FEDERATED INCOME TRUST
Institutional Shares
Institutional Service Shares
Supplement to Prospectuses and Statement of Additional Information, as
appropriate, dated May 31, 1999
I. At the June 28, 1999 shareholder meeting, shareholders approved the
following changes to become effective July 1, 1999:
(1) Elected seven Trustees.
(2) Ratified the selection of the Trust's independent
auditors.
(3) Made changes to the Trust's fundamental investment
policies:
(a) Amended the Trust's fundamental investment policy regarding borrowing money
and issuing senior securities to read as follows:
"The Trust may borrow money, directly or
indirectly, and issue senior securities to the
maximum extent permitted under the 1940 Act."
(b) Amended the Trust's fundamental investment policy regarding lending by the
Trust to read as follows:
"The Trust may not make loans, provided that this
restriction does not prevent the Trust from
purchasing debt obligations, entering into
repurchase agreements, lending its assets to
broker/dealers or institutional investors and
investing in loans, including assignments and
participation interests."
(c) Amended and made non-fundamental the Trust's
fundamental investment policy regarding buying
securities on margin to read as follows:
"The Trust will not purchase securities on
margin, provided that the Trust may obtain
short-term credits necessary for the clearance of
purchases and sales of securities, and further
provided that the Trust may make margin deposits
in connection with its use of financial options
and futures, forward and spot currency contracts,
swap transactions and other financial contracts
or derivative instruments."
(d) Amended and made non-fundamental the Trust's fundamental investment policy
regarding pledging assets to read as follows:
"The Trust will not mortgage, pledge, or
hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in
connection with any permissible borrowing or to
collateral arrangements in connection with
permissible activities."
(e) Amended and made non-fundamental the Trust's
fundamental investment policy regarding investing
in other investment companies to read as follows:
"The Trust may invest its assets in securities of
other investment companies, including securities
of affiliated investment companies, as an
efficient means of carrying out its investment
policies and managing its uninvested cash."
(f) Amended and made non-fundamental the Trust's
fundamental investment policy regarding
investments in U.S. government securities to read
as follows:
"The Trust may invest in U.S. government
securities. The term "U.S. government securities"
as used herein refers to (1) obligations of the
United States and (2) obligations issued or fully
guaranteed as to principal and interest by a
Federal Home Loan Bank, the Federal National
Mortgage Association, the Government National
Mortgage Association, a Bank for Cooperatives
(including the Central Bank for Cooperatives), a
Federal Land Bank, a Federal Intermediate Credit
Bank, The Tennessee Valley Authority, the
Export-Import Bank of the United States, The
Commodity Credit Corporation, The Federal
Financing Bank, The Student Loan Marketing
Association, The Federal Home Loan Mortgage
Association or The National Credit Union
Administration."
(g) Amended and made non-fundamental the Trust's
fundamental investment policy regarding
investments in collateralized mortgage
obligations and mortgage-related securities to
read as follows:
"The Trust may invest only in CMOs which are
rated AAA by a recognized rating agency, and
which may be: (a) collateralized by pools of
mortgages in which each mortgage is guaranteed as
to payment of principal and interest by an agency
or instrumentality of the U.S. government; (b)
collateralized by pools of mortgages in which
payment of principal and interest is guaranteed
by the issuer and such guarantee is
collateralized by U.S. government securities; and
(c) securities in which the proceeds of the
issuance are invested in mortgage securities and
payment of the principal and interest are
supported by the credit of an agency or
instrumentality of the U.S. government. In
addition, the Trust may invest in
mortgage-related securities, as defined in
Section 3(a)(41) of the Securities Exchange Act
of 1934, which are issued by private entities,
such as investment banking firms and companies
related to the construction industry."
(h) Made non-fundamental the Trust's fundamental
investment policy regarding dollar roll transactions;
(i) Made non-fundamental the Trust's fundamental
investment policy regarding investing in
repurchase agreements;
(j) Made non-fundamental the Trust's fundamental
investment policy regarding engaging in
when-issued and delayed delivery transactions;
and
(k) Made non-fundamental the Trust's fundamental
investment policy regarding lending portfolio securities.
(4) Eliminated certain of the Trust's fundamental
investment policies:
(a) Removed the Trust's fundamental investment policy regarding selling
securities short; and
(b) Removed the Trust's fundamental investment policy on engaging in portfolio
transactions.
(5) Approved an amendment and restatement of the Trust's fundamental investment
objective to read as follows:
"The investment objective of the Trust in current income."
(6) Approved an amendment and restatement to the Trust's Declaration of Trust:
(a) To require the approval of a majority of the
outstanding voting securities in the event of the
sale and conveyance of the assets of the Trust to
another trust or corporation;
(b) To permit the Board of Trustees to liquidate the assets of the Trust without
seeking shareholder approval; and
(c) To permit the Board of Trustees to change the name of the Trust without
seeking shareholder approval.
II. The following actions were taken by the Board of Trustees with regard to
non-fundamental investment policies:
(1) Approved the elimination of the following undertaking:
"The Trust has no present intent to borrow money or pledge securities in excess
of 5% of the value of its total assets.
(2) Approved the elimination of the Trust's
non-fundamental investment policy pertaining to
when-issued and delayed delivery transactions that
provides that the Trust will not engage in such
transactions to an extent that would cause the
segregation of more than 20% of the value of its
assets.
(3) Approved an amendment to the Trust's non-fundamental investment policy
regarding investing in illiquid securities to read as follows:
"The Trust will not purchase securities for which
there is no readily available market, or enter into
repurchase agreements or purchase time deposits
maturing in more than seven days, if immediately
after and as a result, the value of such securities
would exceed, in the aggregate, 15% of the Trust's
net assets."
June 28, 1999
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Federated Investors
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Cusip 314199100
Cusip 314199209
G02647-03 (6/99)
