1933 Act File No. 2-49591
1940 Act File No. 811-2430
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ........................
Post-Effective Amendment No. __79___ .......................X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 37 __ ........................................X
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MONEY MARKET MANAGEMENT, INC.
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X_ on FEBRUARY 28, 1999 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i) on _________________
pursuant to paragraph (a) (i) 75 days after filing pursuant to paragraph
(a)(ii) on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Copies to:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
<PAGE>
PROSPECTUS
Money Market Management, Inc.
A money market mutual fund seeking to achieve current income consistent with
stability of principal by investing primarily in short-term money market
securities.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
February 28, 1999
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 2
What are the Fund's Investment Strategies? 3
What are the Principal Securities
in Which the Fund Invests? 3
What are the Specific Risks of Investing in the Fund? 4
What do Shares Cost? 5
How is the Fund Sold? 6
How to Purchase Shares 6
How to Redeem and Exchange Shares 8
Account and Share Information 10
Who Manages the Fund? 10
Financial Information 11
Independent Auditors' Report 22
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund which seeks to maintain a stable net asset value
of $1.00. The Fund's investment objective is current income consistent with
stability of principal. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the strategies and
policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests in a portfolio of high quality fixed income securities maturing
in one year or less. The average maturity of the Fund's portfolio will be 90
days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
Although the Fund seeks to maintain a stable net asset value, it is possible to
lose money investing in the Fund.
The Shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or 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.
RISK/RETURN BAR CHART AND TABLE
"Graphic representation "A" omitted. See Appendix."
The bar chart shows the variability of the Fund's actual total returns on a
calendar year-end basis.
The Fund's Shares are not sold subject to sales charge (load). Hence, the total
returns displayed above are based upon the net asset value.
Within the period shown in the Chart, the Fund's highest quarterly return was
2.25% (quarter ended June 30, 1989). Its lowest quarterly return was 0.53%
(quarter ended June 30, 1993).
The 7-Day Net Yield as of 12/31/98 was 4.25%. 1
AVERAGE ANNUAL TOTAL RETURN
The following table represents the Fund's Average Annual Total Return through
12/31/98.
CALENDAR PERIOD FUND
1 Year 4.64%
5 Years 4.46%
10 Years 4.90%
1 Investors may call the Fund to acquire the current 7-Day Net Yield by calling
1-800-341-7400.
Past performance does not necessarily predict future performance.
What are the Fund's Fees and Expenses?
MONEY MARKET MANAGEMENT, INC.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund.
<TABLE>
SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a
percentage of offering price) None
Maximum Deferred Sales Charge (Load) (as a percentage of
original purchase price or redemption proceeds,
as applicable) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
(and other Distributions)
(as a percentage of offering price) None
Redemption Fee (as a percentage of amount redeemed, if
applicable) None
Exchange Fee None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (Before Waivers) 1
<S> <C>
Expenses That are Deducted From Fund Assets (as a percentage
of average net assets)
Management Fee 2 0.50%
Distribution (12b-1) Fee None
Shareholder Services Fee 3 0.25%
Other Expenses 0.54%
Total Annual Fund Operating Expenses 1.29%
1 Although not contractually obligated to do so, the adviser, distributor, and
shareholder services provider waived certain amounts. These are shown below
along with the net expenses the Fund actually paid for the fiscal year ended
December 31, 1998.
Waiver of Fund Expenses 0.18%
Total Actual Annual Fund Operating Expenses (after waivers) 1.11%
2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by the
Fund (after the voluntary waiver) was 0.45% for the year ended December 31,
1998.
3 The shareholder services fee has been voluntarily reduced. This reduction can
be terminated at any time. The shareholder services fee paid by the Fund (after
the voluntary reduction) was 0.12% for the year ended December 31, 1998.
</TABLE>
This Example is intended to help you compare the cost of investing in the Fund's
Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time
periods indicated and then redeem all of your Shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's Shares operating expenses are BEFORE WAIVERS as shown in the
table and remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
1 Year $ 131
3 Years $ 409
5 Years $ 708
10 Years $ 1,556
What are the Fund's Investment Strategies?
The Fund invests in a portfolio of high quality fixed income securities maturing
in one year or less. The average maturity of the Fund's portfolio will be 90
days or less. In order to select individual investments, the Fund's
investment adviser (Adviser) performs a fundamental credit analysis to develop
an approved list of issuers and securities that meet the Adviser's minimum
credit standards. The Adviser assesses likely movements in interest rates based
upon general economic and market conditions. Considering this assessment, the
Adviser targets an average portfolio maturity range. The Adviser generally
shortens the portfolio's average maturity when it expects interest rates to rise
and extends the maturity when it expects interest rates to fall. In adjusting
the portfolio's average maturity, the Adviser selects among investments with
different maturities comparing their relative returns. What are the
Principal Securities in Which the Fund Invests? FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time.
The following describes the types of fixed income securities in which the Fund
invests.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers. COMMERCIAL PAPER Commercial paper is an issuer's draft
obligation with a maturity of less than nine months. Companies typically issue
commercial paper to pay for current expenditures. Most issuers constantly
reissue their commercial paper and use the proceeds (or bank loans) to repay
maturing paper. If the issuer cannot continue to obtain liquidity in this
fashion, its commercial paper may default. DEMAND INSTRUMENTS Demand
instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year. BANK INSTRUMENTS Bank instruments are
unsecured interest bearing deposits with banks. Bank instruments include bank
accounts, time deposits, certificates of deposit and banker's acceptances.
ASSET BACKED SECURITIES
Asset Backed Securities are payable from pools of debt obligations. Almost any
type of fixed income assets (including other fixed income securities) may be
used to create an asset backed security. However, most asset backed securities
involve consumer or commercial debts with maturities of less than 10 years.
Asset backed securities may take the form of commercial paper or notes, in
addition to simple ownership interests in the underlying debt obligations.
CREDIT ENHANCEMENT
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security after the issuer defaults. In some cases
the company providing credit enhancement makes all payments directly to the
security holders and receives reimbursement from the issuer. Normally, the
credit enhancer has greater financial resources and liquidity than the issuer.
For this reason, the Adviser usually evaluates the credit risk of a fixed income
security based solely upon its credit enhancement. The Adviser purchases fixed
income securities that have been credit enhanced.
Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security. REPURCHASE AGREEMENTS
Repurchase Agreements are transactions in which the Fund buys a security
from a dealer or bank and agrees to sell the security back at a mutually agreed
upon time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
Repurchase agreements are subject to credit risks.
INVESTMENT RATINGS
The Fund will limit its investments in securities rated in the second highest
short-term rating category e.g., A-2 by Standard & Poor's, Prime-2 by Moody's
Investors Service, Inc. (Moody's), or F-2 (+ or -) by Fitch IBCA, Inc., to not
more than 5% of its total assets, with not more than 1% invested in the
securities of any one issuer.
What are the Specific Risks of Investing in the Fund?
Although there are many factors which may affect an investment in the Fund, the
principal risks of investing in a corporate money market fund are described
below.
MARKET RISK
Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices of
fixed income securities fall.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
CREDIT RISK
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest and principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.
Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's. These services assign ratings to securities by
assessing the likelihood of issuer default. Lower credit ratings correspond to
higher risk. If a security has not received a rating, the Fund must rely
entirely upon the Adviser's credit assessment.
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
What do Shares Cost?
You can purchase, redeem or exchange Shares any day the New York Stock Exchange
(NYSE) is open. When the Fund receives your transaction request in proper form,
it is processed at the next calculated net asset value (NAV).
The Fund does not charge a front-end sales charge. NAV is determined at 12:00
noon (Eastern time) and as of the end of regular trading (normally 4:00 p.m.
Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $1,500 or more or
additional investments of as little as $100. The minimum initial and subsequent
investment amounts for retirement plans are only $250 and $100, respectively.
An institutional investor's minimum investment is calculated by combining all
accounts it maintains with the Fund. Accounts established through investment
professionals may be subject to a smaller minimum investment amount. Keep in
mind that investment professionals may charge you fees for their services in
connection with your Share transactions.
SALES CHARGE WHEN YOU REDEEM
Your redemption proceeds may be reduced by a sales charge, commonly referred to
as a contingent deferred sales charge (CDSC).
A CDSC will be imposed only in certain instances in which the Fund Shares being
redeemed were acquired in exchange for Class F Shares of certain Federated
Funds. (See "Exchange Privileges"). If Fund Shares were acquired in exchange for
Class F Shares of certain Federated Funds, a redemption of Fund Shares within
four years of the initial Class F Share purchase will be subject to a CDSC of
1%.
YOU WILL NOT BE CHARGED A CDSC WHEN REDEEMING SHARES:
* purchased with reinvested dividends or capital gains;
* purchased within 120 days of redeeming Shares of an equal or lesser
amount;
* that you exchanged into the same share class of another Federated Fund where
the shares were held for the applicable CDSC holding period (other than a money
market fund);
* purchased through investment professionals that did not receive advanced
sales payments; or
* if, after you purchase Shares, you become disabled as defined by the IRS.
