PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Money Market
Trust, which covers the six-month period ended January 31, 1996. The Report
begins with an Investment Review on the short-term market from the trust's
portfolio manager. Following the Investment Review, you will find the trust's
portfolio of investments and its financial statements.
In Money Market Trust, your ready cash is at work pursuing competitive daily
income along with the additional advantages of daily liquidity and stability of
principal.* At the end of the reporting period, approximately half of the
trust's portfolio was invested in high-quality commercial paper. The remainder
was invested in variable rate obligations and repurchase agreements.
Dividends paid to shareholders during the reporting period totaled $0.03 per
share. At the end of the reporting period, the trust's net assets stood at
$474.7 million.
Thank you for your confidence in the daily earning power of Money Market Trust.
We welcome your comments and suggestions.
Sincerely,
/s/ Glen R. Johnson
Glen R. Johnson
President
March 15, 1996
* 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. An investment in
the trust is neither insured nor guaranteed by the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Money Market Trust invests 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.
Interest rates held steady for the third quarter of 1995 before continuing to
decline modestly in the last several months of the year. The Federal Reserve
Board (the "Fed") took action again on December 19, 1995, and lowered the
Federal Funds target rate from 5.75% to 5.50%, precisely the level at which 1995
began. Finally, after market anticipation throughout January 1996, the Fed again
lowered the Federal Funds target rate by 25 basis points from 5.50% to 5.25% on
January 31, 1996.
The money market yield curve kept a consistent shape throughout the reporting
period. One-month commercial paper rates declined 39 basis points while six
month rates dropped 36 basis points, continuing a modestly inverted money market
yield curve.
The target average maturity range for the trust began the period at 35-45 days
but was subsequently lengthened to a 40-50 day range, reflecting the changing
economic and monetary sentiment. In structuring the trust, there is continued
emphasis placed on positioning 30%-35% of the trust's core assets in variable
rate demand notes and accomplishing a modest barbell structure.
During the six-months ended January 31, 1996, the net assets of the trust
decreased from $507.3 to $474.7 million, while the 7-day net yield decreased
from 5.56% to 5.20%.* The effective average maturity of the trust on January 31,
1996, was 43 days.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BANK NOTES--4.8%
----------------------------------------------------------------------------------
BANKING--4.8%
---------------------------------------------------------------
$10,000,000 Bank of New York, New York, 5.570%, 5/30/1996 $ 9,998,393
---------------------------------------------------------------
2,000,000 Comerica Bank, Detroit, MI, 5.700%, 9/3/1996 1,999,847
---------------------------------------------------------------
11,000,000 Mellon Bank NA, Pittsburgh, 5.750%-5.810%, 2/28/1996-10/16/1996 10,999,502
--------------------------------------------------------------- ------------
TOTAL BANK NOTES 22,997,742
--------------------------------------------------------------- ------------
(a)COMMERCIAL PAPER--54.8%
----------------------------------------------------------------------------------
FINANCE--COMMERCIAL--33.1%
---------------------------------------------------------------
23,415,000 Asset Securitization Cooperative Corp., 5.357%-5.757%,
2/2/1996-4/30/1996 23,236,055
---------------------------------------------------------------
25,000,000 CIESCO, Inc., 5.409%-5.820%, 2/8/1996-4/11/1996 24,888,672
---------------------------------------------------------------
22,000,000 CIT Group Holdings, Inc., 5.453%-5.780%, 2/2/1996-4/8/1996 21,886,263
---------------------------------------------------------------
8,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.397%-5.791%,
2/15/1996-5/10/1996 7,907,755
---------------------------------------------------------------
22,000,000 Falcon Asset Securitization Corp., 5.329%-5.741%,
2/8/1996-4/11/1996 21,820,284
---------------------------------------------------------------
26,000,000 General Electric Capital Corp., 5.327%-5.854%,
2/5/1996-7/9/1996 25,783,111
---------------------------------------------------------------
15,000,000 PREFCO-Preferred Receivables Funding Co., 5.235%, 7/25/1996 14,628,125
---------------------------------------------------------------
17,060,000 Sheffield Receivables Corp., 5.731%-5.744%, 2/16/1996-2/29/1996 17,005,392
--------------------------------------------------------------- ------------
Total 157,155,657
--------------------------------------------------------------- ------------
FINANCE--RETAIL--9.8%
---------------------------------------------------------------
8,000,000 Associates Corp. of North America, 5.321%-5.738%,
2/23/1996-9/24/1996 7,882,012
---------------------------------------------------------------
13,000,000 Ford Credit Receivables Funding, Inc., 5.494%-5.728%,
2/23/1996-4/1/1996 12,910,469
---------------------------------------------------------------
21,000,000 New Center Asset Trust, A1+/P1 Series, 5.351%-5.752%,
2/28/1996-4/22/1996 20,818,623
---------------------------------------------------------------
