FEDERATED GNMA TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
SUPPLEMENT TO PROSPECTUSES DATED MARCH 31, 1999
At a Special Meeting of Shareholders to be held on June 21, 1999, shareholders
will be asked to vote on the changes described below. If approved by
shareholders, these changes will take effect as of July 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 the following proposals:
(1) To elect seven Trustees.
(2) To ratify the selection of the Trust's independent auditors.
(3) To make changes to the Trust's fundamental investment policies:
(a) To amend the Trust's fundamental investment policy regarding
diversification;
(b) To amend the Trust's fundamental investment policy regarding borrowing
money and issuing senior securities;
(c) To amend the Trust's fundamental investment policy regarding
investments in real estate;
(d) To amend the Trust's fundamental investment policy concerning
investments in commodities;
(e) To amend the Trust's fundamental investment policy regarding
underwriting securities;
(f) To amend the Trust's fundamental investment policy regarding lending
by the Trust;
(g) To amend, and to make non-fundamental, the Trust's fundamental
investment policy on buying securities on margin; and
(h) To amend, and to make non-fundamental, the Trust's fundamental
investment policy on pledging assets.
(4) To eliminate the Trust's fundamental investment policy regarding selling
securities short.
(5) To approve 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 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.
(6) To transact such other business as may properly come before the
meeting or any adjournment thereof.
April 23, 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 314184102
Cusip 314184201
G02645-02 (4/99)
