AUTOMATED
GOVERNMENT
MONEY
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1994
(LOGO)
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
8022501 (3/94)
President's Message
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Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for Automated
Government Money Trust (the "Trust") for the six-month period ended January 31,
1994. 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.
On behalf of investors, the Trust continues to pursue current income, a high
level of liquidity, and a stable net asset value of $1.00.* As you will see in
the Portfolio of Investments, it continues to invest primarily in repurchase
agreements backed by Treasury obligations because of their yield advantage. The
remainder of the portfolio is invested in Treasury obligations.
Quality continues to be a hallmark of the Trust, which is rated AAAm by Standard
& Poor's Corporation and Aaa by Moody's Investors Service--the highest ratings
possible for a money market mutual fund.**
During the six-month reporting period, dividends paid to shareholders totaled
$41.9 million. At the end of the period, net assets stood at $3.1 billion.
Thank you for your confidence in the Trust. As always, we welcome your
questions, comments, or suggestions.
Sincerely,
Glen R. Johnson
President
March 15, 1994
* While no money market mutual fund can quarantee that a stable net asset value
will be maintained, Automated Government Money Trust has done so since its
inception.
** Ratings are subject to change.
Investment Review
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Automated Government Money Trust, which is rated AAAm by Standard & Poor's
Corporation and Aaa by Moody's Investors Service, Inc., is invested in direct
obligations of the U.S. Treasury, either in the form of notes and bills or as
collateral for repurchase agreements. The Trust's Treasury bill position has
increased due to a narrowing of the yield spread that notes typically offer
relative to bills. Recently, the Trust has been managed with an average maturity
of 45-55 days.
During the semi-annual reporting period, the Federal Reserve (the "Fed")
continued to target a Federal funds rate of 3%. With the Fed on hold, movements
in short rates over the period were driven by market sentiment. Short rates
declined through late September, as inflationary worries subsided in the face of
weaker economic growth and favorable reports on consumer and producer prices.
Confronted with strong fourth quarter economic growth, short rates climbed
higher through November, on speculation that the Fed might be moved to tighten
monetary policy in the first half of 1994 if the growth proved to be
sustainable. Rates then drifted lower through the end of the reporting period. A
comparison of six-month Treasury bill rates during the same time frame showed a
decline from 3.33% to 3.11% in late September, followed by a rise to 3.40% at
the end of November and then a decline to 3.24% by the end of January, 1994. As
a yield advantage continued to exist for investments in repurchase agreements
versus direct investments in short-term Treasury securities, a substantial
percentage of the Trust's investments remained in repurchase agreements. The
Trust maintained a barbelled portfolio structure of a significant position in
overnight repurchase agreements combined with securities with longer maturities
of six to twelve months.
Shortly after the end of the reporting period, on February 4, 1994, the Fed
surprised the market by tightening monetary policy and moving the target rate
for Federal funds from 3% to 3.25%, in the first change in stance by the Fed
since September, 1992. In an unusual move, Chairman Greenspan announced the
action, rather than let the market discern it in the traditional method through
interpretation of the Fed's open market operations. Recent comments by Fed
officials have indicated an uneasiness with what they perceive to be the still
accomodative nature of its monetary policy, and market expectations are for
another tightening by the Fed. The Trust's average maturity has been drifting
shorter to reflect the uncertainty in Fed policy and specific relative yield
opportunities available in the current market environment. However, changing
economic and market developments are continuously monitored to best serve our
clients attracted to the short-term U.S. government market.
