Federated
American Leaders
Fund, Inc.
(formerly, American
Leaders Fund, Inc.)
27th Annual Report
March 31, 1996
Established 1969
GROWTH AND INCOME
President's Message
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[PHOTO APPEARS HERE]
Dear Fellow Shareholder:
I am pleased to present the 27th Annual Report for Federated American Leaders
Fund, Inc., formerly known as American Leaders Fund, Inc. The fund's name now
begins with "Federated" to make it easy for investors to locate all Federated
funds in mutual fund listings of newspapers and other publications. In
addition, Fortress Shares of the fund are now known as Class F Shares.
This report covers the twelve-month period from April 1, 1995, through March
31, 1996. It begins with a discussion with the fund's co-portfolio managers,
Peter R. Anderson, Senior Vice President, and Timothy E. Keefe, Vice
President, Federated Advisers. Following this discussion are three additional
items of shareholder interest. First is a series of graphs that display the
fund's performance with income dividends reinvested, and the investment
results of making additional investment in the fund shares with dividends
reinvested. Second is a listing of the 67 plus high-quality common stocks in
the fund at this time. Third is the publication of the fund's financial
statements. The selected high-quality common stocks performed well in the
highly favorable stock market environment during the twelve-month period.
Shareholders experienced very fine performance. The fund's total performance
adds capital appreciation, income dividends, and realized gain to show 30%
increase for the twelve-month period. The performance of the fund's share
classes based on net asset value for the twelve-month period ended March 31,
1996, is listed below.*
Total Return Income Capital Gains Net Asset Value Increase
Class A Shares 32.00% $0.17 $0.63 $15.66 to $19.78=26%
Class B Shares 31.10% $0.05 $0.63 $15.67 to $19.79=26%
Class C Shares 31.14% $0.03 $0.63 $15.66 to $19.80=26%
Class F Shares 31.95% $0.16 $0.63 $15.66 to $19.78=26%
Over the twelve-month period, Federated American Leaders Fund, Inc. assets more
than doubled, reaching $816.7 million on March 31, 1996. This robust growth
reflects a sizable increase in the value of fund shares, as well as the
continued confidence of present and new shareholders who purchased shares of
this attractive high-quality common stock investment.
Established in 1969, Federated American Leaders Fund, Inc. offers more than
28,000 shareholders a diversified portfolio of high-quality, blue-chip stocks.
These 67 holdings, which represent 12 major industry groups, include leaders
like Bristol-Myers Squibb, Citicorp, Consolidated Rail, Digital Equipment,
Disney, IBM, Microsoft, Mobil, and Nike.
* Performance quoted represents past 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. Total returns for the
period based on offering price for Class A Shares, Class B Shares, Class C
Shares, and Class F Shares were 24.75%, 25.40%, 30.08%, and 29.56%,
respectively.
- ------------------------------------------------------------------------------
We trust you were pleased with the positive performance of your investment in
Federated American Leaders Fund, Inc. Remember, reinvesting your dividends is
a convenient way to build the value of your account, and helps your shares
increase through the benefit of quarterly compounding.
Sincerely,
John F. Donahue
President
May 15, 1996
Investment Review
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[PHOTO APPEARS HERE]
Tim Keefe
Vice President
Federated Advisers
Q
Tim, during the period, the stock market continued to climb to new levels. What
are your comments on the market's performance?
A
With the Standard & Poor's 500 Index ("S&P 500")* up a remarkable 37.50%, 1995
will be remembered as one of the most favorable years for equity investors.
The market's strong performance had some extremely powerful underpinnings.
Long-term rates dropped from 8% to 6% while inflation fears abated in the
midst of rising corporate profits. Slow, steady growth coupled with low
inflation and declining interest rates is an ideal environment for an
investment in financial securities, particularly equities. In summary, 1995 was
a very good year.
However, the first quarter of 1996 introduced a level of volatility in the
equity markets that investors have not seen in over five years. The market was
evidently surprised by the good news in the reported strength in the economy:
job growth is up, the construction markets are firming, and the manufacturing
sector is working more hours per week. There are, however, continued signs of
weakness: building permits are flat and retail sales are only modestly
stronger. Taken together, the positives are outweighing the negatives, which
should result in modest growth in gross domestic product for the first quarter
of 1996.
Q
How did Federated American Leaders Fund, Inc. perform for its shareholders in
this favorable environment?
A
For calendar year 1995, the fund's Class A Shares, Class B Shares, Class C
Shares and Class F Shares, respectively, had total returns of 37.00%, 36.19%,
36.15% and 36.97%, respectively, based on net asset value.** This includes
capital appreciation of the shares, and adding income dividends and realized
capital gain to the fund's net asset value. The returns for the S&P 500 and the
average growth and income fund tracked by Lipper Analytical Services, Inc.
were 37.50% and 30.82%, respectively. For the one-, five- and 10 year periods
ended March 31, 1996, Federated American Leaders
* The Standard &Poor's 500 Daily Stock Price Index of 500 Common Stocks, a
composite index of common stocks in industry, transportation, and financial
and public utility companies, can be used to compare the total returns of
funds whose portfolios are invested primarily in common stocks. This index
is unmanaged and actual investments cannot be made in an index.
** Performance quoted represents past 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. Total return based on
offering price for Class A Shares, Class B Shares, Class C Shares and Class F
Shares, respectively, was 29.44%, 30.48%, 35.13% and 34.55%, respectively,
for calendar year 1995.
- --------------------------------------------------------------------------------
Fund, Inc. ranked 81st out of 480 funds, 47th out of 201 funds and 53rd out of
118 funds, respectively, in the Lipper growth and income category.*
Over the twelve-month period covered by this report, Federated American Leaders
Fund, Inc. Class A Shares achieved a total return of 32% based on net asset
value. Contributing to this return was a very healthy 26% increase in net asset
value.
Q
What industry sectors have been driving the fund's performance? And do these
sectors continue to offer high growth potential?
A
The fund's management continues to focus on companies that are undervalued
based on historic measures and potential growth. The fund's overweight in
finance, accounting for roughly 19% of its assets, is the result of our belief
that the "herd mentality," which is an important driver of human behavior,
continues to drive the consolidation in this sector forward. We like the
risk/reward characteristics of investing in a slow growth industry that is on
a decided path toward consolidation. These corporations enjoy free cash flow
per share that is growing more rapidly than revenue growth due to cost
cutting, consolidations and share repurchases. In addition, there is tremendous
pressure on management to perform for the shareholder, or they will become
victims of consolidation themselves.
In the technology sector, where the fund has approximately 20% of its
investments, management continues to have a percentage of its exposure in the
defense electronics industry which is in the later innings of its own
consolidation. Lockheed Martin, Litton, Raytheon and General Dynamics should
continue to benefit in this area. Ceridian, GM Corp., Class E, BMC Software,
and Microsoft are strategically positioned to perform well in the segment of
technology with the highest recurring revenue streams, highest returns on
equity, and highest returns on sales. Finally, in the computer systems segment
of technology, we own IBM, Hewlett-Packard, and Digital Equipment. We believe
that while the technology risk is indeed the highest, the valuations are
compelling, and as a result offer an extremely attractive risk/reward
situation, especially when you consider that each of these companies has
successfully increased the percentage of revenues that are recurring in nature.
* Lipper rankings are based on total return and do not take sales charges into
account.
