MONEY
MARKET
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1995
FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
609900105
8030103 (3/95)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Money Market
Trust
(the "Trust"), which covers the six-month period ended January 31, 1995. The
Report begins with our Investment Review, which is a brief commentary on the
short-term government market from the Trust's portfolio manager. Following the
Investment Review, you will find Financial Statements containing the Trust's
Portfolio of Investments.
The Trust is managed to pursue competitive daily income along with the
additional advantages of daily liquidity and stability of principal.* At the end
of the reporting period, the Trust's portfolio was invested primarily in
high-quality commercial paper, variable rate obligations, and repurchase
agreements.
At the end of the period, the Trust's net assets stood at $551.6 million.
Dividends paid to shareholders during the period totaled $13.4 million, or $0.02
per share.
Thank you for your confidence in Money Market Trust. We welcome your comments
and suggestions.
Sincerely,
Glen R. Johnson
President
March 15, 1995
* No money market fund can guarantee that a stable net asset value will be
maintained. An investment in the Trust is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
The Trust invests exclusively in money market instruments maturing in twelve
months or less. The average maturity of these securities, computed on a
dollar-weighted basis, is restricted to 90 days or less. Portfolio securities
must be rated in the highest short-term rating category by one or more of the
nationally recognized statistical rating organizations, or be of comparable
quality to securities having such ratings. Typical security types include, but
are not limited to, commercial paper, certificates of deposit, time deposits,
variable rate instruments and repurchase agreements.
During the reporting period, the Federal Reserve Board (the "Fed") continued its
restrictive interest rate stance. The Fed tightened monetary policy by
increasing the federal funds target rate from 4.25% to 5.50% over the period.
Despite the continued low inflationary environment, solid economic growth, and
increasing employment rolls, capacity constraints would appear to point toward
another increase to the targeted fed funds rate early in 1995.
The target average maturity range for the Trust has remained in its current
30-40 day range throughout the reporting period. This reflects management's
continuing bias that the money market yield curve is fairly steep, and value can
be obtained through both structure and by stepping out the curve a bit. In
structuring the Trust's portfolio, there is continued emphasis placed on
positioning 25-30% of the Trust's assets in variable rate demand notes and
accomplishing a modest barbell structure.
Being on the shorter end of the average maturity spectrum has proven to be
helpful over the reporting period. The Fed has twice raised short-term rates
since July 31, 1994. Despite the fact that both the Consumer Price Index and the
Producer's Price Index indicate moderate inflationary levels, the Fed continues
to fight "inflation expectations."
During the six months ended January 31, 1995, the net assets of Money Market
Trust increased from $539.9 to $551.6 million, while the 7-day yield increased
from 4.09% to 5.56%*. The effective average maturity of the Trust on January 31,
1995, was 30 days.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1995 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
*COMMERCIAL PAPER--39.5%
----------------------------------------------------------------------------------
DIVERSIFIED--3.6%
---------------------------------------------------------------
$20,000,000 Rockwell International Corp., 6.818%-6.871%, 6/5/1995-6/15/1995 $ 19,527,665
--------------------------------------------------------------- ------------
FINANCE--COMMERCIAL--16.7%
---------------------------------------------------------------
2,000,000 Asset Securitization Cooperative Corp., 5.639%, 2/13/1995 1,996,300
---------------------------------------------------------------
11,000,000 CIESCO, Inc., 6.133%-6.275%, 4/18/1995-5/17/1995 10,835,076
---------------------------------------------------------------
