FEDERATED GNMA TRUST, 497, 1996-01-08

FEDERATED GNMA TRUST
497, 1996-01-08

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FEDERATED GNMA TRUST

Institutional Service Shares

SUPPLEMENT TO PROSPECTUS DATED MARCH 31, 1995
Please insert the following as a new section immediately following the sub-
section entitled "By Mail" on page 10:
     "EXCHANGE PRIVILEGE
     Financial institutions that maintain master accounts with an aggregate
     investment of at least $400 million in certain funds which are advised
     or distributed by affiliates of Federated Investors may exchange their
     Shares for Institutional Shares of the Trust."

                                                                 January 8, 1996











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