IN ADDITION, YOU WILL NOT BE CHARGED A CDSC:
* if the Fund redeems your Shares and closes your account for not meeting
the minimum balance requirement;
* if your redemption is a required retirement plan distribution; * upon the
death of the last surviving shareholder of the account.
If your redemption qualifies, you or your investment professional should notify
the Distributor at the time of redemption to eliminate the CDSC. If the
Distributor is not notified, the CDSC will apply.
TO KEEP THE SALES CHARGE AS LOW AS POSSIBLE, THE FUND REDEEMS YOUR SHARES IN
THIS ORDER:
* Shares that are not subject to a CDSC;
* Shares held the longest (to determine the number of years your Shares have
been held, include the time you held shares of other Federated Funds that have
been exchanged for Shares of this Fund); and
* then, the CDSC is calculated using the share price at the time of purchase or
redemption, whichever is lower.
How is the Fund Sold?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to investors with temporary cash balances and investors with
cash reserves. The Distributor and its affiliates may pay out of their assets
other amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of Federated
Investors, Inc. (Federated).
How to Purchase Shares
You may purchase Shares through an investment professional, directly from the
Fund, or through an exchange from the Class F Shares of certain Federated Funds.
The Fund reserves the right to reject any request to purchase or exchange
Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check. You will
become the owner of Shares after the Fund receives your wire or your check. If
your check does not clear, your purchase will be canceled and you could be
liable for any losses or fees the Fund or its transfer
agent incurs.
An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day. BY
INVEST-BY-PHONE Once you establish an account, you may use the Fund's
Invest-By-Phone privilege for future Share purchases if you have an account with
a bank that is an Automated Clearinghouse member. To apply, call the Fund for an
authorization form. You may use Invest-By-Phone to purchase Shares approximately
two weeks from the date you file the form with Federated Shareholder Services
Company.
BY DIRECT DEPOSIT
You may complete an application with Federated Shareholder Services Company to
have your Social Security, Railroad Retirement, VA Compensation or Pension,
Civil Service Retirement and certain other retirement payments invested directly
into the Fund. The application must be filed with Federated Shareholder Services
Company before direct deposit may begin. Allow 60 to 90 days for the application
to be processed.
THROUGH AN EXCHANGE
You may purchase Shares through an exchange from the Class F Shares of certain
Federated Funds. You must meet the minimum initial investment requirement for
purchasing Shares and both accounts must have identical registrations.
BY SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
Shares on a regular basis by completing the Systematic Investment Program (SIP)
section of the New Account Form or by contacting the Fund or your investment
professional. The minimum investment amount for SIPs is $50.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.
How to Redeem and Exchange Shares
You should redeem or exchange Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption or exchange request to your investment professional
by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern
time). Investment professionals are responsible for promptly submitting
redemption requests and providing proper written redemption instructions
as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem or exchange Shares by calling the Fund once you have completed
the appropriate authorization form for telephone transactions.
If you call before 3:00 p.m. (Eastern time) your redemption will be wired to you
the same day. You will not receive that day's dividend.
If you call after 3:00 p.m. (Eastern time) your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem or exchange Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed. Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests BY PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund Name and Share Class, account number and account registration;
* amount to be redeemed or exchanged;
* signatures of all Shareholders exactly as registered; and
* IF EXCHANGING, the Fund Name and Share Class, account number and account
registration into which you are exchanging.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of record;
* your redemption will be sent to an address of record that was changed
within the last 30 days; * a redemption is payable to someone other than
the shareholder(s) of record; or
* IF EXCHANGING (TRANSFERRING) into another fund with a different shareholder
registration.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union, or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
EXCHANGE PRIVILEGES
You may exchange Shares of the Fund into Class F Shares of certain Federated
Funds. To do this, you must:
* ensure that the account registrations are identical;
* meet any minimum initial investment requirements; and
* receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The Fund's
management or investment adviser may determine from the amount, frequency and
pattern of exchanges that a shareholder is engaged in excessive trading that is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other Federated Funds.
SYSTEMATIC WITHDRAWAL/EXCHANGE PROGRAM
You may automatically redeem or exchange Shares in a minimum amount of $100 on a
regular basis. Complete the appropriate section of the New Account Form or an
Account Service Options Form or contact your investment professional or the
Fund. Your account value must meet the minimum initial investment amount at the
time the program is established. This program may reduce, and eventually
deplete, your account. Payments should not be considered yield or income.
CHECKWRITING
You may request a checking account to redeem your Fund Shares. Your account
will continue to receive the daily dividend declared on the Shares to be
redeemed until the check is presented for payment.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming or exchanging
Shares represented by certificates previously issued by the Fund, you must
return the certificates with your written redemption or exchange request. For
your protection, send your certificates by registered or certified mail, but do
not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase shares by wire, you begin earning dividends on the day your wire is
received. If you purchase shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received. The Fund does
not expect to realize any capital gains or losses. If capital gains or losses
were to occur, they could result in an increase or decrease in dividends. The
Fund pays any capital gains at least annually. Your dividends and capital gains
distributions will be automatically reinvested in additional Shares without a
sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, accounts may be
closed if redemptions or exchanges cause the account balance to fall below the
minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets. Fund distributions are expected to be primarily dividends.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.
Who Manages the Fund?
The Board of Directors governs the Fund. The Board selects and oversees the
Adviser, Federated Advisers. The Adviser manages the Fund's assets, including
buying and selling portfolio securities. The Adviser's address is Federated
Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222- 3779. The
Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which total approximately $111 billion in assets as
of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers. ADVISORY FEES The Adviser receives an
annual investment advisory fee based on the Fund's average net assets as shown
in the chart below. The Adviser may voluntarily waive a portion of its fee or
reimburse the Fund for certain operating expenses.
ADVISORY FEES
AS PERCENTAGE OF
AVERAGE DAILY AVERAGE DAILY
NET ASSETS NET ASSETS
First $500 million 0.500 of 1%
Second $500 million 0.475 of 1%
Third $500 million 0.450 of 1%
Fourth $500 million 0.425 of 1%
Over $2 billion 0.400 of 1%
YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999. The Year 2000 problem may cause systems to process information incorrectly
and could disrupt businesses that rely on computers, like the Fund.
While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.
Financial Information
FINANCIAL HIGHLIGHTS
The following Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in the Fund, assuming reinvestment of any dividends and capital
gains.
This information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's financial statements, is included in this prospectus.