10,000,000 CIT Group Holdings, Inc., 6.31%, 3/20/1995 9,919,055
---------------------------------------------------------------
16,300,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.203%-6.093%,
3/3/1995-3/21/1995 16,208,132
---------------------------------------------------------------
10,000,000 Falcon Asset Securitization Corp., 6.253%, 3/13/1995 9,931,667
---------------------------------------------------------------
22,000,000 General Electric Capital Corp., 5.215%-6.72%,
2/8/1995-7/19/1995 21,650,578
---------------------------------------------------------------
12,000,000 PREFCO-Preferred Receivables Funding Co., 5.362%-6.299%,
3/9/1995-3/16/1995 11,925,460
---------------------------------------------------------------
10,000,000 Sheffield Receivables Corp., 6.253%-6.269%, 4/27/1995-5/2/1995 9,850,285
--------------------------------------------------------------- ------------
Total 92,316,553
--------------------------------------------------------------- ------------
FINANCE--RETAIL--10.4%
---------------------------------------------------------------
15,000,000 Associates Corp. of North America, 5.831%, 2/1/1995 15,000,000
---------------------------------------------------------------
19,000,000 Ford Credit Receivables Funding, Inc., 5.585%-6.206%,
2/2/1995-4/26/1995 18,833,294
---------------------------------------------------------------
24,000,000 New Center Asset Trust, A1+/P1 Series, 5.254%-6.823%,
2/14/1995-7/21/1995 23,550,343
--------------------------------------------------------------- ------------
Total 57,383,637
--------------------------------------------------------------- ------------
INSURANCE--6.3%
---------------------------------------------------------------
25,063,000 Prospect Street Senior Portfolio, L.P., (Guaranteed by
Financial Security Assurance, Inc.), 5.239%-6.877%,
2/14/1995-6/9/1995 24,763,864
---------------------------------------------------------------
10,000,000 Prudential Funding Corp., 6.03%, 5/11/1995 9,839,125
--------------------------------------------------------------- ------------
Total 34,602,989
--------------------------------------------------------------- ------------
TELECOMMUNICATIONS--1.8%
---------------------------------------------------------------
10,000,000 Ameritech Corp., 5.917%, 4/28/1995 9,862,639
--------------------------------------------------------------- ------------
</TABLE>
MONEY MARKET TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
*COMMERCIAL PAPER--CONTINUED
----------------------------------------------------------------------------------
TRANSPORTATION-0.7%
---------------------------------------------------------------
$ 4,000,000 Norfolk Southern Corp., 5.87%, 2/21/1995 $ 3,987,156
--------------------------------------------------------------- ------------
TOTAL COMMERCIAL PAPER 217,680,639
--------------------------------------------------------------- ------------
CORPORATE BONDS--0.9%
----------------------------------------------------------------------------------
BANKING-0.9%
---------------------------------------------------------------
5,000,000 (a) SMM Trust Series 1994-H, (Guaranteed by Morgan Guaranty
Trust Co., NY), 6.034%, 2/22/1995 4,998,931
--------------------------------------------------------------- ------------
VARIABLE RATE OBLIGATIONS--32%
----------------------------------------------------------------------------------
BANKING-13.8%
---------------------------------------------------------------
7,300,000 Hunt Club Apartments, Inc. (Huntington National Bank,
Columbus, OH LOC), 6.360%, 2/1/1995 7,300,000
---------------------------------------------------------------
22,205,000 Kenny, Donald R. and Cheryl A. (Huntington National Bank,
Columbus, OH LOC), 6.360%, 2/2/1995 22,205,000
---------------------------------------------------------------
5,200,000 Melberger, Clifford K. and Ruth B. (PNC Bank,
Northeast, PA LOC), 6.304%, 2/6/1995 5,200,000
---------------------------------------------------------------
19,000,000 (a) SMM Trust 1994-B (Guaranteed by Morgan Guaranty
Trust Co., NY), 5.892%, 2/11/1995 18,994,310
---------------------------------------------------------------
7,800,000 Shamrock Communications (PNC Bank, Northeast, PA LOC), 6.304%,