Automated Government Money Trust
Portfolio of Investments
January 31, 1994
(unaudited)
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<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- --------------- ----------------------------------------------------------------------------- -----------------
Short-Term U.S. Treasury Obligations--37.1%
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**U.S. Treasury Bills--15.8%
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$ 501,500,000 3.125%-3.52%, 3/10/94-8/4/94 $ 495,639,169
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U.S. Treasury Notes--21.3%
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659,000,000 4.25%-9.50%, 2/15/94-9/30/94 665,277,945
----------------------------------------------------------------------------- -----------------
Total Short-Term U.S. Treasury Obligations 1,160,917,114
----------------------------------------------------------------------------- -----------------
***Repurchase Agreements--63.4%
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50,000,000 Bank of Tokyo, Ltd., 3.20%, dated 1/31/94, due 2/1/94 50,000,000
-----------------------------------------------------------------------------
110,000,000 BZW Securities, Inc., 3.17%, dated 1/31/94, due 2/1/94 110,000,000
-----------------------------------------------------------------------------
125,000,000 Bear, Stearns & Co., Inc., 3.17%, dated 1/31/94, due 2/1/94 125,000,000
-----------------------------------------------------------------------------
200,000,000 BT Securities Corp., 3.18%, dated 1/31/94, due 2/1/94 200,000,000
-----------------------------------------------------------------------------
135,000,000 Daiwa Securities America, Inc., 3.17%, dated 1/31/94,
due 2/1/94 135,000,000
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150,000,000 Donaldson, Lufkin & Jenrette Securities Corp., 3.18%,
dated 1/31/94, due 2/1/94 150,000,000
-----------------------------------------------------------------------------
135,000,000 Fuji Securities, Inc., 3.17%, dated 1/31/94, due 2/1/94 135,000,000
-----------------------------------------------------------------------------
50,000,000 Goldman, Sachs & Co., 3.20%, dated 1/31/94, due 2/1/94 50,000,000
-----------------------------------------------------------------------------
155,000,000 Greenwich Capital Markets, Inc., 3.20%, dated 1/31/94,
due 2/1/94 155,000,000
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71,600,000 J.P. Morgan Securities, Inc., 3.19%, dated 1/31/94,
due 2/1/94 71,600,000
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55,000,000 Kidder, Peabody & Co., Inc., 3.17%, dated 1/31/94,
due 2/1/94 55,000,000
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130,000,000 Kidder, Peabody & Co., Inc., 3.20%, dated 1/31/94,
due 2/1/94 130,000,000
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65,000,000 *Morgan Stanley & Co., Inc., 3.11%, dated 1/4/94,
due 2/3/94 65,000,000
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150,000,000 Nations Bank Corp., 3.17%, dated 1/31/94, due
2/1/94 150,000,000
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60,000,000 Nikko Securities Co. International, Inc., 3.18%,
dated 1/31/94, due 2/1/94 60,000,000
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100,000,000 Sanwa--BGK Securities Co., L.P., 3.17%, dated 1/31/94,
due 2/1/94 100,000,000
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100,000,000 UBS Securities, Inc., 3.18%, dated 1/31/94, due 2/1/94 100,000,000
-----------------------------------------------------------------------------
63,000,000 * Goldman, Sachs & Co., 3.12%, dated 1/10/94, due 3/14/94 63,000,000
-----------------------------------------------------------------------------
20,000,000 * J.P. Morgan Securities, Inc., 3.18%, dated 1/10/94,
due 4/11/94 20,000,000
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58,000,000 * Morgan Stanley & Co., Inc., 3.06%, dated 1/24/94,
due 2/23/94 58,000,000
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Total Repurchase Agreements (Note 2B) 1,982,600,000
----------------------------------------------------------------------------- -----------------
Total Investments, at amortized cost $ 3,143,517,114\
----------------------------------------------------------------------------- -----------------
</TABLE>
\ Also represents cost for federal tax purposes.
* Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days.
** Reflects rate of discount at time of purchase.
*** Repurchase agreements are fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio. The investments in
repurchase agreements are through participation in joint accounts with other
Federated funds.
Note: The categories of investments are shown as a percentage of net assets
($3,128,261,821) at January 31, 1994.