Financial Highlights
Reference is made to the Independent Auditors' Report on page 26.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 4.64% 4.69% 4.56% 5.13% 3.31%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.11% 1.10% 1.06% 1.08% 1.14%
Net investment income 4.54% 4.58% 4.46% 4.99% 3.27%
Expense waiver/reimbursement 2 0.18% 0.15% 0.13% 0.15% 0.00%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $83,460 $81,309 $87,381 $101,390 $114,588
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 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
Portfolio of Investments
December 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CERTIFICATES OF DEPOSIT-8.9%
BANKING-8.9%
$ 1,500,000 Canadian Imperial Bank of Commerce, Toronto, 5.800%,
4/1/1999 $ 1,499,787
1,000,000 KeyBank, N.A., 5.080%, 4/9/1999 1,000,000
3,000,000 Rabobank Nederland, Utrecht, 5.700%, 1/7/1999 2,999,940
1,900,000 Societe Generale, Paris, 5.720% - 5.835%, 3/22/1999 -
4/27/1999 1,899,779
TOTAL CERTIFICATES OF DEPOSIT 7,399,506
COMMERCIAL PAPER-50.1% 1
AEROSPACE / AUTO-4.8%
4,000,000 Johnson Controls, Inc., 5.379% - 5.502%, 1/13/1999 -
2/11/1999 3,986,652
AIRLINES-1.2%
1,000,000 United Parcel Service, 4.983%, 6/4/1999 979,381
BANKING-13.0%
500,000 Abbey National N.A. Corp., (Guaranteed by Abbey National
Bank PLC, London), 5.003%, 5/4/1999 491,663
2,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce), 5.070%, 4/14/1999 1,971,709
500,000 Cregem North America, Inc., (Guaranteed by Credit Communal
de Belgique, Brussles), 5.635%, 2/3/1999 497,488
4,000,000 Fountain Square Commercial Funding Corp., (Fifth Third Bank,
Cincinnati Support Agreement), 5.243% - 5.392%, 3/11/1999 -
3/15/1999 3,958,426
2,000,000 Greenwich Funding Corp., 5.215%, 3/5/1999 1,981,975
2,000,000 Westpac Banking Corp. Ltd., Sydney, 5.129%, 4/1/1999 1,975,000
TOTAL 10,876,261
BROKERAGE-6.0%
2,000,000 Morgan Stanley, Dean Witter & Co., 5.218%, 1/19/1999 1,994,850
3,000,000 Salomon Smith Barney Holdings, Inc., 5.145% - 5.299%,
1/6/1999 - 3/8/1999 2,980,647
TOTAL 4,975,497
CHEMICALS-0.9%
768,000 IMC Global, Inc., 5.729%, 1/15/1999 766,313
ELECTRICAL EQUIPMENT-0.8%
682,000 Whirlpool Corp., 5.629%, 1/19/1999 680,107
FINANCE - AUTOMOTIVE-1.3%
1,100,000 Ford Motor Credit Corp., 5.139% - 5.468%, 1/8/1999 -
2/5/1999 1,096,146
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER-continued 1
FINANCE - COMMERCIAL-7.6%
$ 2,000,000 Asset Securitization Cooperative Corp., 5.156%, 4/16/1999 $ 1,970,483
2,400,000 General Electric Capital Corp., 5.058% - 5.493%, 1/27/1999 -
3/17/1999 2,377,821
2,000,000 PREFCO-Preferred Receivables Funding Co., 5.164%, 3/8/1999 1,981,300
TOTAL 6,329,604
FINANCE - EQUIPMENT-0.6%
461,000 Comdisco, Inc., 5.687%, 1/15/1999 459,996
FINANCE - RETAIL-1.2%
1,000,000 Associates Corp. of North America, 4.867%, 4/19/1999 985,750
INDUSTRIAL PRODUCTS-0.6%
539,000 Praxair, Inc., 5.731%, 2/22/1999 - 2/23/1999 534,572
INSURANCE-2.1%
317,000 CNA Financial Corp., 5.533%, 1/15/1999 316,328
1,500,000 Marsh & McLennan Cos., Inc., 5.254% - 5.637%, 3/29/1999 -
4/27/1999 1,476,879
TOTAL 1,793,207
MACHINERY, EQUIPMENT, AUTO-3.6%
2,000,000 Allied-Signal, Inc., 5.625%, 1/22/1999 1,993,525
1,000,000 Eaton Corp., 5.670%, 5/7/1999 980,960
TOTAL 2,974,485
OIL & OIL FINANCE-5.4%
4,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.),
5.153%, 5/21/1999 3,921,911
597,000 Occidental Petroleum Corp., 5.710% - 5.757%, 1/11/1999 -
2/19/1999 594,400
TOTAL 4,516,311
TELECOMMUNICATIONS-1.0%
863,000 MCI Worldcom, Inc., 5.687% - 5.731%, 1/11/1999 - 1/15/1999 861,321
TOTAL COMMERCIAL PAPER 41,815,603
LOAN PARTICIPATIONS-3.0%
ELECTRICAL EQUIPMENT-0.6%
500,000 Mt. Vernon Phenol Plant Partnership, (Guaranteed by General
Electric Co.), 5.370%, 5/17/1999 500,000
FINANCE - AUTOMOTIVE-2.4%
2,000,000 General Motors Acceptance Corp., Mortgage of PA, (Guaranteed
by General Motors Acceptance Corp.), 5.720%, 1/4/1999 2,000,000
TOTAL LOAN PARTICIPATIONS 2,500,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
NOTES - VARIABLE-22.4% 3
BANKING-11.9%
$ 2,000,000 4 C's LLC, (Series 1998), (KeyBank, N.A. LOC), 5.560%,
2/25/1999 $ 2,000,000
3,000,000 American Health Care Centers, (Series 1998), (FirstMerit
Bank, N.A. LOC), 5.400%,2/25/1999 3,000,000
1,000,000 Bankers Trust Co., New York, 4.880%, 6/4/1999 999,712
2,000,000 2 Liquid Asset Backed Securities Trust, Series 1996-3,
(Westdeutsche Landesbank Girozentrale Swap Agreement),
5.556%, 2/15/1999 2,000,000
920,000 North Center Properties, (Huntington National Bank,
Columbus, OH LOC), 5.570%, 1/7/1999 920,000
1,000,000 Societe Generale, Paris, 4.883%, 8/11/1999 999,599
TOTAL 9,919,311
FINANCE - RETAIL-4.8%
2,000,000 AFS Insurance Premium Receivables Trust, (Series 1994-A),
5.834%, 1/15/1999 2,000,000
2,000,000 Associates Corp. of North America, 4.900%, 1/4/1999 1,999,992
TOTAL 3,999,992
INSURANCE-5.7%
750,000 Aspen Funding Corp., 5.100%, 1/28/1999 750,000
3,500,000 General American Life Insurance Co., 5.780%, 1/21/1999 3,500,000
544,657 2 Liquid Asset Backed Securities Trust, Series 1997-3 Senior
Notes, (Guaranteed by AMBAC), 5.254%, 3/27/1999 544,657
TOTAL 4,794,657
TOTAL NOTES - VARIABLE 18,713,960
SHORT-TERM NOTES-6.2%
BANKING-1.2%
1,000,000 SALTS III Cayman Island Corp., (Guaranteed by Bankers Trust
International, PLC), 5.571%, 3/18/1999 1,000,000
FINANCE - AUTOMOTIVE-0.6%
122,629 Chase Manhattan Auto Owner Trust 1998-C, Class A1, 5.588%,
7/9/1999 122,622
369,441 Premier Auto Trust 1998-5, Class A1, 5.140%, 7/8/1999 369,357
TOTAL 491,979
FINANCE-LEASING-1.7%
1,400,000 Green Tree Lease Finance 1998-1, LLC, Class A1, 5.201%,
1/20/2000 1,400,000
INSURANCE-2.6%
200,610 WFS Financial 1998-B Owner Trust, Class A-1, (Insured by
FSA), 5.658%, 7/20/1999 200,610
2,000,000 WFS Financial 1998-C Owner Trust, Class A-1, (Insured by
FSA), 5.395%, 11/20/1999 2,000,000
TOTAL 2,200,610
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES-continued
RECREATION-0.1%
$ 72,978 Greentree Recreational, Equipment & Consumer Trust 1998-B,
Class A-1, 5.669%, 7/15/1999 $ 72,978
TOTAL SHORT-TERM NOTES 5,165,567
REPURCHASE AGREEMENTS-9.4% 4
2,000,000 ABN AMRO Chicago Corp., 5.100%, dated 12/31/1998, due
1/4/1999 2,000,000
2,800,000 Bear, Stearns and Co., 5.100%, dated 12/31/1998, due
1/4/1999 2,800,000
2,000,000 Nationsbanc Montgomery Securities, Inc., 5.100%, dated
12/31/1998, due 1/4/1999 2,000,000
1,000,000 Societe Generale Securities Corp., 4.850%, dated 12/31/1998,
due 1/4/1999 1,000,000
TOTAL REPURCHASE AGREEMENTS 7,800,000
TOTAL INVESTMENTS (AT AMORTIZED COST) 5 $ 83,394,636
</TABLE>
1 Each issue shows the rate of discount at the time of purchase.
2 Denotes securities exempt from registration under the Securities Act of 1933,
as amended, and may only be sold to dealers and other exempt investors. These
securities have been determined to be liquid according to guidelines established
by the Board of Directors.
3 Floating rate note with current rate and next reset date shown.
4 The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
5 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($83,459,980) at December 31, 1998.
The following acronyms are used throughout this portfolio:
AMBAC -American Municipal Bond Assurance Corporation FSA -Financial Security
Assurance LLC -Limited Liability Corporation LOC -Letter of Credit PLC -Public
Limited Company See Notes which are an integral part of the Financial
Statements
Statement of Assets and Liabilities
December 31, 1998
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 7,800,000
Investments in securities 75,594,636
Total investments in securities, at amortized cost and value $ 83,394,636
Income receivable 614,016
Receivable for shares sold 234,572
TOTAL ASSETS 84,243,224
LIABILITIES:
Payable for shares redeemed 587,063
Income distribution payable 17,985
Payable to Bank 155,815
Accrued expenses 22,381
TOTAL LIABILITIES 783,244
Net assets for 83,459,980 shares outstanding $ 83,459,980
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER
SHARE:
$83,459,980 / 83,459,980 shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
Year Ended December 31, 1998
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 4,650,775
EXPENSES:
Investment advisory fee $ 413,312
Administrative personnel and services fee 125,000
Custodian fees 19,623
Transfer and dividend disbursing agent fees and expenses 145,737
Directors'/Trustees' fees 13,584
Auditing fees 14,142
Legal fees 5,268
Portfolio accounting fees 40,927
Shareholder services fee 206,118
Share registration costs 27,922
Printing and postage 34,090
Insurance premiums 7,780
Miscellaneous 7,456
TOTAL EXPENSES 1,060,959
WAIVERS-
Waiver of investment advisory fee $ (42,698)
Waiver of shareholder services fee (107,181)
TOTAL WAIVERS (149,879)
Net expenses 911,080
Net investment income $ 3,739,695
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 3,739,695 $ 3,971,252
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (3,739,695) (3,971,252)
SHARE TRANSACTIONS:
Proceeds from sale of shares 130,155,078 128,239,157
Net asset value of shares issued to shareholders in payment
of distributions declared 3,457,846 3,647,147
Cost of shares redeemed (131,462,423) (137,957,643)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 2,150,501 (6,071,339)
Change in net assets 2,150,501 (6,071,339)
NET ASSETS:
Beginning of period 81,309,479 87,380,818
End of period $ 83,459,980 $ 81,309,479
</TABLE>
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
December 31, 1998
ORGANIZATION
Money Market Management, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The investment objective of the Company is to achieve
current income consistent with stability of principal.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Company in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Company's use the amortized cost method to value its portfolio securities is
in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Company 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 Company 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 Company will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Company'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 Company could receive less
than the repurchase price on the sale of collateral securities.
