Automated Government Money Trust
Prospectus
The shares of Automated Government Money Trust (the "Trust")
offered by this prospectus represent interests in an open-end,
diversified management investment company (a mutual fund),
investing in short-term U.S. Treasury securities to achieve
stability of principal and current income consistent with
stability of principal.
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. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. THE TRUST ATTEMPTS TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT THE
TRUST WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and
know before you invest in the Trust. Keep this prospectus for
future reference.
The Trust has also filed a Statement of Additional Information
dated September 30, ^1995, with the Securities and Exchange
Commission. The information contained in the Statement of
Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of
Additional Information, which is in paper form only, or a paper
copy of this prospectus, if you have received your prospectus
electronically, free of charge by calling 1-800-235-4669. To
obtain other information, or make inquiries about the Trust,
contact the Trust at the address listed in the back of this
prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, ^1995
Table of Contents will be
generated when document is
complete.
SUMMARY OF TRUST EXPENSES
FINANCIAL HIGHLIGHTS
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust
under a Declaration of Trust dated June 1, 1982. The Trust is
designed for investors as a convenient means of accumulating an
interest in a professionally managed, diversified portfolio
investing only in short-term U.S. Treasury securities. A minimum
initial investment of $25,000^ within a 90-day period is
required.
The Trust attempts to stabilize the value of a share at $1.00.
Shares are currently sold and redeemed at that price.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Trust is stability of principal
and current income consistent with stability of principal. This
investment objective cannot be changed without shareholder
approval. While there is no assurance that the Trust will
achieve its investment objective, it endeavors to do so by
following the investment policies described in this prospectus.
Unless indicated otherwize, The investment policies and
limitations described below cannot be changed by the Board of
Trustees without approval of shareholders.
INVESTMENT POLICIES
The Trust pursues its investment objective by investing only in
short-term U.S. Treasury securities maturing in one year or
less. As a matter of operating policy, which may be changed
without shareholder approval, the average maturity of the
securities in the Trust's portfolio, computed on a dollar-
weighted basis, will be 90 days or less. The Trust may attempt
to increase yield by trading portfolio instruments to take
advantage of short-term market variations.
Acceptable Investments. The Trust invests only in short-term
securities that are issued or guaranteed as to principal and
interest by the U.S. Treasury. These securities include such
instruments as (i) U.S. Treasury bills, notes and bonds and (ii)
instruments of the Export-Import Bank of the U.S., the General
Services Administrations, the Small Business Administration and
the Washington Metropolitan Area Transit Authority.
Repurchase Agreements. Certain securities in which the Trust
invests may be purchased pursuant to repurchase agreements which
provide for repurchase by the seller within one year from the
date of acquisition. Repurchase agreements are arrangements in
which banks, broker/dealers, and other recognized financial
institutions sell securities to the Trust and agree at the time
of sale to repurchase them at a mutually agreed upon time and
price. To the extent that the seller does not repurchase the
securities from the Trust, the Trust could receive less than the
repurchase price on any sale of such securities.
When-Issued and Delayed Delivery Transactions. The Trust may
purchase U. S. Treasury securities on a when-issued or delayed
delivery basis. These transactions are arrangements in which the
Trust purchases securities with payment and delivery scheduled
for a future time. The seller's failure to complete these
transactions may cause the Trust to miss a price or yield
considered to be advantageous. Settlement dates may be a month
or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase
prices. Accordingly, the Trust may pay more or less than the
market value of the securities on the settlement date.
The Trust may dispose of a commitment prior to settlement if the
adviser deems it appropriate to do so. In addition, the Trust
may enter into transactions to sell its purchase commitments to
third parties at current market values and simultaneously
acquire other commitments to purchase similar securities at
later dates. The Trust may realize short-term profits or losses
upon the sale of such commitments.
INVESTMENT LIMITATIONS
The Trust will not borrow money directly or through reverse
repurchase agreements (arrangements in which the Trust sells a
money market instrument for a percentage of its cash value with
an agreement to buy back on a set date) or pledge securities
except, under certain circumstances, the Trust may borrow up to
one-third of the value of its total assets and pledge up to 10%
of the value of those assets to secure such borrowings.
The above investment limitation cannot be changed without
shareholder approval. The following limitation, however, may be
changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in this
limitation becomes effective.
