review, you'll find
Financial Highlights for Institutional Shares and Institutional Service Shares
and Financial Statements containing the Trust's portfolio of investments.
On behalf of its shareholders, the Trust pursues monthly income that is free
from federal regular income taxes by investing in a highly diverse portfolio of
municipal securities.* At the end of the report period, the Trust was invested
in 125 municipal securities from 36 states, the District of Columbia, and Puerto
Rico.
Over the six-month report period, dividends paid to shareholders exceeded $6.6
million or $0.20 per share. Total assets grew from $318.9 million at the
beginning of the period to $358.2 million as of December 31, 1993. On that same
day, the net asset value of both classes of shares in the Trust was $10.35.
We look forward to keeping you informed about Short-Term Municipal Trust and, as
always, we welcome your questions, comments, or suggestions.
Sincerely,
Glen R. Johnson
President
February 11, 1994
*Income may be subject to the Federal Alternative Minimum Tax and State and
Local taxes.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
For the six months ending December 31, 1993, economic growth overall has been
accelerating, and inflation--the scourge of fixed-income investing--has been
subdued. Real (inflation-adjusted) Gross Domestic Product has been growing over
the past six months at an annual pace of 4.4 percent. From July 1, 1993 to
December 31, 1993, annual real GDP growth has, in fact, escalated from 2.9
percent to 5.9 percent. In the meantime, however, increases in the Producer
Price Index have descended sharply--from an annual rate of 1.3 percent as of
July 1, 1993 to one of 0.2 percent as of December 31, 1993.
The growth in the economy has been achieved by increased productivity of capital
and labor resources. Capacity utilization of the nation's mines and factories
has increased modestly from 81.5 percent to 83.5 percent. Meanwhile, the growth
in real per capita disposable income and in total non-farm payroll has been less
than that for real GDP--1.7 percent and 1.8 percent respectively. These
conditions, as well as announcements by major corporations for personnel
reduction, do not portend sudden acceleration in underlying inflation.
Nevertheless, the short-term, fixed-income markets harbored fears of
"tightening" by the Federal Reserve Board as a response to stave potential
inflation--the usual bane of economic recovery.
Yields for short-term, fixed-income issues initially responded to economic
developments and prospects with sizeable declines. From July 1, 1993 to October
15, 1993, yields for three-year U.S. Treasury notes plummeted from 4.36 percent
to 4.08 percent. However, by December 31, 1993, short-term Treasury yields had
climbed to 4.57 percent. Meanwhile, rates for three-year "Aa" general obligation
municipal issues traced a path from 3.58 percent to 3.30 percent and then to
3.61 percent. The lesser yield volatility in the short-term municipal market
compared to the short-term Treasury market reflected in part the increased
appeal of short-term municipal issues in the wake of higher and retroactive
federal marginal tax rates.
From July 1, 1993 to December 31, 1993, net assets of Short-Term Municipal Trust
grew from $318.9 million to $358.2 million. In response to market activity, the
net asset value per share of the Trust was unchanged from $10.37 on July 1, 1993
to $10.37 on October 15, 1993, and then fell to $10.35 on December 31, 1993. On
that date, the credit breakdown of the holdings of the Trust was: 44.3 percent
in "Aaa" issues; 47.7 percent in "Aa" issues; 7.6 percent in "A" issues; and 0.4
percent in municipal cash equivalents within the highest rating category.
When ascertaining the credit quality of issues for potential investment by the
Trust, the adviser focuses upon a variety of economic and financial parameters.
For general obligation issues, analysis is directed towards demographic
constitution, income distribution, property value levels and growth, provision
of governmental services, and debt authorization. For revenue issues,
examination is also made of issuer cash flow generation, sensitivity to product
or service pricing, competition and industry/sector make-up, debt structure,
debt service coverage, financial flexibility, and contingent liabilities.
Securities bought by the Trust during the past six months consisted largely of:
system revenue issues of municipal electric agencies; college and university
tuition and fee revenue issues; general obligation issues of state and local
governments; and pre-refunded municipal issues. The Trust also invested in
securities with longer "nominal" maturities but with "in-the-money" call
provisions, providing short "effective" maturities, to attain yields higher than
those of "bullet"-maturity issues, without sacrificing in credit quality. At no
time did any of the holdings of the Trust feature interest subject to the
federal alternative minimum tax for individuals.
For the six months ending December 31, 1993, an investor in the Trust for
Institutional Shares experienced a non-annualized "total return" of 1.77
percent. This performance was comprised of 1.96 percent income and reinvestment
return (net of Trust expenses) and of 0.19 percent depreciation in the net asset
value per share of the Trust. For the period ending December 31, 1993, an
investor in the Trust for Institutional Services Shares experienced a
non-annualized "total return" of 1.22%. This performance was based on income and
reinvestment return (net of Trust expenses). Past investment performance is
neither indicative nor predictive of future investment performance. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
SHORT-TERM MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
SUPPLEMENTARY INFORMATION
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994* 1993 1992 1991 1990 1989 1988 1987 1986
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.37 $ 10.29 $ 10.18 $ 10.14 $ 10.10 $ 10.19 $ 10.24 $ 10.31 $ 10.22
- --------------------------
INCOME FROM INVESTMENT
OPERATIONS
- --------------------------
Net investment income 0.20 0.44 0.53 0.60 0.60 0.57 0.54 0.51 0.60
- --------------------------
Net realized and
unrealized gain (loss) on
investments (0.02) 0.08 0.11 0.04 0.04 (0.09) (0.05) (0.07) 0.09
- -------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 0.18 0.52 0.64 0.64 0.64 0.48 0.49 0.44 0.69
- --------------------------
LESS DISTRIBUTIONS
- --------------------------
Dividends to shareholders
from net investment
income (0.20) (0.44) (0.53) (0.60) (0.60) (0.57) (0.54) (0.51) (0.60)
- -------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD $ 10.35 $ 10.37 $ 10.29 $ 10.18 $ 10.14 $ 10.10 $ 10.19 $ 10.24 $ 10.31
- -------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN** 1.77% 5.11% 6.40% 6.47% 6.54% 4.84% 4.89% 4.37% 7.55%
- --------------------------
RATIOS TO AVERAGE NET
ASSETS
- --------------------------
Expenses 0.47 (a) 0.46% 0.46% 0.46% 0.47% 0.46% 0.47% 0.47% 0.48%
- --------------------------
Net investment income 3.88 (a) 4.21% 5.12% 5.89% 5.94% 5.59% 5.25% 4.95% 5.80%
- --------------------------
SUPPLEMENTAL DATA
- --------------------------
Net assets, end of period
(000's omitted)
$344,702