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"). Distributions to shareholders are recorded on the ex- dividend
date.
FEDERAL TAXES
It is the Company'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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Company may engage in when-issued or delayed delivery transactions. The
Company 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.
CAPITAL STOCK
At December 31, 1998, there were 50,000,000,000 shares of $0.001 par value
capital stock authorized. Capital paid-in aggregated $83,459,980.
Transaction in capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1998 1997
<S> <C> <C>
Shares sold 130,155,078 128,239,157
Shares issued to shareholders in payment of distributions
declared 3,457,846 3,647,147
Shares redeemed (131,462,423) (137,957,643)
NET CHANGE RESULTING FROM SHARE TRANSACTIONS 2,150,501 (6,071,339)
</TABLE>
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Advisers, the Company's investment adviser (the "Adviser"), receives
for its services an annual investment advisory fee based on the average daily
net assets of the Company as follows: 0.50% on the first $500 million, 0.475% on
the next $500 million, 0.45% on the next $500 million, 0.425% on the next $500
million, and 0.40% thereafter. The Adviser may voluntarily choose to waive any
portion of its fee. The Adviser can modify or terminate this voluntary waiver at
any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Company 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, Inc.for the period.
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Company will pay FSSC up to 0.25% of average
daily net assets of the Company for the period. The fee paid to FSSC is used to
finance certain services for shareholders and to maintain shareholder accounts.
FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or
terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary, FSSC serves as transfer and dividend disbursing
agent for the Company. The fee paid to FSSC is based on the size, type, and
number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Company's accounting records for which it receives a fee.
The fee is based on the level of the Company's average daily net assets for the
period, plus out-of-pocket expenses.
GENERAL
Certain of the Officers and Directors of the Company are Officers and Directors
or Trustees of the above companies.
YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Company could be adversely
affected if the computer systems used by the Company's service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. The Company's Adviser and administrator are taking measures
that they believe are reasonably designed to address the Year 2000 issue with
respect to computer systems that they use and to obtain reasonable assurances
that comparable steps are being taken by each of the Company's other service
providers. At this time, however, there can be no assurance that these steps
will be sufficient to avoid any adverse impact to the Company.
Independent Auditors' Report
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
MONEY MARKET MANAGEMENT, INC.
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of Money Market Management, Inc., (the Company), as
of December 31, 1998, the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years ended
December 31, 1998 and 1997 and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Company'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 the securities owned at
December 31, 1998, by correspondence with the custodian. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Money Market
Management, Inc., as of December 31, 1998, the results of its operations, the
changes in its net assets and its financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
February 12, 1999
[Graphic]
PROSPECTUS
Money Market Management, Inc.
February 28, 1999
A Statement of Additional Information (SAI) dated February 28, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Fund's semi-annual report to shareholders
as it becomes available. To obtain the SAI, semi-annual report and other
information without charge, call your investment professional or the Fund at
1-800-341-7400.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
[Graphic]
Money Market Management, Inc.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-2430
Cusip 09346200
8012811A (2/99)
[Graphic]
A. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Money Market Management, Inc. as of the calendar
year-end for each of ten years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 2% up to 10%.
The `x' axis represents calculation periods for the last ten calendar years of
Money Market Management, Inc., beginning with December 31, 1989. The chart
features ten distinct vertical bars, each shaded in charcoal, and each visually
representing by height the total return percentages for the calendar year stated
directly at its base. The calculated total return percentage for Money Market
Management, Inc. for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1989 through 1998. The percentages noted
are: 8.73%, 7.65%, 5.43%, 2.86%, 2.19%, 3.31%, 5.13%, 4.56%, 4.69%, and 4.64%,
respectively.
STATEMENT OF ADDITIONAL INFORMATION
Money Market Management, Inc.
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Money Market Management, Inc., dated
February 28, 1999. Obtain the prospectus without charge by calling
1-800-341-7400.
FEBRUARY 28, 1999
[Graphic]
Money Market Management, Inc.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
8012811B (2/99)
Federated is a registered mark of Federated Investors, Inc.
1999 (C)Federated Investors, Inc.
[Graphic]
CONTENTS
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
How is the Fund Sold? 5
Exchanging Securities for Shares 6
Subaccounting Services 6
Redemption in Kind 6
Account and Share Information 6
Tax Information 6
Who Manages and Provides Services to the Fund? 7
How Does the Fund Measure Performance? 10
Who is Federated Investors, Inc.? 11
Addresses 13
How is the Fund Organized?
The Fund is a diversified open-end, management investment company that was
established under the laws of the State of Maryland on October 30, 1973. The
Fund was reorganized as a Massachusetts business trust on June 29, 1982, and
then re-established as a Maryland corporation under Articles of Incorporation
dated August 19, 1992. The Fund's investment adviser is Federated Advisers
(Adviser).
Securities in Which the Fund Invests
In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher credit risks
generally have higher yields.
The following describes the types of fixed income securities in which the Fund
invests.
Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risk.
Agency Securities
Agency securities are issued or guaranteed by a federal agency or other
government-sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full, faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.
The Fund treats mortgage-backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does not
reduce the market and prepayment risks of these mortgage-backed securities.
Corporate Debt Securities
Corporate debt securities are fixed-income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.
Municipal Securities
Municipal securities are issued by states, counties, cities, and other political
subdivisions and authorities. Although many municipal securities are exempt from
federal income tax, the Fund may invest in taxable municipal securities.
Mortgage-Backed Securities
Mortgage-backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates, maturities,
and other terms. Mortgages may have fixed or adjustable interest rates.
Interests in pools of adjustable-rate mortgages are known as ARMs.
Mortgage-backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest formof mortgage-backed securities are
pass-through certificates. An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer deducts
its fees and expenses and passes the balance of the payments onto the
certificate holders once a month. Holders of pass-through certificates receive a
pro rata share of all payments and pre-payments from the underlying mortgages.
As a result, the holders assume all the prepayment risks of the underlying
mortgages.
Asset-Backed Securities
Asset-backed securities are payable from pools of obligations other than
mortgages. Most asset-backed securities involve consumer or commercial debts
with maturities of less than 10 years. However, almost any type of fixed-income
assets (including other fixed-income securities) may be used to create an
asset-backed security. Asset-backed securities may take the form of commercial
paper, notes, or pass-through certificates. Asset- backed securities have
prepayment risks. Zero Coupon Securities
Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the market and credit risks of a zero coupon security.
There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created from interest-bearing bonds by separating the right to receive the
bond's coupon payments from the right to receive the bond's principal due at
maturity, a process known as coupon stripping. Treasury STRIPs are the most
common forms of stripped zero coupon securities.
Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default. The short
maturity of commercial paper reduces both the market and credit risks as
compared to other debt securities of the same issuer.
Bank instruments
Bank instruments are unsecured interest-bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit,
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
Demand instruments
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
Credit Enhancement
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed-income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed-income security
based solely upon its credit enhancement.
Common types of credit enhancement include guarantees, letters of credit, bond
insurance, and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed-income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed-income security.
FOREIGN SECURITIES
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if:
* it is organized under the laws of, or has a principal office located in,
another country;
* the principal trading market for its securities is in another country; or
* it (or its subsidiaries) derived in its most current fiscal year at least 50%
of its total assets, capitalization, gross revenue, or profit from goods
produced, services performed, or sales made in another country.
Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject to currency risks and risks of foreign investing.
DEPOSITARY RECEIPTS
Depositary receipts represent interests in underlying securities issued by a
foreign company. Depositary receipts are not traded in the same market as the
underlying security. The foreign securities underlying American Depositary
Receipts (ADRs) are traded in the United States. ADRs provide a way to buy
shares of foreign-based companies in the United States rather than in overseas
markets. ADRs are also traded in U.S. dollars, eliminating the need for foreign
exchange transactions. The foreign securities underlying European Depositary
Receipts (EDRs), Global Depositary Receipts (GDRs), and International Depositary
Receipts (IDRs), are traded globally or outside the United States. Depositary
receipts involve many of the same risks of investing directly in foreign
securities, including currency risks and risks of foreign investing.
FOREIGN GOVERNMENT SECURITIES
Foreign government securities generally consist of fixed-income securities
supported by national, state, or provincial governments or similar political
subdivisions. Foreign government securities also include debt obligations of
supranational entities, such as international organizations designed or
supported by governmental entities to promote economic reconstruction or
development, international banking institutions, and related government
agencies. Examples of these include, but are not limited to, the International
Bank for Reconstruction and Development (the World Bank), the Asian Development
Bank, the European Investment Bank, and the Inter-American Development Bank.