- ------------------------------------------------------------------------------
Q
Please comment on the fund's additions during the period?
A
Abbot Laboratories makes healthcare products, including drugs, diagnostic
tests, intravenous solutions, laboratory and hospital instruments, and
prepared infant formula and nutrition products. The stock took a tumble
following an earnings report that was a mere one penny shy of consensus
estimates. While the long-term growth rate has slowed from high-teens to
low-teens, the stock should perform well relative to the market given its high
cash flow, high predictability of earnings, strong management teams, and a
strong pipeline of new products.
Ceridian is an information services (50% of revenues, 70% of profits) and
defense electronics (50% of revenues, 30% of profits) firm. This stock shows
up on our screens as undervalued, and fits our description of an exceptional
business run by an excellent management team. The stock is trading at an
attractive valuation caused by short-term fears in the market. Ceridian also
provides payroll processing: 1996 will be a transition year as management is
in the process of installing its new payroll processing system throughout its
customer base. Ceridian recently acquired Comdata, which will add $0.20 to
next year's earnings. Comdata is the leading provider of transaction processing
services to the gaming and transportation industries. Ceridian also owns
Arbitron which provides media and market research information and has
experienced a good growth rate in the low-teens with high returns on invested
capital.
Millipore manufactures disposable filters for the microelectronics and the
bio/pharmaceutical industries. Both industries have experienced and should
continue to experience powerful growth. Millipore's high technology content
disposable filters are an essential part of the manufacturing process, yet
constitute a minimal cost (less than 1%) of total cost of goods sold. Barriers
to entry are extremely high. The corporation's free cash flow generation is
outstanding, as is its return on equity and sales. Management has used free
cash to repurchase its shares and has been able to raise the dividend.
R. P. Sherer develops and produces drug delivery systems that regulate the
dosage, rate of absorption, and place of release, thereby increasing a drug's
overall efficacy. Sherer has a very predictable, rapidly growing cash flow from
a very diversified mix of products with great international exposure (80%).
Sherer also enjoys an enormous cost advantage over its competition because of
its manufacturing volume. In addition, we expect profit margins to expand as
they replace the lower margined,
- -----------------------------------------------------------------------------
nutrition-based gels with the high margin drugs being offered by the large
multinational ethical drug companies who are vigorously defending the large
number of patent expirations over the next few years.
Q
With stock prices at current levels, where do you look for good companies at
attractive prices?
A
For the present, I would reiterate that we will continue to follow our
disciplined approach that seeks the best relative values in the market.
Corporate consolidations, restructurings, and asset plays continue to be major
opportunities in the selection of fund candidates.
In terms of sectors, the fund's largest sector weight is in technology, which
currently constitutes about 20% of assets, keeping in mind that a little less
than one-third of that is in defense electronics which continues to consolidate
rapidly. Also, I'd point out that about one-fifth of that 20% is exposed to
some attractive companies in the high-return software and data outsourcing
area. Finally, the remaining amount in the technology sector is invested in
the more volatile part of the sector. Here, valuations are at levels where we
believe the risk/reward is extremely favorable.
The fund also has approximately 19% invested in finance. Consolidation in both
banking and insurance continues to be an extremely powerful theme driving
returns in these two segments. While the stocks' valuations are a bit fuller
than we would like, this trend coupled with a benign interest rate backdrop
should continue to bode well for this group.
The fund is underweight in the basic industry sector (3.4% versus the S&P 500's
6.8%). We continue to look for outstanding businesses that can add to
shareholder value in a weaker economic environment. The retail sector, also, is
underweight (2.0% versus the S&P 500's 4.7%).
Two Ways You May Seek to Invest for Success in
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- -------------------------------------------------------------------------------
Initial Investment:
If you had made an initial investment of $28,000 in the Class A Shares of
Federated American Leaders Fund, Inc. on 2/25/69, reinvested dividends and
capital gains, and didn't redeem any shares, your account would be worth
$400,494 on 3/31/96. You would have earned a 10.32%* average annual total
return for the 27-year investment life span.
One key to investing wisely is to reinvest all distributions in fund shares.
This increases the number of shares on which you can earn future dividends,
and you gain the benefit of compounding.
As of 3/31/96, the Class A Shares' average annual one-year, five-year, and
ten-year total returns were 24.75%, 13.81%, and 11.48%, respectively. Class B
Shares' average annual one-year and since inception (7/25/94) total returns
were 25.40% and 19.85%, respectively. Class C Shares' average annual one-year
and since inception (4/21/93) total returns were 30.08% and 15.06%,
respectively. Class F Shares' average annual one-year and since inception
(7/27/93) total returns were 29.56% and 14.75%, respectively.
GRAPHIC PRESENTATION "A1" OMITTED. SEE APPENDIX.
*Total return represents the change in the value of an investment in Class A
Shares after reinvesting all income and capital gains, and takes into account
the 5.5% sales charge applicable to an initial investment in Class A Shares.
Data quoted represents past performance and does not guarantee future results.
Investment return and principal value will fluctuate so an investor's shares,
when redeemed, may be worth more or less than their original cost.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- -------------------------------------------------------------------------------
One Step at a Time:
$1,000 invested each year for 27 years (rein-vesting all dividends and capital
gains) grew to $206,681.
With this approach, the key is consistency.
If you had started investing $1,000 annually in the Class A Shares of Federated
American Leaders Fund, Inc. on 2/25/69, reinvested your dividends and capital
gains and didn't redeem any shares, you would have invested only $28,000, but
your account would have reached a total value of $206,681* by 3/31/96. You
would have earned an average annual total return of 12.39%.
A practical investment plan helps you pursue long-term performance from
blue-chip stocks. Through systematic investing, you buy shares on a regular
basis and reinvest all earnings. An investment plan works for you when you
invest only $1,000 annually. You can take it one step at a time. Put time and
compounding to work!
GRAPHIC PRESENTATION "A2" OMITTED. SEE APPENDIX.
*No method of investing can guarantee a profit or
protect against loss in down markets. However, by investing regularly over time
and buying shares at various prices, investors can purchase more shares at
lower prices, and all accumulated shares have the ability to pay income to the
investor.
Because such a plan involves continuous investment, regardless of changing
price levels, the investor should consider whether or not to continue purchases
through periods of low price levels.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Hypothetical Investor Profile: Investing for a College Education
- -------------------------------------------------------------------------------
David and Joan Rice are a fictional couple who, like many shareholders, are
searching for a way to make their money grow over time.
David and Joan are planning for the college education of their child in 15
years. On March 31, 1981, they invested $5,000 in the Class A Shares of
Federated American Leaders Fund, Inc. Since then, David and Joan have made
additional investments of $250 every month.
As this chart shows, over 15 years, the original $5,000 investment along with
their additional monthly $250 investments totaling $50,000 has grown to
$180,330. This represents a 14.29% average annual total return. For the Rices,
a dedicated program of monthly investment really paid off.
GRAPHIC PRESENTATION "A3" OMITTED. SEE APPENDIX.
This hypothetical scenario is provided for illustrative pur-
poses only and does not represent the results obtained by any
particular shareholder. Past performance does not guarantee
future results.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
A History of Solid Earnings Eighteen 10-Year Periods
-
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$10,000 Invested with Distributions Reinvested
How a $10,000 investment grew during each
10-year period since fund inception.