$318,932
$205,101
$142,493
$139,113
$178,978
$315,154
$483,279
$341,294
$192,573
- --------------------------
Portfolio turnover rate 4% 15% 42% 40% 69% 55% 63% 57% 16%
- --------------------------
<CAPTION>
<S> <C>
1985
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.05
- --------------------------
INCOME FROM INVESTMENT
OPERATIONS
- --------------------------
Net investment income 0.64
- --------------------------
Net realized and
unrealized gain (loss) on
investments 0.17
- -------------------------- ---------
Total from investment
operations 0.81
- --------------------------
LESS DISTRIBUTIONS
- --------------------------
Dividends to shareholders
from net investment
income (0.64)
- -------------------------- ---------
NET ASSET VALUE,
END OF PERIOD $ 10.22
- -------------------------- ---------
TOTAL RETURN** 7.68%
- --------------------------
RATIOS TO AVERAGE NET
ASSETS
- --------------------------
Expenses 0.47%
- --------------------------
Net investment income 6.33%
- --------------------------
SUPPLEMENTAL DATA
- --------------------------
Net assets, end of period
(000's omitted)
$344,702
$318,932
$205,101
$142,493
$139,113
$178,978
$315,154
$483,279
$341,294
$192,573
- --------------------------
Portfolio turnover rate 32%
- --------------------------
</TABLE>
* Six months ended December 31, 1993 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
SHORT-TERM MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
SUPPLEMENTARY INFORMATION
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30,
<S> <C>
1994*
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.35
- --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income 0.13
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.00)
- -------------------------------------------------------------------------------------------------- ---------------
Total from investment operations 0.13
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.13)
- -------------------------------------------------------------------------------------------------- ---------------
NET ASSET VALUE, END OF PERIOD $ 10.35
- -------------------------------------------------------------------------------------------------- ---------------
TOTAL RETURN** 1.22
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------------
Expenses 0.71%(a)
- --------------------------------------------------------------------------------------------------
Net investment income 3.63%(a)
- --------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period
$13,520
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 4 %
- --------------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 31, 1993 (date of initial
public offering) to December 31, 1993 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
SHORT-TERM MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S MARKET
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- --------------------------------------------------------------------- ---------- ---------------
MUNICIPAL SECURITIES--100.9%
- ------------------------------------------------------------------------------------
ALABAMA--0.3%
---------------------------------------------------------------------
$ 1,000,000 Alabama Water Pollution Control Authority, 5.40% Revenue Bonds
(Series 1991)/(Revolving Fund Loan Program)/(AMBAC Insured), 8/15/94 AAA $ 1,016,950
--------------------------------------------------------------------- ---------------
ALASKA--0.3%
---------------------------------------------------------------------
1,140,000 Matanuska-Susitna Borough, AK, 5.60% GO School Refunding Bonds
(Series B)/(MBIA Insured), 4/1/94 AAA 1,148,903
--------------------------------------------------------------------- ---------------
ARIZONA--2.1%
---------------------------------------------------------------------
2,000,000 Pima County, AZ, Unified School District Pound1, 8.00% School
Improvement Bonds (FGIC Insured), 7/1/96 AAA 2,219,700
---------------------------------------------------------------------
1,000,000 Salt River, AZ, 3.70% Electric System Revenue Bonds (Agricultural
Improvement & Power District), 1/1/96 AA 1,006,900
---------------------------------------------------------------------
2,500,000 Salt River, AZ, 4.00% OID Power Supply Revenue Bonds (Agricultural
Improvement & Power District)/(Original Issue Yield: 4.05%), 1/1/96 Aa 2,530,675
---------------------------------------------------------------------
1,750,000 Salt River, AZ, 5.50% Electric System Revenue Bonds (Agricultural
Improvement & Power District), 1/1/94 Aa 1,750,000
--------------------------------------------------------------------- ---------------
Total 7,507,275
--------------------------------------------------------------------- ---------------
CALIFORNIA--3.2%
---------------------------------------------------------------------
1,250,000 Los Angeles County, CA, Transportation Commission, 4.30% Sales Tax
Revenue Bonds (Series 1992A)/(MBIA Insured), 7/1/95 Aaa 1,271,338
---------------------------------------------------------------------
1,250,000 Orange County, CA, Local Transportation Authority, 4.20% Sales Tax
Revenue Bonds, 2/15/95 Aa 1,262,238
---------------------------------------------------------------------
$ 8,000,000 Southern California Public Power Authority, 11.25% Transmission
Project Revenue Bonds (Prerefunded),
1/1/95 (@103) Aaa $ 8,941,760
--------------------------------------------------------------------- ---------------
Total 11,475,336
--------------------------------------------------------------------- ---------------
COLORADO--2.8%
---------------------------------------------------------------------
1,535,000 Colorado City & County Airport, 4.70% Revenue Bonds (Stapleton
International Airport)/(Prerefunded), 12/1/94 (@100) Aaa 1,648,022
---------------------------------------------------------------------
2,465,000 Colorado Health Facilities Authority, 7.50% Revenue Bonds (Series
1991A)/(Sisters of Charity Health Care Systems, Inc.)/(MBIA Insured),
5/15/94 AAA 2,509,740
---------------------------------------------------------------------
2,995,000 Denver, (City & County), CO, 4.15% GO Bonds (Series 1992C), 8/1/95 Aa 3,202,673
---------------------------------------------------------------------
1,900,000 Mesa County, CO, School District Pound51, 4.90% GO Refunding Bonds
(Series 1991B)/(AMBAC Insured),
12/1/94 Aaa 1,945,144
---------------------------------------------------------------------
1,000,000 Mesa County, CO, School District Pound51, 4.90% GO Refunding Bonds
(Series 1991B)/(AMBAC Insured), 6/1/94 Aaa 1,011,300
--------------------------------------------------------------------- ---------------
Total 10,316,879
--------------------------------------------------------------------- ---------------
DELAWARE--0.6%
---------------------------------------------------------------------
2,000,000 Delaware, 6.80% UT GO Bonds, 5/1/95 Aa 2,096,860
--------------------------------------------------------------------- ---------------
DISTRICT OF COLUMBIA--1.2%
---------------------------------------------------------------------
1,000,000 District Columbia, 8.00% UT GO Bonds (Prerefunded),
6/1/96 (@102) AAA 1,123,500
---------------------------------------------------------------------
2,000,000 District of Columbia, 5.30% GO Bonds (FGIC Insured),