Foreign government securities also include fixed-income securities of
quasi-governmental agencies that are either issued by entities owned by a
national, state, or equivalent government or are obligations of a political unit
that are not backed by the national government's full faith and credit. Further,
foreign government securities include mortgage-related securities issued or
guaranteed by national, state, or provincial governmental instrumentalities,
including quasi-governmental agencies.
SPECIAL TRANSACTIONS
Repurchase Agreements
Repurchase Agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
Delayed Delivery Transactions
Delayed delivery transactions, including when-issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create market
risks for the Fund. Delayed delivery transactions also involve credit risks in
the event of a counterparty default.
Asset Coverage
In order to secure its obligations in connection with derivatives contracts or
special transactions, the Fund will either own the underlying assets, enter into
an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds the Fund's obligations. Unless the Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations entering into an offsetting derivative contract or terminating
a special transaction. This may cause the Fund to miss favorable trading
opportunities or to realize losses on derivative contracts or special
transactions.
INVESTMENT RATINGS
A nationally recognized statistical ratings organization's two highest rating
categories are determined without regard for sub-categories and gradations. For
example, securities rated A-1+, A-1, or A-2 by Standard & Poor's, Prime-1, or
Prime-2 by Moody's Investors Service, Inc. (Moody's), or F-1 (+ or -) or F-2 (+
or -) by Fitch IBCA, Inc. are all considered rated in one of the two highest
short-term rating categories. The Fund will follow applicable regulations in
determining whether a security rated by more than one nationally recognized
statistical ratings organization can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two nationally recognized statistical ratings organizations in one of their
two highest rating categories. See "Regulatory Compliance."
INVESTMENT RISKS
MARKET RISK
Prices of fixed-income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices of
fixed-income securities fall. Interest rate changes have a greater effect on the
price of fixed-income securities with longer maturities. Money market funds try
to minimize this risk by purchasing short-term securities.
CREDIT RISK
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities. Many fixed-income securities receive credit ratings
from services such as Standard & Poor's and Moody's. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely upon the Adviser's credit assessment.
Fixed-income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline. Credit risk includes the possibility that a party to
a transaction involving the Fund will fail to meet its obligations. This could
cause the Fund to lose the benefit of the transaction or prevent the Fund from
selling or buying other securities to implement its investment strategy.
RISKS OF FOREIGN INVESTING
Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Foreign
financial markets may also have fewer investor protections. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.
Foreign countries may have restrictions on foreign ownership or may impose
exchange controls, capital flow restrictions or repatriation restrictions which
could adversely affect the Fund's investments.
Foreign financial markets may have fewer investor protections than U.S. markets.
For instance, there may be less publicly available information about foreign
companies, and the information that is available may be difficult to obtain or
may not be current. In addition, foreign countries may lack financial controls
and reporting standards, or regulatory requirements, comparable to those
applicable to U.S. companies.
Due to these risk factors, foreign securities may be more volatile and less
liquid than similar securities traded in the U.S.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin.
BORROWING MONEY
The Fund will not borrow money except as a temporary measure for extraordinary
purposes and then only in amounts not in excess of 5% of the value of its net
assets. In addition, the Fund may enter into reverse repurchase agreements and
otherwise borrow up to one-third of the value of its total assets, including the
amount borrowed, in order to meet redemption requests without immediately
selling any portfolio instruments. This latter practice is not for investment
leverage but solely to facilitate management of the portfolio by enabling the
Fund to meet redemption requests when the liquidation of portfolio instruments
would be inconvenient or disadvantageous. Interest paid on borrowed funds will
not be available for investment. The Fund may not purchase any portfolio
instruments while any borrowings (exclusive of reverse repurchase agreements)
are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except as
necessary to secure permitted borrowings. In those cases, it may mortgage,
pledge, or hypothecate assets having a market value not exceeding the lesser of
the dollar amounts borrowed or 10% of the value of total assets at the time of
the borrowing.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets, except that it may purchase or hold
money market instruments permitted by its investment objective and policies.
INVESTING IN COMMODITIES AND REAL ESTATE
The Fund will not invest in commodities, commodity contracts, or real estate,
except that it may purchase money market instruments issued by companies that
invest in real estate or interests in real estate.
UNDERWRITING
The Fund will not act as underwriter of securities issued by others, except as
it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of restricted securities which the Fund may purchase
pursuant to its investment objective, policies, and limitations.
CONCENTRATION OF INVESTMENTS
The Fund will not purchase money market instruments if, as a result of such
purchase, more than 25% of the value of its total assets would be invested in
any one industry. However, investing in bank instruments (such as time and
demand deposits and certificates of deposit), U.S. government obligations, or
instruments secured by these money market instruments, such as repurchase
agreements, shall not be considered investments in any one industry.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not invest in securities issued by any other investment company.
INVESTING FOR CONTROL
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE "VOTE OF A
MAJORITY OF ITS OUTSTANDING VOTING SECURITIES," AS DEFINED BY THE INVESTMENT
COMPANY ACT. THE FOLLOWING LIMITATION, HOWEVER, MAY BE CHANGED BY THE BOARD
WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL
CHANGE IN THIS LIMITATION BECOMES EFFECTIVE.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
For purposes of the above limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus, and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items." Except with
respect to borrowing money, if a percentage limitation is adhered to at the time
of investment, a later increase or decrease in percentage resulting from any
change in value or net assets will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of the value
of its net assets during the last fiscal year and has no present intent to do so
during the coming fiscal year.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the Investment
Fund Act of 1940. In particular, the Fund will comply with the various
requirements of Rule 2a-7, which regulates money market mutual funds. The Fund
will also determine the effective maturity of its investments, as well as its
ability to consider a security as having received the requisite short-term
ratings by nationally recognized ratings services, according to Rule 2a-7. The
Fund may change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Directors have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Directors must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Fund's investment objective. The procedures
include monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of market
value. The Directors will decide what, if any, steps should be taken if there is
a difference of more than 0.5 of 1% between the two values. The Directors will
take any steps they consider appropriate (such as redemption in kind or
shortening the average portfolio maturity) to minimize any material dilution or
other unfair results arising from differences between the two methods of
determining net asset value.
REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE
These reductions or eliminations are offered because no sales commissions have
been advanced to the investment professional selling Shares; the shareholder has
already paid a Contingent Deferred Sales Charge (CDSC); or nominal sales efforts
are associated with the original purchase of Shares.
Upon notification to the Distributor or the Fund's transfer agent, no CDSC will
be imposed on redemptions:
* following the death or post-purchase disability, as defined in Section
72(m)(7) of the Internal Revenue Code of 1986, of the last surviving
shareholder; and
* representing minimum required distributions from an Individual Retirement
Account or other retirement plan to a shareholder who has attained the age of
70-1/2.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers Shares on a continuous, best-efforts basis.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.
Exchanging Securities for Shares
You may contact the Distributor to request a purchase of Shares in exchange for
securities you own. The Fund reserves the right to determine whether to accept
your securities and the minimum market value to accept. The Fund will value your
securities in the same manner as it values its assets. This exchange is treated
as a sale of your securities for federal tax purposes.
Subaccounting Services
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
Account and Share Information
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Director elections and
other matters submitted to shareholders for vote. All Shares of the Fund have
equal voting rights.
Directors may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Corporation's outstanding
shares.
As of February 8, 1999, there were no shareholders who owned of record,
beneficially, or both, 5% or more of outstanding Shares.
Tax Information
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
Who Manages and Provides Services to the Fund?
BOARD OF DIRECTORS
The Board is responsible for managing the Fund's business affairs and for
exercising all the Fund's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Fund,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Director from the Fund for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Federated Fund Complex is
comprised of 54 investment companies, whose investment advisers are affiliated
with the Fund's Adviser.
As of February 8, 1999, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding shares.
An asterisk (*) denotes a Director who is deemed to be an interested person as
defined in the Investment Company Act of 1940. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.
<TABLE>
<CAPTION>
NAME AGGREGATE
BIRTHDATE COMPENSATION TOTAL
ADDRESS PRINCIPAL OCCUPATIONS FROM COMPENSATION FROM FUND
POSITION WITH FUND FOR PAST 5 YEARS FUND AND FUND COMPLEX
<S> <C> <C> <C>
JOHN F. DONAHUE*+ Chief Executive Officer and Director or Trustee of the $0 $0 for the Fund and
Birthdate: July 28, 1924 Federated Fund Complex; Chairman and Director, Federated 54 other investment
Federated Investors Tower Investors, Inc.; Chairman and Trustee, Federated Advisers, companies in the
1001 Liberty Avenue Federated Management, and Federated Research; Chairman and Fund Complex
Pittsburgh, PA Director, Federated Research Corp., and Federated Global
CHAIRMAN and DIRECTOR Research Corp.; Chairman, Passport Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of the Federated Fund Complex; Director, $1,076.32 $113,860.22 for
Birthdate: February 3, 1934 Member of Executive Committee, Children's Hospital of the Fund and
15 Old Timber Trail Pittsburgh; formerly: Senior Partner, Ernst & Young LLP; 54 other investment
Pittsburgh, PA Director, MED 3000 Group, Inc.; Director, Member of companies in the
DIRECTOR Executive Committee, University of Pittsburgh. Fund Complex
JOHN T. CONROY, JR. Director or Trustee of the Federated Fund Complex; $1,184.12 $125,264.48 for
Birthdate: June 23, 1937 President, Investment Properties Corporation; Senior Vice the Fund and
Wood/IPC Commercial Dept. President, John R. Wood and Associates, Inc., Realtors; 54 other investment
John R. Wood Associates, Inc. Partner or Trustee in private real estate ventures in companies in the
Realtors Southwest Florida; formerly: President, Naples Property Fund Complex
3255 Tamiami Trial North Management, Inc. and Northgate Village Development
Naples, FL Corporation.