2/6/1995 7,800,000
---------------------------------------------------------------
8,400,000 The Scranton Times (PNC Bank, Northeast, PA LOC),
6.304%, 2/6/1995 8,400,000
---------------------------------------------------------------
</TABLE>
MONEY MARKET TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
VARIABLE RATE OBLIGATIONS--CONTINUED
----------------------------------------------------------------------------------
$ 5,990,000 Westminster Village Terre Haute, Inc. (Huntington National
Bank, Columbus, OH LOC), 6.360%, 2/2/1995 $ 5,990,000
--------------------------------------------------------------- ------------
Total 75,889,310
--------------------------------------------------------------- ------------
ELECTRICAL EQUIPMENT-4.2%
---------------------------------------------------------------
5,215,354 Marta Leasing Ltd. (Guaranteed by General Electric Co.),
6.304%, 2/6/1995 5,215,354
---------------------------------------------------------------
23,210,903 Northwest Airlines, Inc. (Guaranteed by General Electric Co.),
6.337%, 2/6/1995 23,210,903
--------------------------------------------------------------- ------------
FINANCE-AUTOMOTIVE-8.5%
---------------------------------------------------------------
25,000,000 Carco Auto Loan Master Trust, Series 1993-2, 5.791%, 2/15/1995 25,000,000
---------------------------------------------------------------
22,000,000 Money Market Auto Loan Trust, 5.896%, 2/15/1995 22,000,000
--------------------------------------------------------------- ------------
Total 47,000,000
--------------------------------------------------------------- ------------
INSURANCE-4.5%
---------------------------------------------------------------
25,000,000 (a) Peoples Security Life Insurance, 6.290%, 2/1/1995 25,000,000
--------------------------------------------------------------- ------------
TOTAL VARIABLE RATE OBLIGATIONS 176,315,567
--------------------------------------------------------------- ------------
***REPURCHASE AGREEMENTS--27.6%
----------------------------------------------------------------------------------
25,000,000 Chase Securities, Inc., 5.80%, dated 1/31/1995, due 2/1/1995 25,000,000
---------------------------------------------------------------
10,100,000 Chemical Banking Corp., 5.82%, dated 1/31/1995, due 2/1/1995 10,100,000
---------------------------------------------------------------
14,822,000 Fuji Government Securities, Inc., 5.82%, dated 1/31/1995,
due 2/1/1995 14,822,000
---------------------------------------------------------------
19,700,000 Lehman Government Securities, Inc., 5.83%, dated 1/31/1995,
due 2/1/1995 19,700,000
---------------------------------------------------------------
15,000,000 Nationsbank of North Carolina N.A., 5.82%, dated 1/31/1995,
due 2/1/1995 15,000,000
---------------------------------------------------------------
14,000,000 PaineWebber Group, Inc., 5.87%, dated 1/31/1995, due 2/1/1995 14,000,000
---------------------------------------------------------------
3,800,000 State Street Bank and Trust Co., Boston, MA, 5.82%,
dated 1/31/1995, due 2/1/1995 3,800,000
---------------------------------------------------------------
</TABLE>
MONEY MARKET TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
***REPURCHASE AGREEMENTS--CONTINUED
----------------------------------------------------------------------------------
$50,000,000 Warburg Securities, 5.82%, dated 1/31/1995, due 2/1/1995 $ 50,000,000
--------------------------------------------------------------- ------------
Total 152,422,000
--------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS, AT AMORTIZED COST 152,422,000
--------------------------------------------------------------- ------------
TOTAL INVESTMENTS $551,417,137+
--------------------------------------------------------------- ------------
</TABLE>
+ Also represents cost for federal tax purposes.
* Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
** Current rate and next reset date shown.
*** Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations. The investments in repurchase agreements are through
participation in joint accounts with other Federated funds.
(a) Restricted Securities
Note: The categories of investments are shown as a percentage of net assets
($551,647,182) at January 31, 1995.