6/1/94 AAA 2,021,480
---------------------------------------------------------------------
$ 1,000,000 District of Columbia, 5.50% GO Bonds (FGIC Insured),
6/1/95 AAA $ 1,029,880
--------------------------------------------------------------------- ---------------
Total 4,174,860
--------------------------------------------------------------------- ---------------
FLORIDA--3.6%
---------------------------------------------------------------------
2,000,000 Florida State Board of Education, 5.80% UT GO Capital Outlay Bonds
(Series 1991B), 6/1/94 Aa 2,028,280
---------------------------------------------------------------------
5,000,000 Florida State Board of Education, 4.80% UT GO Capital Outlay Bonds,
6/1/96 Aa 5,172,650
---------------------------------------------------------------------
1,615,000 Florida State Board of Education, 6.40% UT GO Capital Outlay Bonds,
6/1/96 Aa 1,730,295
---------------------------------------------------------------------
1,500,000 Florida State Board of Education, 7.80% UT GO Capital Outlay Bonds
(Prerefunded), 6/1/96 (@102) AAA 1,677,585
---------------------------------------------------------------------
1,390,000 Miami Beach, FL, Health Facilities Authority, 4.45% Hospital Revenue
Refunding Bonds, (Mount Sinai Medical Center)/(Capital Guaranty
Insured), 11/15/95 AAA 1,424,847
---------------------------------------------------------------------
1,000,000 Orlando, FL, Utilities Commission, 4.50% Water & Electric Revenue
Bonds, 10/1/94 Aa 1,039,620
--------------------------------------------------------------------- ---------------
Total 13,073,277
--------------------------------------------------------------------- ---------------
GEORGIA--2.0%
---------------------------------------------------------------------
1,820,000 Gwinnet County, GA, School District, 4.90% GO School Bonds (Series
A), 2/1/95 Aa 1,854,562
---------------------------------------------------------------------
2,000,000 Gwinnet County, GA, Water & Sewer Authority, 7.45% Certificates of
Participation, 8/1/94 AA 2,056,520
---------------------------------------------------------------------
3,300,000 Municipal Electric Authority of Georgia, 10.25% Power Supply Revenue
Bonds (Prerefunded), 1/1/94 (@103) Aaa 3,399,000
--------------------------------------------------------------------- ---------------
Total 7,310,082
--------------------------------------------------------------------- ---------------
HAWAII--4.5%
---------------------------------------------------------------------
10,000,000 Honolulu (City & County), HI, 3.60% GO Bonds, 10/1/95 AA 10,057,000
---------------------------------------------------------------------
$ 6,000,000 Honolulu, City & County, HI, 4.20% OID UT GO Bonds (Original Issue
Yield: 4.30%), 10/1/97 AA $ 6,129,120
--------------------------------------------------------------------- ---------------
Total 16,186,120
--------------------------------------------------------------------- ---------------
ILLINOIS--5.2%
---------------------------------------------------------------------
2,000,000 Chicago, IL, School Finance Authority, 10.50% School Assistance Bonds
(Series E)/(Prerefunded), 6/1/94 (@103) Aaa 2,128,980
---------------------------------------------------------------------
1,750,000 Du Page, IL, Water Commission, 5.90% Refunding Revenue Bonds, 5/1/96 AA- 1,840,790
---------------------------------------------------------------------
2,000,000 Illinois State Toll Highway Authority, 7.375% Revenue Bonds
(Prerefunded), 1/1/96 (@102) AAA 2,190,260
---------------------------------------------------------------------
5,500,000 Illinois State Toll Highway Road Authority, 7.10% Revenue Bonds
(Prerefunded), 1/1/96 (@102) AAA 5,995,275
---------------------------------------------------------------------
6,500,000 Illinois State, 4.50% GO Bonds (Series 1993), 8/1/96 AA- 6,676,800
--------------------------------------------------------------------- ---------------
Total 18,832,105
--------------------------------------------------------------------- ---------------
IOWA--0.6%
---------------------------------------------------------------------
1,095,000 Sioux City, IA, 4.15% Hospital Revenue Refunding Bonds (Series 1993
O)/(Sisters of Mercy Health Corp.)/(MBIA Insured), 8/15/96 AAA 1,094,956
---------------------------------------------------------------------
1,140,000 Sioux City, IA, 4.15% Hospital Revenue Refunding Bonds (Series 1993
O)/(Sisters of Mercy Health Corp.)/(MBIA Insured), 8/15/97 AAA 1,156,416
--------------------------------------------------------------------- ---------------
Total 2,251,372
--------------------------------------------------------------------- ---------------
KENTUCKY--0.3%
---------------------------------------------------------------------
1,000,000 Kentucky State Turnpike Authority, 7.875% (Prerefunded), 7/1/96
(@102) AAA 1,124,450
--------------------------------------------------------------------- ---------------
MAINE--0.5%
---------------------------------------------------------------------
1,805,000 Maine, 7.875% Full Faith and Credit Bonds (Highway Purpose), 7/1/94 Aa1 1,853,518
--------------------------------------------------------------------- ---------------
MARYLAND--1.8%
---------------------------------------------------------------------
$ 1,500,000 Charles County, MD, 7.00% UT GO Refunding and Public Improvement
Bonds (AMBAC Insured), 1/15/95 Aaa $ 1,571,460
---------------------------------------------------------------------
2,055,000 University of Maryland System Auxiliary, 4.50% Facility & Tuition
Revenue Bonds (Series A), 2/1/95 Aa 2,091,230
---------------------------------------------------------------------
2,650,000 Washington, MD, Suburban Sanitation District, 7.20% UT GO Bonds,
6/1/95 Aa1 2,798,957
--------------------------------------------------------------------- ---------------
Total 6,461,647
--------------------------------------------------------------------- ---------------
MASSACHUSETTS--1.3%
---------------------------------------------------------------------
4,500,000 Massachusetts State, 7.25% UT GO Bonds, 6/1/96 A 4,883,220
--------------------------------------------------------------------- ---------------
MICHIGAN--3.2%
---------------------------------------------------------------------
5,000,000 Detroit, MI, City School District, 5.30% Refunding Bonds
(Q-SBLF/State Guaranty), 5/1/99 AA- 5,226,000
---------------------------------------------------------------------
2,120,000 Michigan State Hospital Finance Authority, 4.00% Hospital Revenue
Refunding Bonds (Series 1993P)/(Sisters of Mercy Health Corp.),
8/15/96 A 2,112,071
---------------------------------------------------------------------
4,345,000 Michigan State Hospital Finance Authority, 4.00% Revenue Refunding
Bonds (Series 1993P)/(Sisters of Mercy Health Corp.)(MBIA Insured),
8/15/97 Aaa 4,372,460
--------------------------------------------------------------------- ---------------
Total 11,710,531
--------------------------------------------------------------------- ---------------
MINNESOTA--4.0%
---------------------------------------------------------------------
2,000,000 Minnesota, 9.00% GO Bonds (Prerefunded), 3/1/94 (@100) Aaa 2,022,900