The Trust will not invest more than 10% of its net assets in
illiquid securities, including repurchase agreements providing
for settlement in more than seven days after notice.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that
are more restrictive than its fundamental investment
limitations, as set forth in this prospectus and its Statement
of Additional Information, in order to comply with applicable
laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as
amended. In particular, the Trust will comply with the various
requirements of Rule 2a-7, which regulates money market mutual
funds. The Trust will determine the effective maturity of its
investments according to Rule 2a-7. The Trust may change these
operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.
TRUST INFORMATION
MANAGEMENT OF THE TRUST
Board of Trustees. The Trust is managed by a Board of
Trustees. The Trustees are responsible for managing the Trust's
business affairs and for exercising all the Trust's powers
except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
Investment Adviser. Investment decisions for the Trust are made
by Federated Management, the Trust's investment adviser, subject
to direction by the Trustees. The adviser continually conducts
investment research and supervision for the Trust and is
responsible for the purchase and sale of portfolio instruments.
Advisory Fees. The adviser receives an annual investment
advisory fee equal to .50 of 1% of the Trust's average
daily net assets. The adviser has undertaken to reimburse
the Trust up to the amount of the advisory fee for
operating expenses in excess of limitations established by
certain states. The adviser also may voluntarily choose to
waive a portion of its fee or reimburse other expenses of
the Trust, but reserves the right to terminate such waiver
or reimbursement at any time at its sole discretion.
Adviser's Background. Federated Management, a Delaware
business trust, organized on April 11, 1989 is a registered
investment adviser under the Investment Advisers Act of
1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by
a trust, the trustees of which are John F. Donahue,
Chairman and Trustee of Federated Investors, Mr. Donahue's
wife, and Mr. Donahue's son, J. Christopher Donahue, who is
President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated
Investors serve as investment advisers to a number of
investment companies and private accounts. Certain other
subsidiaries also provide administrative services to a
number of investment companies. ^ With over $72 billion
invested across more than 260 funds under management ^
and/or administration by its subsidiaries, as of December
31, 1994, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the
management who founded the company in 1955. Federated
funds are presently at work in and through 4,000 financial
institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their
clients.
Both the Trust and the adviser have adopted strict codes of
ethics governing the conduct of all employees who manage the
Trust and its portfolio securities. These codes recognize that
such persons owe a fiduciary duty to the Trust's shareholders
and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes:
require preclearance and periodic reporting of personal
securities transactions; prohibit personal transactions in
securities being purchased or sold, or being considered for
purchase or sale, by the Trust; prohibit purchasing securities
in initial public offerings; and prohibit taking profits on
securities held for less than sixty days. Violations of the
codes are subject to review by the Trustees, and could result
in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for
shares of the Trust. It is a Pennsylvania corporation organized
on November 14, 1969, and is the principal distributor for a
number of investment companies. Federated Securities Corp. is a
subsidiary of Federated Investors.
State securities laws may require certain financial institutions
such as depository institutions to register as dealers.
Shareholder Services^. The Trust has ^ entered into a
Shareholder Services ^ Agreement with Federated Shareholder
Services, a subsidiary of Federated Investors, ^ under which the
Trust may make payments up to .25 of 1% of the average daily net
asset value of the Trust, computed at an annual rate, to ^
obtain personal services ^ for shareholders and provide
maintenance of shareholder accounts ^. From time to time and for
such periods as deemed appropriate, the amount stated above may
be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder
Services ^ will either perform shareholder services directly or
will select financial institutions to perform shareholder
services. Financial institutions will receive fees based upon
shares owned by their clients or customers ^. The schedules of
such fees and the basis upon which such fees will be paid will
be determined from time to time by the Trust and Federated
Shareholder Services.
ADMINISTRATION OF THE TRUST
Administrative Services. Federated Administrative Services, a
subsidiary of Federated Investors, provides administrative
personnel and services (including certain legal and ^financial
reporting services) necessary to operate the Trust. Federated
Administrative Services provides these at an annual rate as
specified below:
Maximum Fee Average Aggregate Daily Net Assets
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
Average aggregate daily net assets include those of all mutual
funds advised by affiliates of Federated Investors. Federated
Administrative Services may choose voluntarily to waive a
portion of its fee.