The following abbreviation is used throughout this portfolio:
LOC--Letter of Credit
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1995 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
--------------------------------------------------------------------------------
Investments in repurchase agreements $152,422,000
-----------------------------------------------------------------
Investments in securities 398,995,137
----------------------------------------------------------------- ------------
Total Investments, at amortized cost and value $551,417,137
--------------------------------------------------------------------------------
Cash 3,847,341
--------------------------------------------------------------------------------
Income receivable 973,635
--------------------------------------------------------------------------------
Receivable for shares sold 9,907,389
-------------------------------------------------------------------------------- ------------
Total Assets 566,145,502
--------------------------------------------------------------------------------
LIABILITIES:
--------------------------------------------------------------------------------
Payable for shares redeemed $ 12,267,144
-----------------------------------------------------------------
Income distribution payable 2,136,437
-----------------------------------------------------------------
Accrued expenses 94,739
----------------------------------------------------------------- ------------
Total Liabilities 14,498,320
-------------------------------------------------------------------------------- ------------
NET ASSETS for 551,647,182 shares outstanding $551,647,182
-------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share: Net Asset
Value Per Share ($551,647,182 / 551,647,182 shares outstanding) $1.00
-------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1995 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------
Interest income $14,663,473
---------------------------------------------------------------------------------
EXPENSES:
---------------------------------------------------------------------------------
Investment advisory fee $1,100,705
--------------------------------------------------------------------
Administrative personnel and services fee 208,308
--------------------------------------------------------------------
Custodian fees 99,346
--------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 14,762
--------------------------------------------------------------------
Trustees fees 9,640
--------------------------------------------------------------------
Auditing fees 8,254
--------------------------------------------------------------------
Legal fees 9,899
--------------------------------------------------------------------
Portfolio accounting fees 46,773
--------------------------------------------------------------------
Shareholder services fee 137,589
--------------------------------------------------------------------
Share registration costs 15,456
--------------------------------------------------------------------
Printing and postage 5,503
--------------------------------------------------------------------
Insurance premiums 9,423
--------------------------------------------------------------------
Taxes 2,208
--------------------------------------------------------------------
Miscellaneous 6,140
-------------------------------------------------------------------- ----------
Total expenses 1,674,006
--------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 417,020
-------------------------------------------------------------------- ----------
Net expenses 1,256,986
--------------------------------------------------------------------------------- -----------
Net investment income $13,406,487
--------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JANUARY 31, 1995 YEAR ENDED
(UNAUDITED) JULY 31, 1994
----------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
--------------------------------------------------------
OPERATIONS--
--------------------------------------------------------
Net investment income $ 13,406,487 $ 19,609,778
--------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS--
--------------------------------------------------------
Distributions from net investment income (13,406,487) (19,609,778)
-------------------------------------------------------- ----------------- ---------------
SHARE TRANSACTIONS--
--------------------------------------------------------
Proceeds from sale of shares 1,365,884,884 3,027,736,629
--------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 2,155,980 3,874,627
--------------------------------------------------------
Cost of shares redeemed (1,356,376,987) (3,204,204,720)
-------------------------------------------------------- ----------------- ---------------
Change in net assets resulting from share
transactions 11,663,877 (172,593,464)
-------------------------------------------------------- ----------------- ---------------
Change in net assets 11,663,877 (172,593,464)
--------------------------------------------------------
NET ASSETS:
--------------------------------------------------------
Beginning of period 539,983,305 712,576,769
-------------------------------------------------------- ----------------- ---------------
End of period $ 551,647,182 $ 539,983,305
-------------------------------------------------------- ----------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY
31, PERIOD ENDED JULY 31,
1995 --------------------------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988 1987 1986
---------- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING OF