---------------------------------------------------------------------
1,250,000 Northern Minnesota Municipal Power Agency, 9.00% Power Supply Revenue
Bonds (Prerefunded), 1/1/94 (@102) Aaa 1,275,000
---------------------------------------------------------------------
2,000,000 Southern Minnesota Municipal Power Agency, 9.00% Power Supply Revenue
Bonds (Prerefunded), 1/1/96 (@102) Aaa 2,259,880
---------------------------------------------------------------------
$ 1,915,000 Washington County, MN, Housing Redevelopment Authority, 3.85%
Refunding Revenue Bonds, 2/1/96 AA- $ 1,926,356
---------------------------------------------------------------------
3,410,000 Western Minnesota Municipal Power Agency, 7.00% Revenue Bonds (Series
A)/(Original Issue Yield: 7.062%), 1/1/2013 (Callable: 1/1/97 @102) A- 3,736,678
---------------------------------------------------------------------
3,000,000 Western Minnesota Municipal Power Agency, 9.50% Power Supply Revenue
Bonds (Prerefunded), 1/1/96 (@102) Aaa 3,411,420
--------------------------------------------------------------------- ---------------
Total 14,632,234
--------------------------------------------------------------------- ---------------
MISSISSIPPI--0.9%
---------------------------------------------------------------------
3,235,000 Mississippi, 8.40% Highway Revenue Bonds (FGIC Insured), 2/1/94 AAA 3,256,694
--------------------------------------------------------------------- ---------------
MISSOURI--2.1%
---------------------------------------------------------------------
1,580,000 Kansas City School District, 4.85% Missouri Building Corp. Refunding
Leasehold Revenue Bonds (Series 1991A)/(FGIC Insured), 2/1/95 Aaa 1,618,615
---------------------------------------------------------------------
1,500,000 Kansas City School District, 5.60% Missouri Building Corp. Refunding
Leasehold Revenue Bonds (Series 1991A)/(FGIC Insured), 2/1/94 Aaa 1,503,279
---------------------------------------------------------------------
2,310,000 Kansas City, MO, 5.65% Sewer Revenue Bonds, 3/1/95 Aa 2,376,182
---------------------------------------------------------------------
2,000,000 Missouri State HEFA, 4.10% Revenue Bonds (Series 1992B)/(Health
Midwest)/(MBIA Insured), 2/15/95 Aaa 2,018,280
--------------------------------------------------------------------- ---------------
Total 7,516,356
--------------------------------------------------------------------- ---------------
NEBRASKA--1.0%
---------------------------------------------------------------------
1,250,000 Omaha, NE, 3.80% Electric System Revenue Bonds
(Series B)/(Public Power District), 2/1/96 Aa 1,261,188
---------------------------------------------------------------------
1,400,000 Omaha, NE, 3.90% Electric System Revenue Bonds
(Series A)/(Public Power District), 2/1/96 Aa 1,415,330
---------------------------------------------------------------------
$ 1,000,000 Omaha, NE, 4.70% Electric System Revenue Bonds,
(Series A)/(Public Power District), 2/1/95 Aa $ 1,026,670
--------------------------------------------------------------------- ---------------
Total 3,703,188
--------------------------------------------------------------------- ---------------
NEVADA--2.3%
---------------------------------------------------------------------
2,000,000 Clark County, NV, School District, 7.10% LT GO Bonds (Series A),
3/1/97 A+ 2,198,160
---------------------------------------------------------------------
6,000,000 Nevada, 5.50% Highway Improvement Revenue Bonds (Motor Vehicle Fuel
Tax Bond), 4/1/94 AA 6,043,500
--------------------------------------------------------------------- ---------------
Total 8,241,660
--------------------------------------------------------------------- ---------------
NEW HAMPSHIRE--1.7%
---------------------------------------------------------------------
3,310,000 New Hampshire, 4.20% Capital Improvement Refunding GO Bonds (Series
1992), 9/1/95 Aa 3,370,739
---------------------------------------------------------------------
2,580,000 New Hampshire, 8.00% GO Bonds (Series 1991A),
6/15/94 AA 2,644,964
--------------------------------------------------------------------- ---------------
Total 6,015,703
--------------------------------------------------------------------- ---------------
NEW JERSEY--0.6%
---------------------------------------------------------------------
1,275,000 Monmouth County, NJ, Improvement Authority, 5.30% Revenue Bonds
(Correctional Facilities)/(Series 1991),
8/1/94 AA 1,294,903
---------------------------------------------------------------------
1,000,000 New Jersey, 4.75% GO Bonds (Prerefunded), 8/1/94 (@100) Aaa 1,021,320
--------------------------------------------------------------------- ---------------
Total 2,316,223
--------------------------------------------------------------------- ---------------
NEW MEXICO--3.1%
---------------------------------------------------------------------
4,000,000 Albuquerque, NM, 4.80% General Purpose GO Bonds (Series 1992A),
7/1/94 AA 4,053,720
---------------------------------------------------------------------
2,865,000 Bernalillo County, NM, 4.075% GO Special Tax Bonds,
8/1/95 Aa 3,005,070
---------------------------------------------------------------------
$ 4,250,000 New Mexico, 5.00% Severance Tax Refunding Bonds (Series 1991A),
7/1/94 AA $ 4,304,783
--------------------------------------------------------------------- ---------------
Total 11,363,573
--------------------------------------------------------------------- ---------------
NEW YORK--3.8%
---------------------------------------------------------------------
3,500,000 New York State Thruway Authority, 3.80% Emergency Highway
Construction & Reconstruction Bonds (FGIC Insured), 3/1/96 AAA 3,532,515
---------------------------------------------------------------------
9,540,000 New York State, 5.75% UT GO Bonds, 9/15/99 A- 10,307,588
--------------------------------------------------------------------- ---------------
Total 13,840,103
--------------------------------------------------------------------- ---------------
NORTH CAROLINA--3.0%
---------------------------------------------------------------------
1,500,000 Charlotte-Mecklenberg, NC, Hospital Authority, 4.65% Health Care
System Revenue Bonds, 1/1/95 Aa 1,522,275
---------------------------------------------------------------------
6,000,000 Mecklenberg County, NC, 5.00% UT GO Refunding Bonds, (Series 1992),
3/1/95 Aaa 6,138,300
---------------------------------------------------------------------
3,000,000 North Carolina Eastern Municipal Power Authority, 10.00% Revenue
Bonds (Prerefunded), 1/1/95 (@103) Aaa 3,314,040
--------------------------------------------------------------------- ---------------
Total 10,974,615
--------------------------------------------------------------------- ---------------
OHIO--5.3%
---------------------------------------------------------------------
7,000,000 Cincinnati (Hamilton County), OH, City School District, 4.50% TANs,
6/1/94 AA- 7,121,450
---------------------------------------------------------------------
3,300,000 Columbus, OH, 7.70% UT GO Bonds (Prerefunded),
5/1/96 (@ 102) AAA 3,675,837
---------------------------------------------------------------------
1,105,000 Montgomery County, OH, 7.50% Revenue Bonds, (Series 1991A)/(Sisters