DIRECTOR
NICHOLAS CONSTANTAKIS Director or Trustee of the Federated Fund Complex; formerly: $1,076.32 $47,958.02 for
Birthdate: September 3, 1939 Partner, Andersen Worldwide SC. the Fund and
175 Woodshire Drive 29 other investment
Pittsburgh, PA companies in the
DIRECTOR Fund Complex
WILLIAM J. COPELAND Director or Trustee of the Federated Fund Complex; Director $1,184.12 $125,264.48 for
Birthdate: July 4, 1918 and Member of the Executive Committee, Michael Baker, Inc.; the Fund and
One PNC Plaza-23rd Floor formerly: Vice Chairman and Director, PNC Bank, N.A., and 54 other investment
Pittsburgh, PA PNC Bank Corp.; Director, Ryan Homes, Inc. companies in the
DIRECTOR Previous Positions: Director, United Refinery; Director, Fund Complex
Forbes Fund; Chairman, Pittsburgh Foundation; Chairman,
Pittsburgh Civic Light Opera.
JOHN F. CUNNINGHAM++ Director or Trustee of some of the Federated Funds; $0 $0 for the Fund and
Birthdate: March 5, 1943 Chairman, President and Chief Executive Officer, Cunningham 26 other investment
353 El Brillo Way & Co., Inc.; Trustee Associate, Boston College; Director, companies in the
Palm Beach, FL EMC Corporation; formerly: Director, Redgate Communications. Fund Complex
DIRECTOR Previous Positions: Chairman of the Board and Chief
Executive Officer, Computer Consoles, Inc.;
President and Chief Operating Officer, Wang
Laboratories; Director, First National Bank of
Boston; Director, Apollo Computer, Inc.
J. CHRISTOPHER DONAHUE*+ President or Executive Vice President of the Federated Fund $0 $0 for the Fund and
Birthdate: April 11, 1949 Complex; Director or Trustee of some of the Funds in the 16 other investment
Federated Investors Tower Federated Fund Complex; President and Director, Federated companies
1001 Liberty Avenue Investors, Inc.; President and Trustee, Federated Advisers, in the Fund Complex
Pittsburgh, PA Federated Management, and Federated Research; President and
PRESIDENT and DIRECTOR Director, Federated Research Corp. and Federated Global
Research Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated
Services Company.
<CAPTION>
NAME AGGREGATE
BIRTHDATE COMPENSATION TOTAL
ADDRESS PRINCIPAL OCCUPATIONS FROM COMPENSATION FROM FUND
POSITION WITH FUND FOR PAST 5 YEARS FUND AND FUND COMPLEX
<S> <C> <C> <C>
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund Complex; Professor $1,076.32 $113,860.22 for
Birthdate: October 11, 1932 of Medicine, University of Pittsburgh; Medical Director, the Fund and
3471 Fifth Avenue University of Pittsburgh Medical Center-Downtown; 54 other
Suite 1111 Hematologist, Oncologist, and Internist, University of investment companies
Pittsburgh, PA Pittsburgh Medical Center; Member, National Board of in the Fund Complex
DIRECTOR Trustees, Leukemia Society of America.
PETER E. MADDEN Director or Trustee of the Federated Fund Complex; formerly: $1,076.32 $113,860.22 for the Fund
Birthdate: March 16, 1942 Representative, Commonwealth of Massachusetts General Court; and 54 other
One Royal Palm Way President, State Street Bank and Trust Company and State investment companies
100 Royal Palm Way Street Corporation. in the Fund Complex
Palm Beach, FL Previous Positions: Director, VISA USA and VISA
DIRECTOR International; Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation.
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Funds; $0 $0 for the Fund and
Birthdate: April 10, 1945 Management Consultant. 26 other
80 South Road Previous Positions: Chief Executive Officer, PBTC investment companies
Westhampton Beach, NY International Bank; Chief Financial Officer of Retail in the Fund Complex
DIRECTOR Banking Sector, Chase Manhattan Bank; Senior Vice President,
Marine Midland Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G. Zarb School of
Business, Hofstra University.
JOHN E. MURRAY, JR., J.D., S.J Director or Trustee of the Federated Fund Complex; $1,076.32 $113,860.22 for the
Birthdate: December 20, 1932 President, Law Professor, Duquesne University; Consulting Fund and 54 other
President, Duquesne University Partner, Mollica & Murray. investment companies
Pittsburgh, PA Previous Positions: Dean and Professor of Law, University of in the Fund Complex
DIRECTOR Pittsburgh School of Law; Dean and Professor of Law,
Villanova University School of Law.
MARJORIE P. SMUTS Director or Trustee of the Federated Fund Complex; Public $1,076.32 $113,860.22 for the
Birthdate: June 21, 1935 Relations/Marketing/Conference Planning. Fund and 54 other
4905 Bayard Street Previous Positions: National Spokesperson, Aluminum Company investment companies
Pittsburgh, PA of America; business owner. in the Fund Complex
DIRECTOR
JOHN S. WALSH++ Director or Trustee of some of the Federated Funds; $0 $0 for the Fund
Birthdate: November 28, 1957 President and Director, Heat Wagon, Inc.; President and and 23 other
2007 Sherwood Drive Director, Manufacturers Products, Inc.; President, Portable investment companies
Valparaiso, IN Heater Parts, a division of Manufacturers Products, Inc.; in the Fund Complex
DIRECTOR Director, Walsh & Kelly, Inc.; formerly: Vice President,
Walsh & Kelly, Inc.
EDWARD C. GONZALES Trustee or Director of some of the Funds in the Federated $0 $0 for the Fund
Birthdate: October 22, 1930 Fund Complex; President, Executive Vice President and and 1 other
Federated Investors Tower Treasurer of some of the Funds in the Federated Fund Complex; investment company
1001 Liberty Avenue Vice Chairman, Federated Investors, Inc.; Vice President, in the Fund Complex
Pittsburgh, PA Federated Advisers, Federated Management, Federated
EXECUTIVE VICE PRESIDENT Research, Federated Research Corp., Federated Global
Research Corp. and Passport Research, Ltd.; Executive Vice
President and Director, Federated Securities Corp.; Trustee,
Federated Shareholder Services Company.
JOHN W. MCGONIGLE Executive Vice President and Secretary of the Federated Fund $0 $0 for the Fund
Birthdate: October 26, 1938 Complex; Executive Vice President, Secretary, and Director, and 54 other
Federated Investors Tower Federated Investors, Inc.; Trustee, Federated Advisers, investment companies
1001 Liberty Avenue Federated Management, and Federated Research; Director, in the Fund Complex
Pittsburgh, PA Federated Research Corp. and Federated Global Research
EXECUTIVE VICE PRESIDENT Corp.; Director, Federated Services Company; Director,
and SECRETARY Federated Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated Fund Complex; Vice President- $0 $0 for the Fund
Birthdate: June 17, 1954 Funds Financial Services Division, Federated Investors, and 54 other
Federated Investors Tower Inc.; Formerly: various management positions within Funds investment companies
1001 Liberty Avenue Financial Services Division of Federated Investors, Inc. in the Fund Complex
Pittsburgh, PA
TREASURER
RICHARD B. FISHER President or Vice President of some of the Funds in the $0 $0 for the Fund
Birthdate: May 17, 1923 Federated Fund Complex; Director or Trustee of some of the and 6 other
Federated Investors Tower Funds in the Federated Fund Complex; Executive Vice investment companies
1001 Liberty Avenue President, Federated Investors, Inc.; Chairman and Director, in the Fund Complex
Pittsburgh, PA Federated Securities Corp.
VICE PRESIDENT
<CAPTION>
NAME AGGREGATE
BIRTHDATE COMPENSATION TOTAL
ADDRESS PRINCIPAL OCCUPATIONS FROM COMPENSATION FROM FUND
POSITION WITH FUND FOR PAST 5 YEARS FUND AND FUND COMPLEX
<S> <C> <C> <C>
WILLIAM D. DAWSON, III Chief Investment Officer of this Fund and various other $0 $0 for the Fund
Birthdate: March 3, 1949 Funds in the Federated Fund Complex; Executive Vice and 41 other
Federated Investors Tower President, Federated Investment Counseling, Federated Global investment companies
1001 Liberty Avenue Research Corp., Federated Advisers, Federated Management, in the Fund Complex
Pittsburgh, PA Federated Research, and Passport Research, Ltd.; Registered
CHIEF INVESTMENT OFFICER Representative, Federated Securities Corp.; Portfolio
Manager, Federated Administrative Services; Vice President,
Federated Investors, Inc.; Formerly: Executive Vice
President and Senior Vice President, Federated Investment
Counseling Institutional Portfolio Management Services
Division; Senior Vice President, Federated Research Corp.,
Federated Advisers, Federated Management, Federated
Research, and Passport Research, Ltd.