This chart shows what your account would have been worth had you invested
$10,000 in Class A Shares at the beginning of these consecutive decades.
Over every 10-year period since the fund's inception, a $10,000 investment in
its Class A Shares (with all dividends and capital gains reinvested) grew in
value. At the end of each decade, no investor would have lost money.
GRAPHIC PRESENTATION "A4" OMITTED. SEE APPENDIX.
*This 10-year period is February 25, 1969 through March 31, 1979.
For each time period shown, share price fluctuated.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Serving A Wide Range of Investors
- -------------------------------------------------------------------------------
Federated American Leaders Fund, Inc. appeals to a broad range of investors
seeking long-term growth through blue-chip stocks.
The fund invests primarily in a diversified portfolio of stocks issued by some
of America's leading corporations. Fund shares are not guaranteed, and the
value of your investment may fluctuate. Mutual funds involve risk, including
possible loss of principal.
GRAPHIC PRESENTATION "A5" OMITTED. SEE APPENDIX.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Portfolio Update
- -------------------------------------------------------------------------------
GRAPHIC PRESENTATION "A6" OMITTED. SEE APPENDIX.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
(Class A Shares)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Federated
American Leaders Fund, Inc.
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000 in the
Federated American Leaders Fund, Inc. (Class A Shares) (the "Fund") from March
31, 1986 to March 31, 1996 compared to the Standard & Poor's 500 Index (S&P
500) and the Lipper Growth and Income Funds Average (LGIFA).
- --
GRAPHIC PRESENTATION "A7" OMITTED. SEE APPENDIX.
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than their original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge=$9,550) that was in effect prior to October 1, 1994. As of October 1,
1994, the maximum sales charge was 5.50%. The fund's performance assumes the
reinvestment of all dividends and distributions. The S&P 500 and the LGIFA
have been adjusted to reflect reinvestment of dividends on securities in the
index and average.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
- -
that the SEC requires to be reflected in the fund's performance. The index is
unmanaged.
The LGIFA represents the average of the total returns reported
- --
by all of the mutual funds designated by Lipper Analytical Services, Inc. as
falling into the category, and is not adjusted to reflect any sales charges.
However, these total returns are reported net of expenses or other fees that
the SEC requires to be reflected in a fund's performance.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
(Class B Shares)
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Growth of $10,000 Invested in Federated
American Leaders Fund, Inc.
(Class B Shares)
The graph below illustrates the hypothetical investment of $10,000 in the
Federated American Leaders Fund, Inc. (Class B Shares) (the "Fund") from July
25, 1994 (start of performance) to March 31, 1996, compared to the Standard &
Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average
-
(LGIFA).
--
GRAPHIC PRESENTATION "A8" OMITTED. SEE APPENDIX.
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than their original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the fund. The ending value
of the fund reflects a 5.50% contingent deferred sales charge on any
redemption less than one year from the purchase date. The fund's
performance assumes the reinvestment of all dividends and distributions.
The S&P 500 and the LGIFA have been adjusted to reflect reinvestment of
dividends on securities in the index and average.
** Total return quoted reflects all applicable sales charges and
contingent deferred sales charges.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
- -
that the SEC requires to be reflected in the fund's performance. This index
is unmanaged.
The LGIFA represents the average of the total returns reported by all of the
- --
mutual funds designated by Lipper Analytical Services, Inc. as falling into
the category, and is not adjusted to reflect any sales charges. However,
these total returns are reported net of expenses or other fees that the SEC
requires to be reflected in a fund's performance.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
(Class C Shares)
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Growth of $10,000 Invested in Federated
American Leaders Fund, Inc.
(Class C Shares)
The graph below illustrates the hypothetical investment of $10,000 in the
Federated American Leaders Fund, Inc. (Class C Shares) (the "Fund") from April
21, 1993 (start of performance) to March 31, 1996 compared to the Standard &
Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average
-
(LGIFA).
--
GRAPHIC PRESENTATION "A9" OMITTED. SEE APPENDIX.
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than their original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the fund. The ending value
of the fund reflects a 1.00% contingent deferred sales charge on any
redemption less than one year from the purchase date. The fund's
performance assumes the reinvestment of all dividends and distributions.
The S&P 500 and the LGIFA have been adjusted to reflect reinvestment of
dividends on securities in the index and average.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
- -
that the SEC requires to be reflected in the fund's performance. This index is
unmanaged.
The LGIFA represents the average of the total returns reported by all of the
- --
mutual funds designated by Lipper Analytical Services, Inc. as falling into
the category, and is not adjusted to reflect any sales charges. However,
these total returns are reported net of expenses or other fees that the SEC
requires to be reflected in a fund's performance.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
(Class F Shares)(formerly, Fortress Shares)
- -------------------------------------------------------------------------------
Growth of $10,000 Invested in Federated
American Leaders Fund, Inc.
(Class F Shares)
The graph below illustrates the hypothetical investment of $10,000 in the
Federated American Leaders Fund, Inc. (Class F Shares) (the "Fund") from July
27, 1993 (start of performance) to March 31, 1996 compared to the Standard &
Poor's 500 Index (S&P 500) and the Lipper Growth and Income Funds Average
-
(LGIFA).
--
GRAPHIC PRESENTATION "A10" OMITTED. SEE APPENDIX.
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than their original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the fund after deducting
the maximum sales charge of 1.00% ($10,000 investment minus $100 sales
charge = $9,900). The fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 and the LGIFA have been adjusted
to reflect reinvestment of dividends on securities in the index and average.
** The ending value of the fund reflects a contingent deferred sales charge of
1.00% on any redemption less than four years from the purchase date.
***Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
- -
that the SEC requires to be reflected in the fund's performance. This index is
unmanaged.
The LGIFA represents the average of the total returns reported by all of the
- --
mutual funds designated by Lipper Analytical Services, Inc. as falling into
the category, and is not adjusted to reflect any sales charges. However,
these total returns are reported net of expenses or other fees that the SEC
requires to be reflected in a fund's performance.