of Charity Health Care System, Inc.)/ (MBIA Insured), 5/15/94 AAA 1,125,730
---------------------------------------------------------------------
2,815,000 Ohio State Water Development Authority, 7.25% Revenue Bonds (Phillip
Morris), 12/1/2008 A 3,178,726
---------------------------------------------------------------------
$ 4,000,000 Ohio, 5.70% Highway Obligation Bonds (Series Q),
5/15/94 AAA $ 4,049,440
--------------------------------------------------------------------- ---------------
Total 19,151,183
--------------------------------------------------------------------- ---------------
OTHER--1.4%
---------------------------------------------------------------------
4,600,000 New York City, NY, 10.25% GO Bonds (Series C)/ (Prerefunded), 3/15/95
(@ 103) Aaa 5,132,910
--------------------------------------------------------------------- ---------------
PENNSYLVANIA--4.4%
---------------------------------------------------------------------
8,340,000 Commonwealth of Pennsylvania, 3.80% GO Bonds,
4/15/96 AA- 8,423,483
---------------------------------------------------------------------
1,155,000 Dauphin County, PA, General Authority, 4.35% Revenue Bonds (Series
A)/(West Penn Hospital)/(MBIA Insured),
7/1/95 Aaa 1,174,623
---------------------------------------------------------------------
1,175,000 Dauphin County, PA, General Authority, 4.35% Revenue Bonds (Series
B)/(West Penn Hospital)/(MBIA Insured),
7/1/95 Aaa 1,194,963
---------------------------------------------------------------------
1,375,000 Montgomery County, PA, Higher Education and Health Authority, 5.25%
Revenue Bonds (Abington Memorial Hospital)/(AMBAC Insured), 6/1/94 AAA 1,392,765
---------------------------------------------------------------------
3,690,000 Pittsburgh, PA, 4.15% GO Bonds (AMBAC Insured),
9/1/95 Aaa 3,745,129
--------------------------------------------------------------------- ---------------
Total 15,930,963
--------------------------------------------------------------------- ---------------
SOUTH CAROLINA--3.4%
---------------------------------------------------------------------
5,500,000 Piedmont Municipal Electric Agency, SC, 4.25% Power Supply Revenue
Bonds, (Prerefunded),
1/1/95 (@102) Aaa 6,089,270
---------------------------------------------------------------------
2,000,000 Piedmont Municipal Power Agency, 7.00% Refunding Revenue Bonds
(Series A)/(AMBAC Insured) (Callable
1/1/99 @102) AAA 2,226,780
---------------------------------------------------------------------
$ 2,300,000 South Carolina, 5.05% UT GO Capital Improvement Bonds, 3/1/95 Aaa $ 2,404,811
---------------------------------------------------------------------
1,500,000 South Carolina, 7.60% GO Bonds (Series U), 2/1/95 Aaa 1,572,945
--------------------------------------------------------------------- ---------------
Total 12,293,806
--------------------------------------------------------------------- ---------------
TENNESSEE--3.0%
---------------------------------------------------------------------
1,000,000 Nashville & Davidson, TN, Metropolitan Government, 4.25% Revenue
Bonds (Prerefunded), 1/1/95 (@102) Aaa 1,088,760
---------------------------------------------------------------------
3,225,000 Tennessee, 6.375% GO Bonds (Series 1991A), 6/1/94 AA+ 3,278,890
---------------------------------------------------------------------
3,000,000 Tennessee, 6.75% GO Bonds (Series 1992A), 7/1/95 AA+ 3,164,250
---------------------------------------------------------------------
3,250,000 Tennessee, 6.90% GO Bonds (Series 1991B), 6/1/94 AA+ 3,311,360
--------------------------------------------------------------------- ---------------
Total 10,843,260
--------------------------------------------------------------------- ---------------
TEXAS--8.2%
---------------------------------------------------------------------
1,000,000 Arlington, TX, 6.70% Waterworks & Sewer Refunding Revenue Bonds
(Series A)/(AMBAC Insured), 6/1/96 AAA 1,073,970
---------------------------------------------------------------------
1,000,000 El Paso, TX, 10.00% Water & Sewer Revenue Bonds,
3/1/94 Aa 1,012,980
---------------------------------------------------------------------
4,035,000 Fort Worth, TX, Water & Sewer System, 4.85% Revenue Refunding Bonds
(Series 1991B), 2/15/94 AA 4,048,376
---------------------------------------------------------------------
1,290,000 Houston, TX, ISD, 4.00% LT GO School House Bonds,
8/15/95 Aaa 1,306,964
---------------------------------------------------------------------
7,000,000 Northside, TX, ISD, 4.10% UT GO Bonds, 2/1/96 Aaa 7,104,580
---------------------------------------------------------------------
5,000,000 San Antonio, TX, Electric & Gas System, 4.00% Revenue Bonds, 2/1/95 Aa 5,043,650
---------------------------------------------------------------------
5,000,000 San Antonio, TX, Electric & Gas System, 5.60% Revenue Bonds (Series
1991A), 2/1/94 Aa 5,013,045
---------------------------------------------------------------------
2,425,000 Texas State Public Property Finance Corp., 4.30% Refunding Revenue
Bonds (Series 1993)/(Mental Health and Mental Retardation Center),
9/1/97 AAA 2,467,656
---------------------------------------------------------------------
$ 2,500,000 Texas Water Development Board, 4.35% Senior Lien Revenue Bonds
(Series 1992), 7/15/95 AA $ 2,540,150
--------------------------------------------------------------------- ---------------
Total 29,611,371
--------------------------------------------------------------------- ---------------
UTAH--4.6%
---------------------------------------------------------------------
8,000,000 Granite City School District, UT, Board of Education, 4.00% GO
Refunding Bonds (Series 1992), 6/1/95 Aa 8,091,040
---------------------------------------------------------------------
1,000,000 Intermountain Power Agency, UT, 11.00% Power Supply Revenue Bonds
(Prerefunded), 1/1/94 (@103) Aaa 1,030,000
---------------------------------------------------------------------
1,800,000 Intermountain Power Agency, UT, 3.70% Power Supply Revenue Bonds
(Series 1993C), 7/1/96 AA 1,815,408
---------------------------------------------------------------------
3,000,000 Intermountain Power Agency, UT, 7.75% Power Supply Revenue Bonds
(Prerefunded), 7/1/96 (@102) Aaa 3,359,190
---------------------------------------------------------------------
2,000,000 Intermountain Power Agency, UT, 8.75% Power Supply Revenue Bonds
(Prerefunded), 7/1/95 (@102) Aaa 2,203,160
--------------------------------------------------------------------- ---------------
Total 16,498,798
--------------------------------------------------------------------- ---------------
VERMONT--0.7%
---------------------------------------------------------------------
2,500,000 Vermont, 4.64% GO Bonds (Series A), 2/1/95 Aa 2,615,100
--------------------------------------------------------------------- ---------------
VIRGINIA--3.9%
---------------------------------------------------------------------
7,500,000 Fairfax County, VA, 8.25% Public Improvement Bonds (Series 1992A),
4/1/95 Aaa 7,979,925
---------------------------------------------------------------------
3,740,000 Newport News, VA, 4.10% GO Refunding Bonds (Series 1992B), 7/1/95 Aa 3,793,781
---------------------------------------------------------------------