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is Vice President of the Fund. $0 $0 for the Fund
Birthdate: September 15, 1959 Ms. Cunningham joined Federated Investors in 1981 and has and 6 other
Federated Investors Tower been a Senior Portfolio Manager and a Senior Vice President investment companies
1001 Liberty Avenue of the Fund's Adviser since 1997. Ms. Cunningham served as a in the Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Adviser from
VICE PRESIDENT 1993 until 1996. Ms. Cunningham is a Chartered Financial
Analyst and received her M.S.B.A. in Finance from Robert
Morris College.
</TABLE>
+ Mr. Donahue is the father of J. Christopher Donahue, President and
Director of the Corporation.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Directors on January 1, 1999. They did not earn any fees for serving the Fund
Complex since these fees are reported as of the end of the last calendar year.
They did not receive any fees as of the fiscal year end of the Fund.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.
The Adviser is a wholly owned subsidiary of Federated.
The Adviser shall not be liable to the Corporation, the Fund, or any Fund
shareholder for any losses that may be sustained in the purchase, holding, or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the
Corporation.
OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling Shares of the Fund
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Fund's Board.
RESEARCH SERVICES
Research services may include advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services. Research
services may be used by the Adviser or by affiliates of Federated in advising
other accounts. To the extent that receipt of these services may replace
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise
reasonable business judgment in selecting those brokers who offer brokerage and
research services to execute securities transactions. They determine in good
faith that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual Funds as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED FUNDS
<S> <C>
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
Deloitte & Touche LLP is the independent auditor for the Fund.
FEES PAID BY THE FUND FOR SERVICES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31 1998 1997 1996
<S> <C> <C> <C>
Advisory Fee Earned $413,312 $433,191 $504,804
Advisory Fee Reduction $42,698 $14,375 $0
Brokerage Commissions $0 $0 $0
Administrative Fee $125,000 $125,002 $125,000
Shareholder Services Fee $98,937 - -
</TABLE>
How Does the Fund Measure Performance?
The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of Shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's or any class of Shares' expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns given for the one-, five- and ten-year periods ended December 31,
1998.
Yield and Effective Yield given for the 7-day period ended December 31, 1998.
<TABLE>
<CAPTION>
7-DAY PERIOD 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Total Return 4.64% 4.46% 4.90%
Yield 4.25%
Effective Yield 4.34%
</TABLE>
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
YIELD
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding 1 to the base-period return, raising the sum to
the 365/7th power; and subtracting 1 from the result.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;
* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and
* information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
* LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund categories based
on total return, which assumes the reinvestment of all income dividends and
capital gains distributions, if any.
* IBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.
* MONEY, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
* BANK RATE MONITOR(C) NATIONAL INDEX, Miami Beach, Florida, published weekly,
is an average of the interest rates of personal money market deposit accounts at
ten of the largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. If more than one rate is offered, the lowest
rate is used. Account minimums and compounding methods may vary.
Who is Federated Investors, Inc.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
FEDERATED FUNDS OVERVIEW
MUNICIPAL FUNDS
In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
EQUITY FUNDS
In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
CORPORATE BOND FUNDS
In the corporate bond sector, as of December 31, 1998,
Federated managed 9 money market funds and 15 bond funds with assets
approximating $22.8 billion and $7.1 billion, respectively. Federated's
corporate bond decision making-based on intensive, diligent credit analysis-is
backed by over 26 years of experience in the corporate bond sector. In 1972,
Federated introduced one of the first high-yield bond funds in the industry. In
1983, Federated was one of the first fund managers to participate in the
asset-backed securities market, a market totaling more than $209 billion.
GOVERNMENT FUNDS
In the government sector, as of December 31, 1998, Federated manages 9
mortgage-backed, 5 government/agency and 19 government money market mutual
funds, with assets approximating $5.3 billion, $1.8 billion, and $41.6 billion,
respectively. Federated trades approximately $425 million in U.S. government and
mortgage-backed securities daily and places approximately $25 billion in
repurchase agreements each day. Federated introduced the first U.S. government
fund to invest in U.S. government bond securities in 1969. Federated has been a
major force in the short- and intermediate-term government markets since 1982
and currently manages approximately $43.2 billion in government funds within
these maturity ranges.
MONEY MARKET FUNDS
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime, and 23 municipal with assets
approximating $41.6 billion, $22.8 billion, and $12.5 billion, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
FEDERATED CLIENTS OVERVIEW
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
INSTITUTIONAL CLIENTS
Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax-exempt entities, foundations/endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.
BANK MARKETING
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.
Addresses
MONEY MARKET MANAGEMENT, INC.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
INVESTMENT ADVISER
Federated Advisers
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110-1617
[Graphic]
PART C. OTHER INFORMATION.
Item 23.
(a) Conformed copy of Articles of Incorporation of the
Registrant (8);
(b) Copy of By-Laws of the Registrant, as amended (4);
(i) Copy of Amendment No. 1 to the By-Laws of the
Registrant dated February 23, 1998 (12);
(ii) Copy of Amendment No. 2 to the By-Laws of the
Registrant dated February 27, 1998 (12);
(iii) Copy of Amendment No. 3 to the By-Laws of the
Registrant dated May 12, 1998 (12); (c) Copy of Specimen
Certificate for Shares of Common Stock of the Registrant
(9); (d) Conformed copy of Investment Advisory Contract
of the Registrant (9); (e) (i) Conformed copy of
Distributor's Contract of the Registrant (9);
(ii) The Registrant hereby incorporates the
conformed copy of the specimen Mutual Funds Sales
and Service Agreement; Mutual Funds Service
Agreement and Plan Trustee/Mutual Funds Service
Agreement from Item 24(b)6 of the Cash Trust Series
II Registration Statement on Form N-1A, filed with
the Commission on July 24, 1995. (File Nos.
33-38550 and 811-6269)
(f) Not applicable;
(g) Conformed copy of Custodian Agreement of the Registrant (10);
(i) Conformed copy of Domestic Custody Fee
Schedule (12);
(h) (i) Conformed Copy of Amended and Restated
Agreement for Fund Accounting, Shareholder
Recordkeeping, and Custody Services
Procurement of the Registrant (12);
(ii) Conformed Copy of Shareholder Services
Agreement(10);
(iii) The responses described in Item 24(6)(ii) are
hereby incorporated by reference. (i) Not applicable; (j)
Conformed copy of Consent of Independent Auditors; + (k)
Not applicable; (l) Conformed copy of Initial
Capitalization
Letter (9);
(m) Not applicable;
+ All exhibits have been filed electronically.
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 57 on Form N-1A filed February 19, 1988. (File Nos. 2-49591
and 811-2430)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 68 on Form N-1A filed February 25, 1993. (File Nos. 2-49591
and 811-2430)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 70 on Form N-1A filed February 24, 1994. (File Nos. 2-49591
and 811-2430)
10. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 74 on Form N-1A filed February 29, 1996. (File Nos. 2-49591
and 811-2430)
12. Response is incorporated by reference to Registrant's Post- Effective
Amendment No. 78 on Form N-1A filed December 23, 1998. (File Nos. 2-49591
and 811-2430)
<PAGE>
(n) Copy of Financial Data Schedule; +
(o) Not applicable;
(p) Confomed copy of Power of Attorney; +
(i) Conformed copy of Power of Attorney of Treasurer of
the Registrant (12); (ii) Conformed copy of Power of
Attorney of Chief Investment Officer of the Registrant
(12);
(iii) Conformed copy of Power of Attorney of Director of
the Registrant; + (iv) Conformed copy of Power of
Attorney of Director of the Registrant; +
(v) Conformed copy of Power of Attorney of
Director of the Registrant; +
Item 24. Persons Controlled by or Under Common Control with Registrant:
None
Item 25. Indemnification: (9):
Item 26. Business and Other Connections of Investment Adviser:
(a) For a description of the other business of the investment adviser,
see the section entitled "Who Manages the Fund?" in Part A. The
affiliations with the Registrant of four of the Trustees and one of
the Officers of the investment adviser are included in Part B of this
Registration Statement under "Who Manages and Provides Services to
the Fund?" The remaining Trustee of the investment adviser, his
position with the investment adviser, and, in parentheses, his
principal occupation is: Mark D. Olson (Partner, Wilson, Halbrook &
Bayard), 107 W. Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are:
Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden
Senior Vice Presidents: Joseph M. Balestrino
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Mark E. Durbiano
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski
+ All exhibits have been filed electronically.