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Portfolio of Investments
- --------------------------------------------------------------------------------
March 31, 1996
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ---------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--87.3%
- -------------------------------------------------------------------------------------------------
BASIC INDUSTRY--3.4%
----------------------------------------------------------------------------------
151,000 Eastman Chemical Co. $ 10,437,875
----------------------------------------------------------------------------------
100,000 Great Lakes Chemical Corp. 6,737,500
----------------------------------------------------------------------------------
279,000 Millipore Corp. 10,671,750
---------------------------------------------------------------------------------- --------------
Total 27,847,125
---------------------------------------------------------------------------------- --------------
CONSUMER DURABLES--4.3%
----------------------------------------------------------------------------------
100,000 Chrysler Corp. 6,225,000
----------------------------------------------------------------------------------
183,600 Eastman Kodak Co. 13,035,600
----------------------------------------------------------------------------------
575,000 Mattel, Inc. 15,596,875
---------------------------------------------------------------------------------- --------------
Total 34,857,475
---------------------------------------------------------------------------------- --------------
CONSUMER NON-DURABLES--8.2%
----------------------------------------------------------------------------------
123,200 Avon Products, Inc. 10,564,400
----------------------------------------------------------------------------------
329,600 IBP, Inc. 8,446,000
----------------------------------------------------------------------------------
189,540 Kimberly-Clark Corp. 14,120,730
----------------------------------------------------------------------------------
204,900 Nike, Inc., Class B 16,648,125
----------------------------------------------------------------------------------
197,000 Philip Morris Cos., Inc. 17,286,750
---------------------------------------------------------------------------------- --------------
Total 67,066,005
---------------------------------------------------------------------------------- --------------
ENERGY MINERALS--3.8%
----------------------------------------------------------------------------------
166,100 Chevron Corp. 9,322,362
----------------------------------------------------------------------------------
42,100 Exxon Corp. 3,436,412
----------------------------------------------------------------------------------
160,000 Mobil Corp. 18,540,000
---------------------------------------------------------------------------------- --------------
Total 31,298,774
---------------------------------------------------------------------------------- --------------
FINANCE--18.7%
----------------------------------------------------------------------------------
225,000 Aflac, Inc. 7,031,250
----------------------------------------------------------------------------------
203,400 American Express Co. 10,042,875
----------------------------------------------------------------------------------
111,925 CIGNA Corp. 12,787,431
----------------------------------------------------------------------------------
126,200 Chemical Banking Corp. 8,897,100
----------------------------------------------------------------------------------
180,959 Citicorp $ 14,476,720
----------------------------------------------------------------------------------
</TABLE>
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ---------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
----------------------------------------------------------------------------------
204,300 Dean Witter, Discover & Co. 11,696,175
----------------------------------------------------------------------------------
200,000 Federal Home Loan Mortgage Corp. 17,050,000
----------------------------------------------------------------------------------
400,000 Federal National Mortgage Association 12,750,000
----------------------------------------------------------------------------------
22,400 First Interstate Bancorp 3,886,400
----------------------------------------------------------------------------------
258,600 Mellon Bank Corp. 14,255,325
----------------------------------------------------------------------------------
50,000 Merrill Lynch & Co., Inc. 3,037,500
----------------------------------------------------------------------------------
129,600 Providian Corp. 5,783,400
----------------------------------------------------------------------------------
274,232 The PMI Group, Inc. 11,718,223
----------------------------------------------------------------------------------
290,700 Travelers Group, Inc. 19,186,200
---------------------------------------------------------------------------------- --------------
Total 152,598,599
---------------------------------------------------------------------------------- --------------
HEALTH CARE--10.9%
----------------------------------------------------------------------------------
354,000 Abbott Laboratories 14,425,500
----------------------------------------------------------------------------------
112,700 American Home Products Corp. 12,213,862
----------------------------------------------------------------------------------
159,700 Becton, Dickinson & Co. 13,075,437
----------------------------------------------------------------------------------
186,500 Bristol-Myers Squibb Co. 15,969,062
----------------------------------------------------------------------------------
140,000 Columbia/HCA Healthcare Corp. 8,085,000
----------------------------------------------------------------------------------
100,000 Ivax Corp. 2,587,500
----------------------------------------------------------------------------------
149,000 Merck & Co., Inc. 9,275,250
----------------------------------------------------------------------------------
300,000 (a)Scherer (R.P.) Corp. 13,162,500
---------------------------------------------------------------------------------- --------------
Total 88,794,111
---------------------------------------------------------------------------------- --------------
PRODUCER MANUFACTURING--5.9%
----------------------------------------------------------------------------------
121,300 General Electric Co. 9,446,238
----------------------------------------------------------------------------------
120,200 Loews Corp. 9,090,125
----------------------------------------------------------------------------------
280,000 Philips Electronics N.V., ADR 10,185,000
----------------------------------------------------------------------------------
180,000 Textron, Inc. 14,400,000
----------------------------------------------------------------------------------
</TABLE>
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ---------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
----------------------------------------------------------------------------------
280,000 Westinghouse Electric Corp. $ 5,390,000
---------------------------------------------------------------------------------- --------------
Total 48,511,363
---------------------------------------------------------------------------------- --------------
RETAIL TRADE--2.0%
----------------------------------------------------------------------------------
250,000 Sears, Roebuck & Co. 12,187,500
----------------------------------------------------------------------------------
140,700 (a)Toys R Us, Inc. 3,798,900
---------------------------------------------------------------------------------- --------------
Total 15,986,400
---------------------------------------------------------------------------------- --------------
SERVICES--2.4%
----------------------------------------------------------------------------------
100,000 Disney (Walt) Co. 6,387,500
----------------------------------------------------------------------------------
150,000 Gannett Co., Inc. 10,087,500
----------------------------------------------------------------------------------
67,300 Interpublic Group Cos., Inc. 3,179,925
---------------------------------------------------------------------------------- --------------
Total 19,654,925
---------------------------------------------------------------------------------- --------------
TECHNOLOGY--19.6%
----------------------------------------------------------------------------------
150,000 (a)BMC Software, Inc. 8,212,500
----------------------------------------------------------------------------------
500,000 (a)Ceridian Corp. 21,500,000
----------------------------------------------------------------------------------
425,000 (a)Data General Corp. 6,215,625
----------------------------------------------------------------------------------
200,000 (a)Digital Equipment Corp. 11,025,000
----------------------------------------------------------------------------------
100,000 General Dynamics Corp. 5,850,000
----------------------------------------------------------------------------------
275,000 General Motors Corp., Class E 15,675,000
----------------------------------------------------------------------------------
109,800 Hewlett-Packard Co. 10,321,200
----------------------------------------------------------------------------------
172,200 Intel Corp. 9,793,875
----------------------------------------------------------------------------------
110,300 International Business Machines Corp. 12,257,088
----------------------------------------------------------------------------------
82,478 (a)Litton Industries, Inc. 3,793,988
----------------------------------------------------------------------------------
205,500 Lockheed Martin Corp. 15,592,313
----------------------------------------------------------------------------------
143,500 (a)Microsoft Corp. 14,798,438
----------------------------------------------------------------------------------
121,000 Raytheon Co. 6,201,250
----------------------------------------------------------------------------------
185,500 Rockwell International Corp. 10,921,313
----------------------------------------------------------------------------------
</TABLE>
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------- ---------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
----------------------------------------------------------------------------------
182,100 (a)Solectron Corp. $ 8,012,400
---------------------------------------------------------------------------------- --------------
Total 160,169,990
---------------------------------------------------------------------------------- --------------
TRANSPORTATION--2.8%
----------------------------------------------------------------------------------
254,100 Consolidated Rail Corp. 18,199,912
----------------------------------------------------------------------------------
100,000 Kansas City Southern Industries, Inc. 4,650,000
---------------------------------------------------------------------------------- --------------
Total 22,849,912
---------------------------------------------------------------------------------- --------------
UTILITIES--5.3%
----------------------------------------------------------------------------------
196,900 AT&T Corp. 12,060,125
----------------------------------------------------------------------------------
200,000 Columbia Gas System, Inc. 9,175,000
----------------------------------------------------------------------------------
425,000 Enron Corp. 15,671,875
----------------------------------------------------------------------------------
213,200 MCI Communications Corp. 6,449,300
---------------------------------------------------------------------------------- --------------
Total 43,356,300
---------------------------------------------------------------------------------- --------------
TOTAL COMMON STOCKS (IDENTIFIED COST $538,011,434) 712,990,979
---------------------------------------------------------------------------------- --------------
PREFERRED STOCKS--1.3%
- -------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--0.4%
----------------------------------------------------------------------------------
516,700 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 3,164,788
---------------------------------------------------------------------------------- --------------
FINANCE--0.9%
----------------------------------------------------------------------------------
133,200 Merrill Lynch & Co., Inc., STRYPES, Series MGIC, $3.12 7,092,900
---------------------------------------------------------------------------------- --------------
TOTAL PREFERRED STOCKS (IDENTIFIED COST $9,844,100) 10,257,688
---------------------------------------------------------------------------------- --------------
PRINCIPAL
AMOUNT VALUE
- ------------- ---------------------------------------------------------------------------------- --------------
(B) REPURCHASE AGREEMENT--10.7%
- -------------------------------------------------------------------------------------------------
$ 87,500,000 BT Securities Corporation, 5.43%, dated 3/29/1996, due 4/1/1996
(at amortized cost) 87,500,000
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $635,355,534)(C) $ 810,748,667
---------------------------------------------------------------------------------- --------------
</TABLE>
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
Note: The categories of investments are shown as a percentage of net assets
($816,653,760) at March 31, 1996.