5,000,000 Norwest Financial, Inc., 5.314%, 9/17/1996 4,837,156
--------------------------------------------------------------- ------------
Total 46,448,260
--------------------------------------------------------------- ------------
</TABLE>
MONEY MARKET TRUST
------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
(a)COMMERCIAL PAPER--CONTINUED
- ----------------------------------------------------------------------------------
OIL & OIL FINANCE--9.2%
---------------------------------------------------------------
$24,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.),
5.338%-5.802%, 2/5/1996-7/1/1996 $ 23,762,173
---------------------------------------------------------------
20,000,000 Koch Industries, Inc., 5.951%, 2/1/1996 20,000,000
--------------------------------------------------------------- ------------
Total 43,762,173
--------------------------------------------------------------- ------------
PHARMACEUTICALS AND HEALTH CARE--1.1%
---------------------------------------------------------------
5,000,000 Lilly (Eli) & Co., 5.734%, 4/29/1996 4,931,922
--------------------------------------------------------------- ------------
TELECOMMUNICATIONS--1.6%
---------------------------------------------------------------
8,000,000 Ameritech Corp., 5.291%, 7/8/1996 7,819,178
--------------------------------------------------------------- ------------
TOTAL COMMERCIAL PAPER 260,117,190
--------------------------------------------------------------- ------------
CORPORATE NOTES--1.3%
- ----------------------------------------------------------------------------------
FOOD & BEVERAGE--1.3%
---------------------------------------------------------------
6,000,000 PepsiCo, Inc., 5.750%-5.830%, 8/27/1996-9/6/1996 6,000,454
--------------------------------------------------------------- ------------
TOTAL CORPORATE NOTES 6,000,454
--------------------------------------------------------------- ------------
(b)VARIABLE RATE OBLIGATIONS--28.2%
----------------------------------------------------------------------------------
BANKING-13.5%
---------------------------------------------------------------
21,615,000 Kenny, Donald R. and Cheryl A., (Huntington National Bank,
Columbus, OH LOC), 5.540%, 2/1/1996 21,615,000
---------------------------------------------------------------
4,900,000 Melberger, Clifford K. and Ruth B. (PNC Bank,
Northeast, PA LOC), 5.535%, 2/5/1996 4,900,000
---------------------------------------------------------------
5,000,000 (c) SMM Trust, Series 1995-B, 5.688%, 2/29/1996 5,000,000
---------------------------------------------------------------
8,000,000 (c) SMM Trust, Series 1995-I, 5.520%, 2/27/1996 7,999,249
---------------------------------------------------------------
5,000,000 (c) SMM Trust, Series 1995-L, 5.645%, 2/13/1996 4,999,449
---------------------------------------------------------------
6,850,000 Scranton Times, L.P., (PNC Bank, Northeast, PA LOC),
5.535%, 2/5/1996 6,850,000
---------------------------------------------------------------
</TABLE>
MONEY MARKET TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
(b)VARIABLE RATE OBLIGATIONS--CONTINUED
----------------------------------------------------------------------------------
BANKING--CONTINUED
---------------------------------------------------------------
$ 6,800,000 Shamrock Communications, (PNC Bank, Northeast, PA LOC), 5.535%,
2/5/1996 $ 6,800,000
---------------------------------------------------------------
5,990,000 Westminster Village Terre Haute, Inc. (Huntington National
Bank, Columbus, OH LOC), 5.540%, 2/1/1996 5,990,000
--------------------------------------------------------------- ------------
Total 64,153,698
--------------------------------------------------------------- ------------
ELECTRICAL EQUIPMENT--4.9%
---------------------------------------------------------------
4,733,263 Marta Leasing Ltd. (Guaranteed by General Electric Co.),
5.535%, 2/5/1996 4,733,263
---------------------------------------------------------------
18,209,791 Northwest Airlines, Inc. (Guaranteed by General Electric Co.),
5.561%, 2/5/1996 18,209,791
--------------------------------------------------------------- ------------
Total 22,943,054
--------------------------------------------------------------- ------------
FINANCE--COMMERCIAL--1.4%
---------------------------------------------------------------
6,600,000 Money Market Auto Loan Trust, (Guaranteed by Cap MAC), 5.825%,
2/15/1996 6,600,000
--------------------------------------------------------------- ------------
FINANCE--RETAIL--4.2%
---------------------------------------------------------------
20,000,000 Carco Auto Loan Master Trust, Series 1993-2 Class A1, 5.685%,
2/15/1996 20,000,000
--------------------------------------------------------------- ------------
INSURANCE--4.2%
---------------------------------------------------------------
20,000,000 (c) Peoples Security Life Insurance, 6.030%, 2/1/1996 20,000,000
--------------------------------------------------------------- ------------
TOTAL VARIABLE RATE OBLIGATIONS 133,696,752
--------------------------------------------------------------- ------------
</TABLE>
MONEY MARKET TRUST
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
(d)REPURCHASE AGREEMENTS--11.2%
- ----------------------------------------------------------------------------------
$16,300,000 First Union Capital Markets Corp., 5.900%, dated 1/31/1996,
due 2/1/1996 $ 16,300,000
---------------------------------------------------------------