(See Notes which are an integral part of the Financial Statements)
Automated Government Money Trust
Statement of Assets and Liabilities
January 31, 1994
(unaudited)
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<TABLE>
<S> <C> <C>
Assets:
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Investments in repurchase agreements (Note 2B) $ 1,982,600,000
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Investments in other securities 1,160,917,114
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Total investments, at amortized cost and value (Note 2A) $ 3,143,517,114
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Cash 115,388
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Interest receivable 13,883,494
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Receivable for Trust shares sold 304,042
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Prepaid Expenses 72,551
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Total assets 3,157,892,589
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Liabilities:
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Payable for investments purchased 24,600,611
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Dividends payable 4,909,002
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Payable for Trust shares redeemed 121,155
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Total liabilities 29,630,768
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Net Assets for 3,128,261,821 shares of beneficial interest outstanding $ 3,128,261,821
- ---------------------------------------------------------------------------------------------- -----------------
Net Asset Value, Offering Price, and Redemption Price Per Share
($3,128,261,821 / 3,128,261,821 shares of beneficial interest outstanding) $1.00
- ---------------------------------------------------------------------------------------------- -----------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
Automated Government Money Trust
Statement of Operations
Six Months Ended January 31, 1994
(unaudited)
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<TABLE>
<S> <C> <C>
Investment Income:
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Interest income (Note 2C) $ 50,713,523
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Expenses:
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Investment advisory fee (Note 5) $ 7,929,250
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Trustees' fees 15,000
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Administrative personnel and services (Note 5) 644,608
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Custodian and recordkeeping fees 78,488
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Transfer and dividend disbursing agent fees and expenses 17,623
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Trust share registration costs 10,621
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Auditing fees 8,300
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Legal fees 22,300
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Printing and postage 4,000
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Insurance premiums 19,195
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Taxes 4,836
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Miscellaneous 11,894
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Total expenses 8,766,115
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Net investment income $ 41,947,408
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</TABLE>
(See Notes which are an integral part of the Financial Statements)
Automated Government Money Trust
Statement of Changes in Net Assets
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<TABLE>
<CAPTION>
Year Ended July 31,
<S> <C> <C>
1994* 1993
Increase (Decrease) in Net Assets:
- ----------------------------------------------------------------------
Operations--
- ----------------------------------------------------------------------
Net investment income $ 41,947,408 $ 95,575,611
- ---------------------------------------------------------------------- -------------------- --------------------
Distributions to Shareholders (Note 3)--
- ----------------------------------------------------------------------
Dividends to shareholders from net investment income (41,947,408) (95,575,611)
- ---------------------------------------------------------------------- -------------------- --------------------
Trust Share (Principal) Transactions (Note 4)--
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Net proceeds from sale of shares 11,529,643,464 19,248,350,900
- ----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 13,833,259 32,924,624
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Cost of shares redeemed (11,530,987,210) (19,343,198,321)
- ---------------------------------------------------------------------- -------------------- --------------------
Change in net assets from Trust share transactions 12,489,513 (61,922,797)
- ---------------------------------------------------------------------- -------------------- --------------------
Change in net assets 12,489,513 (61,922,797)
- ----------------------------------------------------------------------
Net Assets:
- ----------------------------------------------------------------------
Beginning of period 3,115,772,308 3,177,695,105
- ---------------------------------------------------------------------- -------------------- --------------------
End of period $ 3,128,261,821 $ 3,115,772,308
- ---------------------------------------------------------------------- -------------------- --------------------
* Six months ended January 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
</TABLE>
Automated Government Money Trust
Financial Highlights
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(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994* 1993 1992 1991 1990 1989 1988 1987 1986 1985
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 0.01 0.03 0.04 0.07 0.08 0.08 0.06 0.06 0.07 0.09
- ------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Less distributions
- -------------------
Dividends to
shareholders from
net investment
income (0.01) (0.03) (0.04) (0.07) (0.08) (0.08) (0.06) (0.06) (0.07) (0.09)
- ------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
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** 1.34% 2.79% 4.26% 6.77% 8.21% 8.58% 6.55% 5.73% 7.11% 9.05%
- -------------------
Ratios to average
net assets
- -------------------
Expenses 0.55%(a) 0.55% 0.57% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
- -------------------
Net investment
income 2.65%(a) 2.75% 4.17% 6.55% 7.92% 8.30% 6.39% 5.59% 6.86% 8.51%
- -------------------
Supplemental Data
- -------------------
Expense waiver/
reimbursement (b) -- 0.01% 0.01% 0.03% 0.03% 0.04% 0.03% 0.02% 0.03% 0.03%
- -------------------
Net assets, end of
period (000
omitted)
$3,128,262 $3,115,772 $3,177,695 $2,829,602 $2,596,695 $2,791,097 $2,388,700 $1,536,578 $1,782,895 $1,302,766
- -------------------
</TABLE>
* Six months ended January 31, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 5).