The following acronyms are used throughout this portfolio:
ADR--American Depository Receipt
STRYPES--Structured Yield Product Exchangeable for Stock
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $635,355,534.
The net unrealized appreciation of investments on a federal tax basis
amounts to $175,393,133 which is comprised of $175,697,975 appreciation and
$304,842 depreciation at March 31, 1996.
(See Notes which are an integral part of the Financial Statements.)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
March 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------
Investments in repurchase agreement $87,500,000
- --------------------------------------------------------------------------------------
Investments in securities 723,248,667
- -------------------------------------------------------------------------------------- -----------
Total investments in securities, at value (identified and tax cost $635,355,534) $810,748,667
- ---------------------------------------------------------------------------------------------------
Cash 132,590
- ---------------------------------------------------------------------------------------------------
Income receivable 1,385,585
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 8,272,660
- --------------------------------------------------------------------------------------------------- -----------
Total assets 820,539,502
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------
Payable for investments purchased $ 2,614,812
- --------------------------------------------------------------------------------------
Payable for shares redeemed 701,830
- --------------------------------------------------------------------------------------
Income distribution payable 152
- --------------------------------------------------------------------------------------
Accrued expenses 568,948
- -------------------------------------------------------------------------------------- -----------
Total liabilities 3,885,742
- --------------------------------------------------------------------------------------------------- -----------
NET ASSETS for 41,275,343 shares outstanding $816,653,760
- --------------------------------------------------------------------------------------------------- -----------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $625,635,086
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 175,393,133
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 14,818,186
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 807,355
- --------------------------------------------------------------------------------------------------- -----------
Total Net Assets $816,653,760
- --------------------------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------------------------
CLASS A SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($455,866,640 / 23,046,979 shares outstanding) $19.78
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/94.50 of $19.78)* $20.93
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share** $19.78
- --------------------------------------------------------------------------------------------------- -----------
CLASS F SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($55,329,135 / 2,797,212 shares outstanding) $19.78
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/99.00 of $19.78)*** $19.98
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (99.00/100 of $19.78)** $19.58
- --------------------------------------------------------------------------------------------------- -----------
CLASS C SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($44,433,642 / 2,244,614 shares outstanding) $19.80
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share* $19.80
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (99.00/100 of $19.80)** $19.60
- --------------------------------------------------------------------------------------------------- -----------
CLASS B SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($261,024,343 / 13,186,538 shares outstanding) $19.79
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share* $19.79
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (94.50/100 of $19.79)** $18.70
- --------------------------------------------------------------------------------------------------- -----------
</TABLE>
*See "How to Purchase Shares" in the Prospectus.
**See "Contingent Deferred Sales Charge" in the Prospectus.
***See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Statement of Operations
- --------------------------------------------------------------------------------
Year Ended March 31, 1996
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $10,436,184
- ---------------------------------------------------------------------------------------------------
Interest 2,042,570
- --------------------------------------------------------------------------------------------------- -----------
Total income 12,478,754
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------
Investment advisory fee $3,637,755
- ----------------------------------------------------------------------------------------
Administrative personnel and services fee 423,163
- ----------------------------------------------------------------------------------------
Custodian fees 64,795
- ----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 727,174
- ----------------------------------------------------------------------------------------
Directors'/Trustees' fees 10,077
- ----------------------------------------------------------------------------------------
Auditing fees 18,407
- ----------------------------------------------------------------------------------------
Legal fees 4,377
- ----------------------------------------------------------------------------------------
Portfolio accounting fees 134,801
- ----------------------------------------------------------------------------------------
Distribution services fee--Class C Shares 226,754
- ----------------------------------------------------------------------------------------
Distribution services fee--Class B Shares 971,408
- ----------------------------------------------------------------------------------------
Shareholder services fee--Class A Shares 898,781
- ----------------------------------------------------------------------------------------
Shareholder services fee--Class F Shares 100,110
- ----------------------------------------------------------------------------------------
Shareholder services fee--Class C Shares 75,585
- ----------------------------------------------------------------------------------------
Shareholder services fee--Class B Shares 323,803
- ----------------------------------------------------------------------------------------
Share registration costs 234,996
- ----------------------------------------------------------------------------------------
Printing and postage 133,137
- ----------------------------------------------------------------------------------------
Insurance premiums 10,759
- ----------------------------------------------------------------------------------------
Taxes 55,198
- ----------------------------------------------------------------------------------------
Miscellaneous 8,759
- ---------------------------------------------------------------------------------------- ---------
Total expenses 8,059,839
- ----------------------------------------------------------------------------------------
Waivers--
- -----------------------------------------------------------------------------
Waiver of shareholder services fee--Class A Shares $(243,794)
- -----------------------------------------------------------------------------
Waiver of shareholder services fee--Class F Shares (8,009)
- -----------------------------------------------------------------------------
Waiver of shareholder services fee--Class C Shares (4,805)
- -----------------------------------------------------------------------------
Waiver of shareholder services fee--Class B Shares (70,191)
- ----------------------------------------------------------------------------- ---------
Total waivers (326,799)
- ----------------------------------------------------------------------------- ---------
Net expenses 7,733,040
- --------------------------------------------------------------------------------------------------- -----------
Net investment income 4,745,714
- --------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments 29,467,435
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 112,788,561
- --------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments 142,255,996
- --------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $147,001,710
- --------------------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------------------------
Net investment income $ 4,745,714 $ 4,809,826
- ------------------------------------------------------------------------------------
Net realized gain (loss) on investments ($29,467,435 and $9,972,646 net gains,
respectively, as computed for federal tax purposes) 29,467,435 9,972,646
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 112,788,561 20,096,284
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from operations 147,001,710 34,878,756
- ------------------------------------------------------------------------------------ ------------- -------------
Net equalization credits (debits)-- 797,978 200,306
- ------------------------------------------------------------------------------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------------------------------
Distributions from net investment income
Class A Shares (3,449,876) (3,982,898)
- ------------------------------------------------------------------------------------
Class F Shares (370,222) (364,849)
- ------------------------------------------------------------------------------------
Class C Shares (50,556) (139,250)
- ------------------------------------------------------------------------------------
Class B Shares (300,834) (190,153)
- ------------------------------------------------------------------------------------
Distributions from net realized gains
- ------------------------------------------------------------------------------------
Class A Shares (12,685,641) (5,729,133)
- ------------------------------------------------------------------------------------
Class F Shares (1,393,014) (557,910)
- ------------------------------------------------------------------------------------
Class C Shares (1,056,763) (380,985)
- ------------------------------------------------------------------------------------
Class B Shares (4,534,699) (393,441)
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from distributions to shareholders (23,841,605) (11,738,619)
- ------------------------------------------------------------------------------------ ------------- -------------