22,000,000 PaineWebber, Inc., 5.930%, dated 1/31/1996, due 2/1/1996 22,000,000
---------------------------------------------------------------
15,000,000 Swiss Bank Corp., 5.900%, dated 1/31/1996, due 2/1/1996 15,000,000
--------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 53,300,000
--------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST(e) $476,112,138
--------------------------------------------------------------- ------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to $37,998,698 which represents 8.0% of net assets.
(d) The repurchase agreements are fully collateralized by U.S. government and
agency obligations based on market prices at the date of the portfolio.
investments in repurchase agreements are through participation in joint
accounts with other Federated funds.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($474,684,841) at January 31, 1996.
The following acronym 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, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in repurchase agreements $ 53,300,000
- -----------------------------------------------------------------
Investments in securities 422,812,138
- ----------------------------------------------------------------- ------------
Total investments in securities, at amortized cost and value $476,112,138
- --------------------------------------------------------------------------------
Income receivable 1,109,347
- --------------------------------------------------------------------------------
Receivable for shares sold 758
- -------------------------------------------------------------------------------- ------------
Total Assets 477,222,243
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable 2,208,089
- -----------------------------------------------------------------
Payable to Bank 250,824
- -----------------------------------------------------------------
Accrued expenses 78,489
- ----------------------------------------------------------------- ------------
Total Liabilities 2,537,402
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 474,684,841 shares outstanding $474,684,841
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($474,684,841 / 474,684,841 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, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $14,513,403
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 986,302
- ---------------------------------------------------------------------
Administrative personnel and services fee 186,580
- ---------------------------------------------------------------------
Custodian fees 46,849
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 17,068
- ---------------------------------------------------------------------
Director's/Trustees' fees 6,624
- ---------------------------------------------------------------------
Auditing fees 7,176
- ---------------------------------------------------------------------
Legal fees 4,600
- ---------------------------------------------------------------------
Portfolio accounting fees 46,850
- ---------------------------------------------------------------------
Shareholder services fee 616,439
- ---------------------------------------------------------------------
Share registration costs 10,304
- ---------------------------------------------------------------------
Printing and postage 5,520
- ---------------------------------------------------------------------
Insurance premiums 12,560
- ---------------------------------------------------------------------
Taxes 920
---------------------------------------------------------------------
Miscellaneous 2,576
--------------------------------------------------------------------- ----------
Total expenses 1,950,368
---------------------------------------------------------------------
Waivers--
---------------------------------------------------------------------
Waiver of investment advisory fee $(336,587)
---------------------------------------------------------
Waiver of shareholder services fee (493,151)
--------------------------------------------------------- ---------
Total waivers (829,738)
--------------------------------------------------------------------- ----------
Net expenses 1,120,630
----------------------------------------------------------------------------------- -----------
Net investment income $13,392,773
----------------------------------------------------------------------------------- -----------
</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
(UNAUDITED) YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995
----------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
--------------------------------------------------------
OPERATIONS--
--------------------------------------------------------
Net investment income $ 13,392,773 $ 29,417,799
-------------------------------------------------------- ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
--------------------------------------------------------
Distributions from net investment income (13,392,773) (29,417,799)
-------------------------------------------------------- ----------------- ---------------
SHARE TRANSACTIONS--
--------------------------------------------------------
Proceeds from sale of shares 1,209,255,536 2,689,667,535
--------------------------------------------------------
Net asset value of shares issued to shareholders in
payment
of distributions declared 1,989,512 4,510,492
--------------------------------------------------------