(See Notes which are an integral part of the Financial Statements.)
Automated Government Money Trust
Notes to Financial Statements
January 31, 1994
(unaudited)
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(1) Organization
The Trust is registered under the Investment Company Act of 1940, as amended, 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. The
policies are in conformity with generally accepted accounting principles.
A. Investment Valuations--The Board of Trustees ("Trustees") has determined
that the best method currently available for valuing portfolio securities
is amortized cost. The Trust's use of the amortized cost method to value
its portfolio securities is conditioned on its compliance with Rule 2a-7
under the Investment Company Act of 1940, as amended.
B. 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 securities to ensure the existence
of a proper level of collateral. Accordingly, the Trust could receive less
than the repurchase price on the sale of collateral securities.
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 guidelines
established by the Trustees. Risks may arise from the potential inability
of counterparties to honor the terms of the repurchase agreement.
C. Income--Interest income is recorded on the accrual basis. Interest income
includes interest and discount earned (net of premium), including original
issue discount as required by the Internal Revenue Code, as amended, plus
realized net gains, if any, on portfolio securities.
D. Federal Taxes--It is the Trust's policy to comply with the provisions of
the Internal Revenue Code, as amended, applicable to regulated investment
companies and to distribute to shareholders each year all of its taxable
income. Accordingly, no provisions for federal tax are necessary.
E. When-Issued or Delayed Delivery Transactions--The Trust may engage in
when-issued or delayed delivery transactions. To the extent the Trust
engages in such transactions, it will do so for the purpose of acquiring
portfolio securities consistent with its investment objective and policies
and not for the purpose of investment leverage. The Trust will record a
when-issued security and the related liability on the trade date. Until the
securities are received and paid for, the Trust will
maintain 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.
F. Other--Investment transactions are accounted for on the date of the
transaction.
(3) Dividends
The Trust computes its net income daily, and immediately prior to the
calculation of its net asset value at the close of business, declares and
records dividends to shareholders of record at the time of the previous
computation of the Trust's net asset value. Payment of dividends is made monthly
in cash, or in additional shares at the net asset value on the payable date.
(4) 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, 1994, capital paid in aggregated $3,128,261,821. Transactions in
Trust shares were as follows:
<TABLE>
<CAPTION>
Year Ended July 31,
<S> <C> <C>
1994* 1993
- ------------------------------------------------------------------------- ------------------ ------------------
Shares outstanding, beginning of period 3,115,772,308 3,177,695,105
- -------------------------------------------------------------------------
Shares sold 11,529,643,464 19,248,350,900
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 13,833,259 32,924,624
- -------------------------------------------------------------------------
Shares redeemed (11,530,987,210) (19,343,198,321)
- ------------------------------------------------------------------------- ------------------ ------------------
Shares outstanding, end of period 3,128,261,821 3,115,772,308
- ------------------------------------------------------------------------- ------------------ ------------------
</TABLE>
* Six months ended January 31, 1994.
(5) Investment Advisory Fee and Other Transactions with Affiliates
Federated Management, the Trust's investment adviser ("Adviser"), receives for
its services an annual investment advisory fee equal to 0.50 of 1% of the
Trust's average daily net assets.
Administrative personnel and services were provided at approximate cost by
Federated Administrative Services, Inc. Effective March 1, 1994, Federated
Administrative Services ("FAS") will provide administrative personnel and
services at an annual rate of 0.15 of 1% on the first $250 million of average
aggregate net assets of the total Federated Funds; 0.125 of 1% on the next $250
million; 0.10 of 1% on the next $250 million; and 0.075 of 1% on average
aggregate net assets in excess of $750 million. 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. Certain of the Officers and Trustees of the
Trust are Officers and Directors of the above corporations.
Trustees Officers
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
Wesley W. Posvar Edward C. Gonzales
Marjorie P. Smuts Vice President and Treasurer
John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
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.