SHARE TRANSACTIONS (EXCLUSIVE OF AMOUNTS ALLOCATED TO NET INVESTMENT INCOME)--
- ------------------------------------------------------------------------------------
Proceeds from sale of shares 396,144,022 130,916,674
- ------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of distributions declared 19,738,904 9,247,755
- ------------------------------------------------------------------------------------
Cost of shares redeemed (86,878,884) (53,847,424)
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from share transactions 329,004,042 86,317,005
- ------------------------------------------------------------------------------------ ------------- -------------
Change in net assets 452,962,125 109,657,448
- ------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------
Beginning of period 363,691,635 254,034,187
- ------------------------------------------------------------------------------------ ------------- -------------
End of period (including undistributed net investment
income of $807,355 and $1,646,312, respectively) $ 816,653,760 $ 363,691,635
- ------------------------------------------------------------------------------------ ------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Financial Highlights--Class A Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 15.66 $ 14.58 $ 14.90 $ 13.88 $ 13.18 $ 12.21 $ 13.04 $ 12.55 $ 14.21
- -------------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------------------
Net investment income 0.22 0.25 0.23 0.29 0.29 0.37 0.55 0.50 0.45
- -------------------------------
Net realized and unrealized
gain (loss) on investments 4.70 1.42 0.18 2.05 1.34 1.28 0.36 1.08 (1.21)
- ------------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 4.92 1.67 0.41 2.34 1.63 1.65 0.91 1.58 (0.76)
- -------------------------------
LESS DISTRIBUTIONS
- -------------------------------
Distributions from net
investment income (0.17) (0.24) (0.24) (0.28) (0.28) (0.38) (0.56) (0.50) (0.43)
- -------------------------------
Distributions from net
realized gain on investments (0.63) (0.35) (0.49) (1.04) (0.65) (0.30) (1.18) (0.59) (0.47)
- ------------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Total distributions (0.80) (0.59) (0.73) (1.32) (0.93) (0.68) (1.74) (1.09) (0.90)
- ------------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 19.78 $ 15.66 $ 14.58 $ 14.90 $ 13.88 $ 13.18 $ 12.21 $ 13.04 $ 12.55
- ------------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (A) 32.00% 11.87% 2.76% 18.31% 12.91% 14.17% 7.13% 13.23% (5.32%)
- -------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------
Expenses 1.16% 1.23% 1.18% 1.13% 1.02% 1.02% 1.01% 1.01% 1.00%
- -------------------------------
Net investment income 1.07% 1.71% 1.48% 2.07% 2.12% 3.06% 4.23% 3.85% 3.35%
- -------------------------------
Expense waiver/ reimbursement
(b) 0.07% -- -- 0.06% 0.16% 0.30% 0.35% 0.12% 0.11%
- -------------------------------
SUPPLEMENTAL DATA
- -------------------------------
Net assets, end of period
(000 omitted) $455,867 $268,470 $226,857 $202,866 $171,210 $149,360 $147,235 $149,049 $158,818
- -------------------------------
Portfolio turnover 46% 34% 27% 39% 67% 57% 50% 27% 65%
- -------------------------------
<CAPTION>
<S> <C>
1987
NET ASSET VALUE, BEGINNING OF
PERIOD $ 13.64
- -------------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------------------
Net investment income 0.46
- -------------------------------
Net realized and unrealized
gain (loss) on investments 1.81
- ------------------------------- ---------
Total from investment
operations 2.27
- -------------------------------
LESS DISTRIBUTIONS
- -------------------------------
Distributions from net
investment income (0.47)
- -------------------------------
Distributions from net
realized gain on investments (1.23)
- ------------------------------- ---------
Total distributions (1.70)
- ------------------------------- ---------
NET ASSET VALUE, END OF PERIOD $ 14.21
- ------------------------------- ---------
TOTAL RETURN (A) 18.38%
- -------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------
Expenses 1.00%
- -------------------------------
Net investment income 3.44%
- -------------------------------
Expense waiver/ reimbursement
(b) 0.12%
- -------------------------------
SUPPLEMENTAL DATA
- -------------------------------
Net assets, end of period
(000 omitted) $157,999
- -------------------------------
Portfolio turnover 28%
- -------------------------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Financial Highlights--Class B Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31,
1996 1995(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.67 $ 14.97
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------
Net investment income 0.10 0.13
- -----------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 4.70 0.92
- ----------------------------------------------------------------------------------------------- --------- -----------
Total from investment operations 4.80 1.05
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------
Distributions from net investment income (0.05) (0.12)
- -----------------------------------------------------------------------------------------------
Distributions from net realized gain on investment transactions (0.63) (0.23)
- ----------------------------------------------------------------------------------------------- --------- -----------
Total distributions (0.68) (0.35)
- ----------------------------------------------------------------------------------------------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 19.79 $ 15.67
- ----------------------------------------------------------------------------------------------- --------- -----------
TOTAL RETURN (B) 31.10% 7.28%
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------------------------------------------
Expenses 1.93% 1.95%*
- -----------------------------------------------------------------------------------------------
Net investment income 0.32% 1.09%*
- -----------------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.05% 0.12%*
- -----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $261,024 $46,671
- -----------------------------------------------------------------------------------------------
Portfolio turnover 46% 34 %
- -----------------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 25, 1994 (date of initial
public investment) to March 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Financial Highlights--Class C Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995 1994(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.66 $ 14.55 $ 14.70
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income 0.05 0.14 0.12
- -------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 4.75 1.45 0.35
- ------------------------------------------------------------------------------------- --------- --------- -----------
Total from investment operations 4.80 1.59 0.47
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------------
Distributions from net investment income (0.03) (0.13) (0.13)
- -------------------------------------------------------------------------------------
Distributions from net realized gain on investments (0.63) (0.35) (0.49)
- ------------------------------------------------------------------------------------- --------- --------- -----------
Total distributions (0.66) (0.48) (0.62)
- ------------------------------------------------------------------------------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 19.80 $ 15.66 $ 14.55
- ------------------------------------------------------------------------------------- --------- --------- -----------
TOTAL RETURN (B) 31.14% 11.23% 3.16%
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------
Expenses 1.96% 2.04% 2.11%*
- -------------------------------------------------------------------------------------
Net investment income 0.27% 0.91% 0.71%*
- -------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.02% -- --
- -------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $44,434 $20,055 $11,895
- -------------------------------------------------------------------------------------
Portfolio turnover 46% 34% 27 %
- -------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 21, 1993 (date of initial
public investment) to
March 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Financial Highlights--Class F Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995 1994(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.66 $ 14.58 $ 14.95
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------
Net investment income 0.19 0.25 0.16
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 4.72 1.42 (0.20)
- -------------------------------------------------------------------------------- --------- --------- -----------
Total from investment operations 4.91 1.67 (0.04)
- --------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------
Distributions from net investment income (0.16) (0.24) (0.16)
- --------------------------------------------------------------------------------
Distributions from net realized gain on investments (0.63) (0.35) (0.17)
- -------------------------------------------------------------------------------- --------- --------- -----------
Total distributions (0.79) (0.59) (0.33)
- -------------------------------------------------------------------------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 19.78 $ 15.66 $ 14.58
- -------------------------------------------------------------------------------- --------- --------- -----------
TOTAL RETURN (B) 31.95% 11.80% (0.30)%
- --------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Expenses 1.21% 1.27% 1.35%*
- --------------------------------------------------------------------------------
Net investment income 1.02% 1.69% 1.51%*
- --------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.02% -- --
- --------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $55,329 $28,495 $15,282
- --------------------------------------------------------------------------------
Portfolio turnover 46% 34% 27 %
- --------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 27, 1993 (date of initial
public investment) to
March 31, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
Notes to Financial Statements
- --------------------------------------------------------------------------------
March 31, 1996
1. ORGANIZATION
Federated American Leaders Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, (the "Act"), as a diversified, open-end
management investment company. The Fund offers four classes of shares: Class A
Shares, Class F Shares, Class C Shares, and Class B Shares. The investment
objective of the Fund is to seek growth of capital and of income by
concentrating the area of investment decision in the securities of high quality
companies.