Cost of shares redeemed (1,243,831,902) (2,726,889,637)
-------------------------------------------------------- ----------------- ---------------
Change in net assets resulting from share
transactions (32,586,854) (32,711,610)
-------------------------------------------------------- ----------------- ---------------
Change in net assets (32,586,854) (32,711,610)
--------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------
Beginning of period 507,271,695 539,983,305
- -------------------------------------------------------- ----------------- ---------------
End of period $ 474,684,841 $ 507,271,695
- -------------------------------------------------------- ----------------- ---------------
</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
(UNAUDITED)
JANUARY YEAR ENDED JULY 31,
31, -------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
---------- ----- ----- ----- ----- ----- ----- ----- ----- ----
<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 0.03 0.05 0.03 0.03 0.04 0.07 0.08 0.09 0.07 0.06
- -------------
LESS
DISTRIBUTIONS
- -------------
Distributions
from net
investment
income (0.03) (0.05) (0.03) (0.03) (0.04) (0.07) (0.08) (0.09) (0.07)(0.06)
- ------------- ----- --- --- --- --- --- --- --- --- ---
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) 2.75% 5.42% 3.18% 3.00% 4.49% 7.05% 8.43% 8.93% 6.94% 5.98%
-------------
RATIOS TO
AVERAGE NET
ASSETS
-------------
Expenses 0.45%* 0.46% 0.46% 0.46% 0.46% 0.46% 0.46% 0.45% 0.45% 0.45%
-------------
Net
investment
income 5.43%* 5.32% 3.11% 2.98% 4.40% 6.88% 8.14% 8.58% 6.72% 5.80%
-------------
SUPPLEMENTAL
DATA
-------------
Net assets,
end of
period
(000
omitted) $474,685 $507,272 $539,983 $712,577 $943,893 $956,538 $1,189,023 $1,649,683 $1,685,914 $1,747,618
-------------
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (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.
INVESTMENT VALUATIONS--The Trust uses the amortized cost method to value
its portfolio securities 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
under repurchase agreement transactions. Additionally, procedures have
established by the Trust 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 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 and/or standards reviewed 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 income. Accordingly, no
provisions for federal tax are necessary.
MONEY MARKET TRUST
- --------------------------------------------------------------------------------
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.
RESTRICTED SECURITIES--Restricted securities are securities
that may only be resold upon registration under federal securities laws or
in transactions exempt from such registration. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. In some cases, the restricted securities may be resold without
registration upon exercise of a demand feature. Such restricted securities
may be determined to be liquid under criteria established by the Board of
Trustees. The Trust will not incur any registration costs upon such resales.
Restricted securities are valued at amortized cost in accordance with Rule
2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at January 31, 1996
is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------------ ----------- -----------
<S> <C> <C>
SMM Trust Series 1995-B 8/4/95 $5,000,000
SMM Trust Series 1995-I 5/26/95 7,999,249
SMM Trust Series 1995-L 8/4/95 4,999,449
Peoples Security Life Insurance 7/6/95 20,000,000
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, 1996, capital paid-in aggregated $474,684,841.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995
-------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Shares sold 1,209,255,536 2,689,667,535
--------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,989,512 4,510,492
--------------------------------------------------------
Shares redeemed (1,243,831,902) (2,726,889,637)
-------------------------------------------------------- ---------------- -------------
Net change resulting from share transactions (32,586,854) (32,711,610)
-------------------------------------------------------- ---------------- -------------
</TABLE>
MONEY MARKET TRUST
- --------------------------------------------------------------------------------
(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 0.40% 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 0.45% of average daily net assets of
the Trust.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to 0.25%
of average daily net assets of the Trust shares for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS 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
registered transfer and dividend disbursing agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and receives a
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting record
for which it receives a fee. The fee is based on the level of the Trust's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
<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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Peter E. Madden Executive Vice President
Gregor F. Meyer John W. McGonigle
John E. Murray, Jr. Executive Vice President and
Wesley W. Posvar Secretary
Marjorie P. Smuts Richard B. Fisher
Vice President
David M. Taylor
Treasurer
J. Crilley Kelly
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
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.
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
[LOGO]
Cusip 609900105