2,350,000 Virginia Beach, VA, 6.10% UT GO Bonds (Series 1991B),
8/1/94 AA 2,399,139
--------------------------------------------------------------------- ---------------
Total 14,172,845
--------------------------------------------------------------------- ---------------
WASHINGTON--5.5%
---------------------------------------------------------------------
1,445,000 Seattle, WA, 4.75% Various Purpose LT GO Bonds, 3/1/95 Aa1 1,471,198
---------------------------------------------------------------------
$ 4,865,000 Seattle, WA, 9.70% Municipal Light and Power Revenue Bonds
(Prerefunded), 9/1/95 (@102) Aaa $ 5,476,385
---------------------------------------------------------------------
5,550,000 Tacoma, WA, 9.375% Public Utility & Lighting Revenue Bonds
(Prerefunded), 1/1/96 (@102) AAA 6,297,863
---------------------------------------------------------------------
1,000,000 Washington State, 2.475% UT GO Bonds, 6/1/95 Aa 1,052,790
---------------------------------------------------------------------
1,500,000 Washington State, 4.55% Various Purpose GO Refunding Bonds (Series
1992A), 2/1/95 (@106) Aa 1,521,764
---------------------------------------------------------------------
2,955,000 Washington State, 5.60% Various Purpose GO Bonds (Series 1991B),
6/1/94 Aa 2,993,740
---------------------------------------------------------------------
1,000,000 Washington State, 6.80% Various Purpose GO Bonds,
4/1/95 Aa 1,044,640
--------------------------------------------------------------------- ---------------
Total 19,858,380
--------------------------------------------------------------------- ---------------
WISCONSIN--3.3%
---------------------------------------------------------------------
2,535,000 Milwaukee, WI, 4.00% UT GO Metropolitan Sewer District Bonds, 5/1/95 Aa 2,717,266
---------------------------------------------------------------------
1,970,000 Milwaukee, WI, 6.00% UT GO Public Improvement Bonds (Series CA),
6/15/95 Aa 2,047,203
---------------------------------------------------------------------
3,000,000 Wisconsin State, 6.40% GO Bonds (Series A), 5/1/99 Aa 3,303,840
---------------------------------------------------------------------
1,000,000 Wisconsin State, 6.40% UT GO Bonds (Series A), 5/1/95 Aa 1,043,240
---------------------------------------------------------------------
2,700,000 Wisconsin State, 8.80% GO Bonds (Series 1988B)/ (Prerefunded), 4/1/94
(@102) AAA 2,771,927
--------------------------------------------------------------------- ---------------
Total 11,883,476
--------------------------------------------------------------------- ---------------
TOTAL MUNICIPAL SECURITIES 361,275,826
--------------------------------------------------------------------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--0.3%
- ------------------------------------------------------------------------------------
MARYLAND--0.0%
---------------------------------------------------------------------
100,000 Montgomery County, MD, EDA Weekly VRDNs (U.S. Pharmaceutical,
Inc.)/(Chemical Bank LOC) VMIG1 100,000
--------------------------------------------------------------------- ---------------
PUERTO RICO--0.3%
---------------------------------------------------------------------
$ 1,000,000 Government Development Bank of Puerto Rico Weekly VRDNs (Credit
Suisse and Sumitomo Bank Ltd. LOCs) A-1+ $ 1,000,000
---------------------------------------------------------------------
TENNESSEE--0.0%
---------------------------------------------------------------------
100,000 Chattanooga-Hamilton County, TN, Hospital Authority Daily VRDNs
(Erlanger Medical Center Guaranty) A-1 100,000
--------------------------------------------------------------------- ---------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES 1,200,000
--------------------------------------------------------------------- ---------------
TOTAL MUNICIPAL SECURITIES
(IDENTIFIED COST $358,432,902) $ 362,475,826\
--------------------------------------------------------------------- ---------------
</TABLE>
* See Notes to Portfolio of Investments pages 17 and 18.
\ The cost of investments for Federal tax purposes amounts to $358,432,902. The
net unrealized appreciation of investments on a Federal tax cost basis amounts
to $4,042,924 which is comprised of $4,131,063 appreciation and $88,139
depreciation at December 31, 1993.
Note: The categories of investments are shown as a percentage of net assets
($358,222,349) at December 31, 1993.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond
Assurance Corporation MBIA -- Municipal Bond Investors
Assurance
EDA -- Economic Development Authority
OID -- Original Issue Discount
FGIC -- Financial Guaranty Insurance
Company PCA -- Pollution Control Authority
Q-SBLF-- Qualified State Bond Loan Fund
GO -- General Obligation
TANs -- Tax Anticipation Notes
HEFA -- Health and Education Facilities
Authority UT -- Utah/Unlimited Tax
VA -- Virginia/Veterans Administration
ISD -- Independent School District
VRDNs -- Variable Rate Demand Notes
LOC -- Letter of Credit
LOCs -- Letters of Credit
LT -- Limited Tax
</TABLE>
(See Notes which are an integral part of the financial statements)
SHORT-TERM MUNICIPAL TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
The four highest ratings of Moody's Investor's Service, Inc. ("Moody's") for
municipal bonds are Aaa, Aa, A, and Baa. Municipal bonds rated Aaa are judged to
be of the "best quality". The rating of Aa is assigned to municipal bonds which
are of "high quality by all standards," but as to which margins of protection or
other elements make long-term risks appear somewhat larger than Aaa rated
municipal bonds. The Aaa and Aa rated municipal bonds comprise what are
generally known as "high grade bonds". Municipal bonds which are rated A by
Moody's possess many favorable investment attributes and are considered "upper
medium grade obligations". Factors giving security to principal and interest of
A rated municipal bonds are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future. Bonds which
are rated Baa are considered as "medium grade obligations," i.e., they are
neither highly protected nor poorly secured. The letter ratings carry numerical
modifiers with 1 indicating the higher end of the rating category, 2 indicating
the mid-range and 3 indicating the lower end of the rating category.
Moody's highest rating for state and municipal short-term securities is
MIG1/VMIG1. Short-term municipal securities rated MIG1/VMIG1 are of the best
quality. They have strong protection from established cash flows of funds for
their servicing or have established a broad-based access to the market for
refinancing or both. The VMIG1 rating denotes that the security has a demand
feature. The rating (P-1) is the highest commercial paper rating assigned by
Moody's.
The four highest ratings of Standard & Poor's Corporation ("Standard & Poor's")
for municipal bonds are AAA (Prime), AA (High Grade), A (Good Grade), and BBB
(Medium Grade). Municipal bonds rated AAA are "obligations of the highest
quality". The rating of AA is accorded issues with investment characteristics
"only slightly less marked than those of the prime quality issues". The category
of A describes "the third strongest capacity for payment of debt service".