Shareholders approved a change in the name of the Fund as follows:
<TABLE>
<S> <C>
EFFECTIVE DATE NEW NAME
March 31, 1996 Federated American Leaders Fund, Inc.
</TABLE>
Shareholders approved a change in the name of the Fortress Shares as follows:
<TABLE>
<CAPTION>
EFFECTIVE DATE NEW NAME
<S> <C>
March 31, 1996 Class F Shares
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the
"Directors"). Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Fund could receive less than the repurchase price on the sale of
collateral securities.
29
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
accumulated equalization and have been reclassified as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
<S> <C> <C>
ACCUMULATED NET
PAID-IN CAPITAL INVESTMENT INCOME
2,211,161 (2,211,161)
</TABLE>
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
EQUALIZATION--The Fund follows the accounting practice known as
equalization, in which a portion of the proceeds from sales and costs of
redemptions of Fund shares equivalent, on a per share basis, equal to the
amount of undistributed net investment income on the date of the
transaction, is credited or charged to undistributed net investment income.
As a result, undistributed net investment income per share is unaffected by
sales or redemptions of Fund shares.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
30
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
3. CAPITAL STOCK
At March 31, 1996, par value shares ($0.20 per share) authorized were as
follows:
<TABLE>
<CAPTION>
NUMBER OF PAR VALUE
CLASS NAME CAPITAL STOCK AUTHORIZED
<S> <C>
Class A Shares 30,000,000
Class F Shares 25,000,000
Class C Shares 25,000,000
Class B Shares 20,000,000
</TABLE>
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
CLASS A SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 8,582,300 $ 153,778,904 3,930,179 $ 58,226,085
- ------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 745,456 13,448,166 534,011 7,763,914
- ------------------------------------------------------
Shares redeemed (3,425,166) (61,354,945) (2,880,782) (42,703,397)
- ------------------------------------------------------ ----------- -------------- ----------- --------------
Net change resulting from
Class A Shares transactions 5,902,590 $ 105,872,125 1,583,408 $ 23,286,602
- ------------------------------------------------------ ----------- -------------- ----------- --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
CLASS F SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 1,201,769 $ 21,794,346 1,145,830 $ 17,066,187
- ---------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 71,470 1,295,623 45,561 661,854
- ---------------------------------------------------------
Shares redeemed (295,842) (5,217,753) (419,627) (6,224,206)
- --------------------------------------------------------- ---------- ------------- ---------- -------------
Net change resulting from
Class F Shares transactions 977,397 $ 17,872,216 771,764 $ 11,503,835
- --------------------------------------------------------- ---------- ------------- ---------- -------------
</TABLE>
31
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
CLASS C SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 1,191,221 $ 21,813,090 689,500 $ 10,271,475
- -----------------------------------------------------------
Shares issued to shareholders in
payment of distributions declared 36,162 655,726 20,770 300,523
- -----------------------------------------------------------
Shares redeemed (263,447) (4,771,458) (246,875) (3,662,616)
- ----------------------------------------------------------- ---------- ------------- --------- -------------
Net change resulting from
Class C Shares transactions 963,936 $ 17,697,358 463,395 $ 6,909,382
- ----------------------------------------------------------- ---------- ------------- --------- -------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED MARCH 31,
1996 1995(A)
---------------------------- -------------------------
CLASS B SHARES SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 10,810,661 $ 198,757,682 3,026,730 $ 45,352,927
- -------------------------------------------------------
Shares issued to shareholders in
payment of dividends declared 236,916 4,339,389 36,359 521,464
- -------------------------------------------------------
Shares redeemed (839,484) (15,534,728) (84,644) (1,257,205)
- ------------------------------------------------------- ------------ -------------- ---------- -------------
Net change resulting from
Class B Shares transactions 10,208,093 $ 187,562,343 2,978,445 $ 44,617,186
- ------------------------------------------------------- ------------ -------------- ---------- -------------
Net change resulting from
Fund share transactions 18,052,016 $ 329,004,042 5,797,012 $ 86,317,005
- ------------------------------------------------------- ------------ -------------- ---------- -------------
</TABLE>
(a) Reflects operations from the period from July 25, 1994 (date of intial
public investment) to March 31, 1995.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory
fee equal to (a) a maximum of 0.55% of the average daily net assets of the
Fund, and (b) 4.50% of the gross income of the Fund, excluding capital
gains or losses.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
32
Federated American Leaders Fund, Inc.
(formerly, American Leaders Fund, Inc.)
- --------------------------------------------------------------------------------
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
the Fund will compensate Federated Securities Corp., the principal
distributor, from the net assets of the Fund to finance activities intended
to result in the sale of the Fund's Class B and Class C shares. The Plan
provides that the Fund may incur distribution expenses according to the
following schedule annually, to compensate Federated Securities Corp.
<TABLE>
<CAPTION>
% OF AVERAGE DAILY
SHARE CLASS NAME NET ASSETS OF CLASS
<S> <C>
Class B 0.75%
Class C 0.75%
</TABLE>
The distributor may voluntarily choose to waive any portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at
its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay
FSS up to 0.25% of average daily net assets of each class of shares of the
Fund for the period. The fee paid to FSS is used to finance certain
services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of its fee. FSS can modify or
terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on
the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Fund are Officers and
Directors or Trustees of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended
March 31, 1996, were as follows:
<TABLE>
<S> <C>
PURCHASES $ 480,710,369
- -------------------------------------------------------------------------------------------------- --------------
SALES $ 239,362,567
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
33
Report of Independent Public Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
FEDERATED AMERICAN LEADERS FUND, INC.
(formerly, American Leaders Fund, Inc.)
We have audited the accompanying statement of assets and liabilities of
Federated American Leaders Fund, Inc. (a Maryland corporation), including the
schedule of portfolio investments, as of March 31, 1996, and the related
statement of operations for the year then ended and the statement of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Federated American Leaders Fund, Inc. as of March 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
May 15, 1996
34
Directors Officers
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley President
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland Executive Vice President
J. Christopher Donahue Richard B. Fisher
James E. Dowd Vice President
Lawrence D. Ellis, M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other government agency. Investment in mutual funds
involves investment risk, including 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.