PERIOD $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------------
INCOME FROM
INVESTMENT
OPERATIONS
-------------
Net
investment
income 0.02 0.03 0.03 0.04 0.07 0.08 0.09 0.07 0.06 0.07
------------- ----- --- --- --- --- --- --- --- --- ---
LESS
DISTRIBUTIONS
-------------
Distributions
from net
investment
income 0.02 0.03 0.03 0.04 0.07 0.08 0.09 0.07 0.06 0.07
------------- ----- --- --- --- --- --- --- --- --- ---
NET ASSET
VALUE, END
OF PERIOD $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------------- ----- --- --- --- --- --- --- --- --- ---
TOTAL RETURN
(A) 2.47% 3.18% 3.00% 4.49% 7.05% 8.43% 8.93% 6.94% 5.98% 7.42%
-------------
RATIOS TO
AVERAGE NET
ASSETS
-------------
Expenses 0.46%(b) 0.46% 0.46% 0.46% 0.46% 0.46% 0.45% 0.45% 0.45% 0.45%
-------------
Net
investment
income 4.87%(b) 3.11% 2.98% 4.40% 6.88% 8.14% 8.58% 6.72% 5.80% 7.17%
-------------
SUPPLEMENTAL
DATA
-------------
Net assets,
end of
period
(000
omitted) $551,647 $539,983 $712,577 $943,893 $956,538 $1,189,023 $1,649,683 $1,685,914 $1,747,618 $1,904,972
-------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1995 (UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as a diversified, open-end management
investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
INVESTMENT VALUATIONS--The Trust's use of 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 Trust 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
in support of repurchase agreement investments. Additionally, procedures have been
established by the Trust to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure that the value of collateral at
least equals the principal amount of the repurchase agreement, including accrued
interest.
The Trust will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Trust's adviser
to be creditworthy pursuant to the guidelines established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Trust 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 Trust'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 taxable income. Accordingly, no provisions for federal tax are
necessary.
</TABLE>
MONEY MARKET TRUST
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in when-issued or
delayed delivery transactions. The Trust 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.
OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
At January 31, 1995, capital paid-in aggregated $551,647,182.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JANUARY 31, 1995 JULY 31, 1994
-------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Shares sold 1,365,884,884 3,027,736,629
--------------------------------------------------------
Shares issued to shareholders in payment of dividends
declared 2,155,980 3,874,627
--------------------------------------------------------
Shares redeemed (1,356,376,987) (3,204,204,720)
-------------------------------------------------------- ---------------- -------------
Net change resulting from share transactions 11,663,877 (172,593,464 )
-------------------------------------------------------- ---------------- -------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Research, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40 of 1% of the Trust's average daily net assets.
The Adviser will waive, to the extent of its advisory fee, the amount, if any,
by which the Trust's aggregate annual operating expenses exceed .45 of 1% of
average daily net assets of the Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with administrative personnel and services. The FAS fee is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholders Services ("FSS"), the Trust will pay FSS up to .25
of 1% of average net assets of the Trust
MONEY MARKET TRUST
--------------------------------------------------------------------------------
for the period. This fee is to obtain certain personal services for shareholders
and to maintain the shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Trust. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting records
for which it receives a fee. The fee is based on the level of the Trust's
average net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--State Street Bank and Trust is the Trust's custodian for which
it receives a fee. The fee is based on the level of the Trust's average net
assets for the period plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Trustees of the above companies.
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions exempt
from such registration. In some cases, the issuer of restricted securities has
agreed to register such securities for resale, at the issuer's expense, either
upon demand by the Trust or in connection with another registered offering of
the securities. Such restricted securities may be determined to be liquid under
criteria established by the Trustees. The Trust will not incur any registration
costs upon such resales. The Trust's restricted securities are valued at the
price provided by dealers in the secondary market or, if no market prices are
available, at the fair value as determined by the Trust's pricing committee.
Additional information on each restricted security held at January 31, 1995 is
as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
-------------------------------- ------------ -----------
<S> <C> <C>
SMM Trust Series 1994-B 9/7/94 $18,995,501
SMM Trust Series 1994-H 12/29/94 4,997,200
Peoples Security Life Insurance 7/11/94 25,000,000
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
-----------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
David M. Taylor
Assistant Treasurer
Mark A. Sheehan
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Trust's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