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 70 on Form N-1A filed February 24, 1994. (File Nos. 2-49591
and 811-2430)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 76 filed February 26, 1997. (File Nos. 2-49591 and 811- 2430)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 78 on Form N-1A filed December 23, 1998. (File Nos. 2- 49591
and
811-2430)
Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
David A. Briggs
Micheal W. Casey
Kenneth J. Cody
Alexandre de Bethmann
Michael P. Donnelly
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
Edward C. Gonzales
James E. Grefenstette
Susan R. Hill
Stephen A. Keen
Robert K. Kinsey
Robert M. Kowit
Jeff A. Kozemchak
Richard J. Lazarchic
Steven Lehman
Marian R. Marinack
Keith J. Sabol
Frank Semack
Aash M. Shah
Christopher Smith
Tracy P. Stouffer
Edward J. Tiedge
Paige M. Wilhelm
Jolanta M. Wysocka
Marc Halperin
Assistant Vice Presidents: Nancy J. Belz
Robert E. Cauley
Lee R. Cunningham, II
B. Anthony Delserone, Jr.
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
John T. Gentry
William R. Jamison
Constantine Kartsonsas
John C. Kerber
Grant K. McKay
Natalie F. Metz
Joseph M. Natoli
John Sheehy
Michael W. Sirianni
Leonardo A. Vila
Lori A. Wolff
Gary Farwell
Secretary: Stephen A. Keen
Treasurer: Thomas R. Donahue
Assistant Secretaries: Thomas R. Donahue
Richard B. Fisher
Christine I. Newcamp
Assistant Treasurer: Richard B. Fisher
The business address of each of the Officers of the investment
adviser is Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the investment
companies in the Federated Fund Complex described in Part B of this
Registration Statement.
ITEM 27. PRINCIPAL UNDERWRITERS:
(a) Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant:
Automated Government Money Trust; Cash Trust Series II; Cash Trust Series, Inc.;
CCB Funds; Edward D. Jones & Co. Daily Passport Cash Trust; Federated Adjustable
Rate U.S. Government Fund, Inc.; Federated American Leaders Fund, Inc.;
Federated ARMs Fund; Federated Core Trust; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for U.S. Government Securities, Inc.;
Federated GNMA Trust; Federated Government Income Securities, Inc.; Federated
Government Trust; Federated High Income Bond Fund, Inc.; Federated High Yield
Trust; Federated Income Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust; Federated Insurance Series;
Federated Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated
Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated Stock and
Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; ; Hibernia Funds;
Independence One Mutual Funds; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; Liberty U.S. Government Money
Market Trust; Liquid Cash Trust; Managed Series Trust; Marshall Funds, Inc.;
Money Market Management, Inc.; Money Market Obligations Trust; Money Market
Obligations Trust II; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Regions Funds; RIGGS Funds; SouthTrust Funds; Tax-Free
Instruments Trust; The Planters Funds; The Wachovia Funds; The Wachovia
Municipal FundsTrust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; World Investment Series, Inc.; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; DG Investor Series; High Yield Cash Trust; Investment Series
Trust; Star Funds; Targeted Duration Trust; The Virtus Funds; Trust for
Financial Institutions;
Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.
<PAGE>
<TABLE>
<CAPTION>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
<S> <C> <C>
Richard B. Fisher Director, Chairman, Chief
Federated Investors Tower Executive Officer, Chief
1001 Liberty Avenue Operating Officer, Asst.
Pittsburgh, PA 15222-3779 Secretary and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice
Federated Investors Tower President,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Assistant Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Matthew S. Hardin Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Leslie K. Ross Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records:
Money Market Management, Inc. Federated Investors Funds
(Registrant) 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(Notices should be sent to the Agent for Service at the above address)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Federated Shareholder
Services Company P.O. Box 8600
(Transfer Agent and Dividend Boston, MA 02266-8600
Disbursing Agent)
Federated Services Company Federated Investors Tower
(Administrator) 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Federated Advisers Federated Investors Tower
(Adviser) 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
State Street Bank and Trust P.O. Box 8600
Company Boston, MA 02266-8600
(Custodian)
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Directors and the calling of special shareholder meetings by
shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET MANAGEMENT, INC.,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania, on
the 25th day of February, 1999.
MONEY MARKET MANAGEMENT, INC.
BY: /s/ Karen M. Brownlee
Karen M. Brownlee , Assistant Secretary
Attorney in Fact for John F. Donahue
February 25, 1999
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
NAME TITLE DATE
By: /s/ Karen M. Brownlee
Karen M. Brownlee Attorney In Fact February 25, 1999
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Director
(Chief Executive Officer)
J. Christopher Donahue* President and Director
Richard J. Thomas* Treasurer
(Principal Financial and
Accounting Officer)
William D. Dawson, III* Chief Investment Officer
Thomas G. Bigley* Director
Nicholas P. Constantakis* Director
John T. Conroy, Jr.* Director
William J. Copeland* Director
John F. Cunningham* Director
Lawrence D. Ellis, M.D.* Director
Peter E. Madden* Director
Charles F. Mansfield* Director
John E. Murray, Jr.* Director
Marjorie P. Smuts* Director
John S. Walsh* Director
* By Power of Attorney
Exhibit 23(j) under Form N-1A
Exhibit 23 under Item 601/Reg. S-K
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Shareholders of MONEY MARKET MANAGEMENT, INC.:
We consent to the use in Post-Effective Amendment No. 79 to Registration
Statement 811-2430 of Money Market Management, Inc. of our report dated February
12, 1999 appearing in the Prospectus, which is a part of such Registration
Statement, and to the reference to us under the heading "Financial Highlights"
in such Prospectus.
By: DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Boston, Massachusetts
February 25, 1999
Exhibit 23(p) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretaries of MONEY MARKET MANAGEMENT,
INC. and each of them, their true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for them and in their names,
place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/S/JOHN F. DONAHUE Chairman and Director February 4, 1999
- -----------------------------
John F. Donahue (Chief Executive Officer)
/S/J. CHRISTOPHER DONAHUE President and Director February 4, 1999
J. Christopher Donahue
/S/THOMAS G. BIGLEY Director February 4, 1999
Thomas G. Bigley
/S/NICHOLAS P. CONSTANTAKIS Director February 4, 1999
Nicholas P. Constantakis
/S/JOHN T. CONROY, JR. Director February 4, 1999
John T. Conroy, Jr.
SIGNATURES TITLE DATE
/S/WILLIAM J. COPELAND Director February 4, 1999
William J. Copeland
/S/LAWRECE D. ELLIS, M.D. Director February 4, 1999
Lawrence D. Ellis, M.D.
/S/PETER E. MADDEN Director February 4, 1999
Peter E. Madden
/S/JOHN E. MURRAY, JR. Director February 4, 1999
John E. Murray, Jr.
/S/MARJORIE P. SMUTS Director February 4, 1999
Marjorie P. Smuts
Sworn to and subscribed before me this 4 day of FEBRUARY , 1999
------ ------------
/S/CHERI S. GOOD
Cheri S. Good
Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001
Member, Pennsylvania Association of Notaries
Exhibit 23(p)(iii) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretaries of MONEY MARKET MANAGEMENT,
INC. and each of them, their true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for them and in their names,
place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/S/JOHN F. CUNNINGHAM Director February 4, 1999
John F. Cunningham
Sworn to and subscribed before me this 4 day of FEBRUARY, 1999
------ --------
/S/CHERI S. GOOD
Cheri S. Good
Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001
Member, Pennsylvania Association of Notaries
Exhibit 23(p)(iv) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretaries of MONEY MARKET MANAGEMENT,
INC. and each of them, their true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for them and in their names,
place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/S/CHARLES F. MANSFIELD, JR. Director February 4, 1999
- ----------------------------------------
Charles F. Mansfield, Jr.
Sworn to and subscribed before me this 4 day of FEBRUARY, 1999
----- --------
/S/CHERI S. GOOD
Cheri S. Good
Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001
Member, Pennsylvania Association of Notaries
Exhibit 23(p)(v) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretaries of MONEY MARKET MANAGEMENT,
INC. and each of them, their true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for them and in their names,
place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/S/JOHN S. WALSH Director February 4, 1999
John S. Walsh
Sworn to and subscribed before me this 4 day of FEBRUARY, 1999
----- --------
/S/CHERI S. GOOD
Cheri S. Good
Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001
Member, Pennsylvania Association of Notaries
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Money Market Management
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Dec-31-1998
<INVESTMENTS-AT-COST> 83,394,636
<INVESTMENTS-AT-VALUE> 83,394,636
<RECEIVABLES> 848,588
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84,243,224
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 783,244
<TOTAL-LIABILITIES> 783,244
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 83,459,980
<SHARES-COMMON-STOCK> 83,459,980
<SHARES-COMMON-PRIOR> 81,309,479
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 83,459,980
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,650,775
<OTHER-INCOME> 0
<EXPENSES-NET> (911,080)
<NET-INVESTMENT-INCOME> 3,739,695
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,739,695
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,739,695)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 130,155,078
<NUMBER-OF-SHARES-REDEEMED> (131,462,423)
<SHARES-REINVESTED> 3,457,846
<NET-CHANGE-IN-ASSETS> 2,150,501
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 413,312
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,060,959
<AVERAGE-NET-ASSETS> 82,449,082
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.050)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