Principal and interest payments on bonds in this category are regarded as safe.
It differs from the two higher ratings because with respect to general
obligation bonds there is some weakness, either in the local economic base, in
debt burden, in the balance between revenues and expenditures, or in quality of
management. Under certain adverse circumstances, any one such weakness might
impair the ability of the issuer to meet debt obligations at some future date.
With respect to revenue bonds, debt service coverage is good, but not
exceptional. Stability of the pledge revenues could show some variations because
of increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Bonds which are rated BBB
(Medium Grade) are considered as medium grade obligations, i.e., the lowest
investment grade security rating. The ratings from AA to B may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
Standard & Poor's highest rating for municipal commercial paper is A1.
Short-term municipal commercial paper rated A1 is the best quality. Short-Term
Municipal Tax-Exempt Project Notes (PN) are backed by the full faith and credit
of the United States with payment of principal and interest guaranteed by the
U.S. Government. They are, therefore, considered for purposes of the Fund, as
having the equivalent of Moody's Aaa or MIG1 rating or S&P's AAA or A1 rating.
Ratings used are
those assigned to short-term securities by the rating services; where short-term
securities are not rated, ratings of longer-term securities are used.
NR indicates that neither the bonds nor the obligor or credit enhancer are
currently rated by S&P's, Moody's, or Fitch with respect to short-term
indebtedness. However, management considers them to be of comparable quality to
securities rated A-1, P-1, or F-1.
NR (1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by Standard & Poor's or "Aaa" by Moody's.
NR (2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by Standard & Poor's or "Aa" by Moody's.
NR (3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by Standard & Poor's or Moody's.
(See Notes which are an integral part of the financial statements)
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1993
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------
Investments in securities, at value (Note 1A)
(identified and tax cost $358,432,902) $ 362,475,826
- ------------------------------------------------------------------------------------------------
Cash 66,509
- ------------------------------------------------------------------------------------------------
Interest receivable 7,006,101
- ------------------------------------------------------------------------------------------------
Receivable for Trust shares sold 620,379
- ------------------------------------------------------------------------------------------------
Prepaid/deferred expenses 32,879
- ------------------------------------------------------------------------------------------------ ---------------
Total assets 370,201,694
- ------------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------------
Payable for investments purchased $ 10,446,491
- --------------------------------------------------------------------------------
Dividends payable (Note 2) 826,850
- --------------------------------------------------------------------------------
Payable for Trust shares redeemed 706,004
- -------------------------------------------------------------------------------- --------------
Total liabilities 11,979,345
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSETS for 34,601,407 shares of beneficial interest outstanding $ 358,222,349
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------
Paid in capital 360,804,084
- ------------------------------------------------------------------------------------------------
Unrealized appreciation on investments 4,042,924
- ------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (6,624,659)
- ------------------------------------------------------------------------------------------------ ---------------
Total $ 358,222,349
- ------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
- ------------------------------------------------------------------------------------------------
Institutional Shares (net assets of $344,702,478 / 33,295,516 shares of beneficial interest
outstanding) $10.35
- ------------------------------------------------------------------------------------------------ ---------------
Institutional Service Shares (net assets of 13,519,879 / 1,305,891 shares of beneficial interest
outstanding) $10.35
- ------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1993
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest income (Note 1B) $ 7,440,828
- ----------------------------------------------------------------------------------------------------
Expenses:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 684,729
- ---------------------------------------------------------------------------------------
Trustees' fees 7,594
- ---------------------------------------------------------------------------------------
Administrative personnel and services (Note 4) 202,610
- ---------------------------------------------------------------------------------------
Custodian, transfer and dividend disbursing agent fees and expenses 55,177
- ---------------------------------------------------------------------------------------
Trust share registration costs 33,947
- ---------------------------------------------------------------------------------------
Distribution services fee (Note 4) 6,129
- ---------------------------------------------------------------------------------------
Auditing fees 8,932
- ---------------------------------------------------------------------------------------
Legal fees 8,000
- ---------------------------------------------------------------------------------------
Printing and postage 9,250
- ---------------------------------------------------------------------------------------
State and local taxes 1,080
- ---------------------------------------------------------------------------------------
Insurance premiums 4,944
- ---------------------------------------------------------------------------------------
Miscellaneous 1,197
- --------------------------------------------------------------------------------------- -----------
Total expenses 1,023,589
- ---------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee (Note 4) 212,485
- --------------------------------------------------------------------------------------- -----------
Net expenses 811,104
- ---------------------------------------------------------------------------------------------------- -----------
Net investment income 6,629,724
- ---------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions (identified cost basis) (6,242)
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (507,015)
- ---------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (513,257)
- ---------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 6,116,467
- ---------------------------------------------------------------------------------------------------- -----------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
<S> <C> <C>
----------------------------------
<CAPTION>
1994* 1993
<S> <C> <C>
- ----------------------------------------------------------------------------- ---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------------
Net investment income $ 6,629,724 $ 10,622,845
- -----------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($6,242 net loss, and
$62,121 net loss, respectively, as computed for federal income tax purposes) (6,242) 19,108
- -----------------------------------------------------------------------------
Change in unrealized appreciation/depreciation on investments (507,015) 1,638,701
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets resulting from operations 6,116,467 12,280,654
- ----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2)--
- -----------------------------------------------------------------------------
Dividends to shareholders from net investment income
- -----------------------------------------------------------------------------
Institutional Shares (6,539,084) (10,622,845)
- -----------------------------------------------------------------------------
Institutional Service Shares (90,640) --
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from distributions to shareholders (6,629,724) (10,622,845)
- ----------------------------------------------------------------------------- ---------------- ----------------
CAPITAL STOCK TRANSACTIONS (NOTE 3)--
- -----------------------------------------------------------------------------
Proceeds from sale of shares 147,951,840 238,425,313
- -----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 1,607,489 1,899,201
- -----------------------------------------------------------------------------
Cost of shares redeemed (109,755,249) (128,151,579)
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Trust share transactions 39,804,080 112,172,935
- ----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets 39,290,823 113,830,744
- -----------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------
Beginning of period 318,931,526 205,100,782
- ----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 358,222,349 $ 318,931,526
- ----------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
* Six months ended December 31, 1993 (unaudited).
(See Notes which are an integral part of the Financial Statements)
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Trust is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end, management investment company. The following is a
summary of significant accounting policies consistently followed by the Trust in
the preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
The Trust provides two classes of Shares ("Institutional Shares" and
Institutional Services Shares"). Institutional Services Shares are identical in
all respects to Institutional Shares except that Institutional Services Shares
are sold pursuant to a Distribution Plan ("Plan") adopted in accordance with
Investment Company Act Rule 12b-1.