35
[LOGO OF FEDERATED INVESTORS]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and a subsidiary of Federated Investors.
027128107
027128206
027128305
027128404
8042504 (5/96)
A1. The graphic presentation here displayed consists of a boxed legend in
the upper left quadrant indicating the components of the corresponding
mountain chart. The color coded mountain chart is a visual representation of
the narrative text above it. The "x" axis reflects computation periods from
2/25/69 to 3/31/96. The "y" axis is measured in increments of $50,000
ranging from $0 to $450,000 and indicates that the ending value of
hypothetical initial investment of $28,000 in the fund's Class A Shares,
assuming the reinvestment of capital gains and dividends,would have grown to
$400,494 on 3/31/96.
A2. The graphic presentation here displayed consists of a boxed legend in
the upper left quadrant indicating the components of the corresponding
mountain chart. The color coded mountain chart is a visual representation
of the narrative text above it. The "x" axis reflects computation periods
from 2/25/69 to 3/31/96. The "y" axis is measured in increments of $25,000
ranging from $0 to $225,000 and indicates that the ending value of
hypothetical yearly investments of $1,000 in the fund's Class A Shares,
assuming the reinvestment of capital gains and dividends,would have grown to
$206,681 on 3/31/96.
A3. The graphic presentation here displayed consists of a boxed legend in
the upper left quadrant indicating the components of the corresponding
mountain chart. The color-coded mountain chart is a visual representation
of the narrative text beneath it. The "x" axis reflects computation periods
from 3/31/81 to 3/31/96. The "y" axis is measured in increments of $50,000
ranging from $0 to $200,000 and indicates that the ending value of a
hypothetical initial investment of $5,000 and subsequent monthly investments
of $250 over 15 years in the fund's Class A Shares would have grown to
$180,330 on 3/31/96.
A4. The Graphic presentation here displayed consists of a five column chart
outlining the eighteen ten-year periods of investment growth. The columns
are as follows: April 1-March 31; Initial Number of Shares; Dividends and
Capital Gains Reinvested; Total Shares; Ending Value. The information is as
follows: 1969-1979, 919, $5,501, 1,552, $12,386; 1970-1980, 962, $5,918,
1,729, $13,347; 1971-1981, 919, $7,312, 1,699, $15,935; 1972-1982; 920,
$7,334, 1,784, $15,146; 1973-1983; 957, $10,781, 1,941, $21,275; 1974-1984;
1,151, $14,597, 2,473, $27,305; 1975-1985; 1,272, $21,238, 3,104, $35,978;
1976-1986; 1,047, $23,339, 2,758, $37,613; 1977-1987; 1,081, $28,331, 3,075,
$43,696; 1978-1988; 1,287, $26,800, 3,423, $42,958; 1979-1989; 1,184,
$27,487, 3,292, $42,929; 1980-1990; 1,224, $28,863, 3,588, $43,809; 1981-
1991; 1,007, $24,931, 2,899, $38,209; 1982-1992; 1,113, $28,557, 3,170,
$44,006; 1983-1993; 862, $24,159, 2,484, $37,005; 1984-1994; 856, $20,729,
2,278, $33,209; 1985-1995; 815, $16,837, 1,891, $29,606 and 1986-1996, 693,
15,946, 1,499 and 29,658.
A5. The graphic presentation here displayed consists of a two-column chart
entitled "Some of the Fund's Major Shareholder Groups." The information is
as follows: Individuals and Joint Tenants, $204,942,720; IRAs, $125,685,115;
Trusts, $54,589,866; Custodians (under Uniform Gift to Minors Act),
$15,993,613 and Corporations, $6,701,525.
A6. The graphic presentation here displayed consists of a two-column chart
outlining the Fund's "Top Ten Holdings" with regard to "% of Net Assets as
of 3/31/96." The information is as follows: Ceridian Corp., 2.6%; Travelers
Group, Inc., 2.4%; Mobil Corp., 2.3%; Consolidated Rail Corp., 2.2%; Phillip
Morris Cos., Inc., 2.1%; Federal Home Loan Mortgage Corp., 2.1%; Nike, Inc.,
2.0%; Bristol-Myers Squibb Co., 2.0%; General Motors Corp., Class E, 1.9%
and Enron Corp., 1.9%.
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class
A Shares of Federated American Leaders Fund, Inc., based on a 4.50% sales
load are represented by a solid line. The Standard & Poor's 500 Index (the
"S&P 500") is represented by a broken line and the Lipper Growth and Income
Funds Average (the "LGIFA") is represented by a dotted line.The line graph
is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class A Shares of the fund, the S&P 500 and
the LGIFA. The "x" axis reflects computation periods from 3/31/86 to
3/31/96. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund's Class
A Shares, based on a 4.50% sales load, as compared to the S&P 500 and the
LGIFA. The ending values were $28,319, $36,847, and $29,939, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Class A Shares Average Annual Total Returns for the one-year, five-
year and 10-year periods ended 3/31/96 and from the fund's start of
performance (2/25/69) to 3/31/96. The total returns were 24.75%, 13.81%,
11.48% and 10.32%, respectively.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class
B Shares of Federated American Leaders Fund, Inc. are represented by a solid
line. The S&P 500 is represented by a broken line and the LGIFA is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Class B Shares of the fund, the S&P 500 and the LGIFA. The "x" axis reflects
computation periods from 7/25/94 to 3/31/96. The "y" axis reflects the cost
of the investment. The right margin reflects the ending value of the
hypothetical investment in the fund's Class B Shares as compared to the S&P
500 and the LGIFA. The ending values were $13,560, $14,867, and $13,771,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the fund's Class B Shares Average Annual Total Return for the one-
year period ended 3/31/96 and from the start of performance of Class B
Shares (7/25/94) to 3/31/96. The total returns were 25.40% and 19.85%,
respectively.
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class
C Shares of Federated American Leaders Fund, Inc. are represented by a solid
line. The S&P 500 is represented by a broken line and the LGIFA is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Class C Shares of the fund, the S&P 500 and the LGIFA. The "x" axis reflects
computation periods from 4/21/93 to 3/31/96. The "y" axis reflects the cost
of the investment. The right margin reflects the ending value of the
hypothetical investment in the fund's Class C Shares as compared to the S&P
500 and the LGIFA. The ending values were $14,423, $15,498, and $14,958,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the fund's Class C Shares Average Annual Total Returns for the
one-year period ended 3/31/96 and from the start of performance of Class C
Shares (4/21/93) to 3/31/96. The total returns were 30.08% and 15.06%,
respectively.
A10. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class
F Shares of Federated American Leaders Fund, Inc. are represented by a solid
line. The S&P 500 is represented by a broken line and the LGIFA is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Class F Shares of the fund, the S&P 500 and the LGIFA. The "x" axis reflects
computation periods from 7/27/93 to 3/31/96. The "y" axis reflects the cost
of the investment. The right margin reflects the ending value of the
hypothetical investment in the fund's Class F Shares as compared to the S&P
500 and the LGIFA.The ending values were $14,423, $15,498, and $14,423,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the fund's Class F Shares Average Annual Total Returns for the
one-year period ended 3/31/96 and from the start of performance of Class F
Shares (7/27/93) to 3/31/96. The total returns were 29.56% and 14.75%,
