FEDERATED SHORT-TERM MUNICIPAL TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
SUPPLEMENT TO PROSPECTUSES DATED AUGUST 31, 1998
At a meeting to be held on March 23, 1999, shareholders of the Fund will be
asked to vote on the changes described below. If approved by shareholders, these
changes will take effect as of April 1, 1999. Shareholders will be notified if
any of these changes are not approved. Please keep this supplement for your
records.
Shareholders will be asked to consider proposals:
(1) To elect seven Trustees.
(2) To ratify the selection of the Trust's independent auditors.
(3) To amend the Trust's fundamental investment policy on diversification
of its investments.
(4) To eliminate the Trust's fundamental investment policy on investing in
oil, gas, and minerals.
(5) To approve a clarifying amendment to the Trust's Investment Advisory
Agreement to exclude Rule 12b-1 fees and shareholder service fees from
the expense cap.
(6) To approve or disapprove an amendment and restatement of the Trust's
Declaration of Trust to permit the Board of Trustees to liquidate
assets of the Trust, its series or classes without seeking shareholder
approval.
January 22, 1999
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Federated Investors
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
www.federatedinvestors.com
Cusip 313907107
Cusip 313907206
G02551-02(1/99)