A. INVESTMENT VALUATIONS--Municipal bonds are valued at fair value. An
independent pricing service values the Trust's municipal bonds taking into
consideration yield, stability, risk, quality, coupon, maturity, type of
issue, trading characteristics, special circumstances of a security or
trading market, and any other factors or market data it deems relevant in
determining valuations for normal institutional size trading units of debt
securities and does not rely exclusively on quoted prices. The Trustees
have determined that the fair value of debt securities with remaining
maturities of 60 days or less shall be their amortized cost value unless
the particular circumstances of the security indicate otherwise.
B. INCOME--Interest income is recorded on the accrual basis. Interest income
includes interest earned net of premium, and original issue discount as
required by the Internal Revenue Code.
C. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of
the Internal Revenue Code, as amended (the "Code"), applicable to
investment companies and distribute to shareholders each year all of its
net income, including any net realized gain on investments. Accordingly, no
provision for federal income tax is necessary. At June 30, 1993, the Trust,
for federal income tax purposes, had a capital loss carryforward of
$6,618,094 which will reduce the Trust's taxable income arising from future
net realized gains on investments, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distributions to shareholders
which would otherwise be necessary to relieve the Trust of any liability
for federal income tax. Pursuant to the Code, such capital loss
carryforward will expire in 1994 ($12,483), 1995 ($1,449,467), 1996
($2,255,334), 1997 ($1,097,445), 1998 ($1,729,378), 1999 ($11,866) and 2001
($62,121). Dividends paid by the Trust from net interest earned on
tax-exempt municipal bonds are not includable by shareholders as gross
regular income for federal income tax purposes, because the Trust intends
to meet certain requirements of the Code applicable to regulated investment
companies which will enable the Trust to pay exempt-interest dividends.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. To the extent the Trust
engages in such transactions, it will do so for the purpose of acquiring
portfolio securities consistent with its investment objective and policies
and not for the purpose of investment leverage. The Trust will record a
when-issued security and the related liability on the trade date. Until the
securities are received and paid for, the Trust will maintain security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued
or delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
E. RECLASSIFICATIONS--During the current period, the Trust adopted Statement
of Position 93-2 Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions
by Investment Companies. Accordingly, permanent book and tax basis
differences relating to expired capital loss carryforwards have been
reclassified to paid-in capital. As of July 1, 1993, the cumulative effect
of such difference, totaling $405,407 was reclassified from undistributed
net realized loss on investments to paid-in capital. Net investment income,
net realized gains, and net assets were not affected by this change.
F. OTHER--Investment transactions are accounted for on the date the securities
are purchased or sold. Dividends to shareholders are recorded daily.
Capital gains distributions, if any, to shareholders are recorded on the
ex-dividend date.
(2) DIVIDENDS
The Trust computes its net income daily, and immediately prior to the
calculation of its net asset value at the close of business, declares and
records dividends to shareholders of record with respect to shares for which
payment in federal funds has been received. Payment of dividends is made monthly
in cash, or in additional shares at the net asset value on the payable date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Trust Shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
<S> <C> <C> <C> <C>
1994* 1993
<CAPTION>
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
<S> <C> <C> <C> <C>
- ------------------------------------------ --------------- ---------------- --------------- ----------------
Shares outstanding, beginning of period 30,753,281 $ 321,405,410 19,929,988 $ 209,232,475
- ------------------------------------------
Shares sold 12,582,019 131,268,172 23,007,231 238,425,313
- ------------------------------------------
Shares issued to shareholders in payment
of dividends declared 147,058 1,521,206 183,329 1,899,201
- ------------------------------------------
Shares redeemed (10,186,842) (106,502,550) (12,367,267) (128,151,579)
- ------------------------------------------ --------------- ---------------- --------------- ----------------
Shares outstanding, end of period 33,295,516 $ 347,692,238 30,753,281 $ 321,405,410
- ------------------------------------------ --------------- ---------------- --------------- ----------------
</TABLE>
*Six months ended December 31, 1993.
<TABLE>
<CAPTION>
YEAR
ENDED
12/31/93*
(UNAUDITED)
<S> <C> <C>
---------------------------
<CAPTION>
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS
- ------------------------------------------------------------------------------------ ----------- --------------
<S> <C> <C>
Shares outstanding, beginning of period -- $ --
- ------------------------------------------------------------------------------------
Shares sold 1,611,923 16,683,669
- ------------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 8,344 86,283
- ------------------------------------------------------------------------------------
Shares redeemed (314,376) (3,252,698)
- ------------------------------------------------------------------------------------ ----------- --------------
Shares outstanding, end of period 1,305,891 $ 13,517,254
- ------------------------------------------------------------------------------------ ----------- --------------
</TABLE>
*For the period from August 31, 1993 (date of initial public offering) to
December 31, 1993.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Federated Management, the Trust's investment Adviser ("Adviser"), receives for
its services an annual investment advisory fee equal to .40 of 1% of the Trust's
average daily net assets, subject to an undertaking to reimburse the Trust to
the extent of its advisory fee, the amount, if any, by which the Trust's
aggregate annual normal operating expenses, excluding interest, taxes, brokerage
commissions,
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
federal and state registration fees and extraordinary expenses exceeded .45 of
1% of average daily net assets. For the six months ended December 31, 1993,
Adviser earned an investment advisory fee of $684,729 of which $212,485 was
waived by Adviser in accordance with such undertaking.
During the six months ended December 31, 1993, the Trust engaged in purchase and
sale transactions with other funds advised by Adviser pursuant to Rule 17a-7 of
the Investment Company Act of 1940 amounting to $55,800,000 and $54,050,000,
respectively. These purchases and sales were conducted on an arms-length basis
insofar as they were transacted for cash consideration only, at independent
current market prices and without brokerage commission, fee or other
remuneration.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Trust will reimburse Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of the
Fund for fees the Trust paid which relate to the distribution and administration
of the Trust's Institutional Service Shares. The Plan provides that the Trust
may incur distribution expenses up to 0.25 of 1% of the average daily net assets
of the Institutional Service Shares annually, to pay commissions, maintenance
fees and to reimburse the distributor. For the six months ended December 31,
1993, FSC earned $6,129.
Administrative personnel and services were provided at approximate cost by
Federated Administrative Services, Inc. Certain of the Officers and Trustees of
the Trust are Officers and Directors of the above corporations.
(5) INVESTMENT TRANSACTIONS
Purchases, and sales and maturities, of investments excluding short-term
securities, for the six months ended December 31, 1993, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------
PURCHASES--
- --------------------------------------------------------------------------------------------------
Municipal bonds $ 66,916,689
- -------------------------------------------------------------------------------------------------- --------------
SALES AND MATURITIES--
- --------------------------------------------------------------------------------------------------
Municipal bonds $ 11,898,541
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
(6) SUBSEQUENT EVENT
On August 23, 1993, the shareholders of the Trust voted to allow the Trust to
establish and designate separate series and classes of shares.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies. Investment in these shares
involves risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