Custodian. State Street Bank and Trust Company, Boston, MA, is
custodian for the securities and cash of the Trust.
Transfer Agent and Dividend Disbursing Agent. Federated
Services Company, ^Boston, MA, is transfer agent for the shares
of, and dividend disbursing agent for, the Trust.
^
Independent Auditors. The independent auditors for the Trust
are Deloitte & Touche LLP, Pittsburgh, PA.
NET ASSET VALUE
The Trust attempts to stabilize the net asset value of its
shares at $1.00 by valuing the portfolio securities using the
amortized cost method. The net asset value per share is
determined by subtracting total liabilities from total assets
and dividing the remainder by the number of shares outstanding.
The Trust cannot guarantee that its net asset value will always
remain at $1.00 per share.
The net asset value is determined at 12:00p.m., ^ 3:00 p.m.
(Eastern time), and as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday
through Friday, except on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day.
INVESTING IN THE TRUST
SHARE PURCHASES
Shares are sold at their net asset value, without a sales
charge, next determined after an order is received, on days on
which the New York Stock Exchange and the Federal Reserve Wire
System are open for business. Shares may be purchased either by
wire or mail. The Trust reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated
Securities Corp. Information needed to establish the account
will be taken by telephone.
By Wire. To purchase by Federal Reserve wire, call the Trust
before 1:00 p.m. (Eastern time) to place an order. The order is
considered received immediately. Payment by federal funds must
be received before ^1:00 p.m. (Eastern time) that day. Federal
funds should be wired as follows: Federated Services Company,
c/o State Street Bank and Trust Company, Boston, ^MA; Attention:
EDGEWIRE; For Credit to: Automated Government Money Trust;
Fund Number (this number can be found on the account statement
or by contacting the Trust); Group Number or Order Number;
Nominee or Institution Name; and ABA Number 011000028.
By Mail. To purchase by mail, send a check made payable to
Automated Government Money Trust to: ^ Federated Services
Company, P.O. Box ^8600, Boston, MA 02266-^8600. Orders by mail
are considered received when payment by check is converted into
federal funds. This is normally the next business day after the
check is received.
Automatic Investments. Investors may establish accounts with
their financial institutions to have cash accumulations
automatically invested in the Trust. The investments may be
made on predetermined dates or when the investor's account
reaches a certain level. Participating financial institutions
are responsible for prompt transmission of orders relating to
the program, and they may charge for their services. Investors
should read this prospectus along with the financial
institution's agreement or literature describing these services
and fees.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. However, an account
may be opened with a smaller amount as long as the minimum is
reached within 90 days. Minimum investments will be calculated
by combining all accounts maintained with the Trust. Financial
institutions may impose different minimum investment
requirements on their customers.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master
accounts. However, certain financial institutions may wish to
use the transfer agent's subaccounting system to minimize their
internal recordkeeping requirements. The transfer agent charges
a fee based on the level of subaccounting services rendered.
Financial institutions 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 provided
which may be related to the ownership of Trust shares. This
prospectus should, therefore, be read together with any
agreement between the customer and the financial institution
with regard to the services provided, the fees charged for those
services, and any restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company
maintains a share account for each shareholder. Share
certificates are not issued unless requested by contacting the
Trust or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as
all purchases and redemptions as well as dividends paid during
the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically reinvested on payment dates in additional shares
of the Trust unless cash payments are requested by writing to
the Trust. Shares purchased by wire before 3:00 p.m. (Eastern
time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is
converted into federal funds.
CAPITAL GAINS
The Trust 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 Trust will
distribute in cash or additional shares any realized net long-
term capital gains at least once every 12 months.
REDEEMING SHARES
Shares are redeemed at their net asset value next determined
after ^Federated Services Company receives the redemption
request. Redemptions will be made on days on which the Trust
computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to:
Automated Government Money Trust, P.O. Box ^8600, Boston, MA
02266-^8600. The written request should state: Automated
Government Money Trust; shareholder's name; the account number;
and the share or dollar amount requested. Sign the request
exactly as the shares are registered. Shareholders should call
the Trust for assistance in redeeming by mail.
If share certificates have been issued, they must be properly
endorsed and should be sent by registered or overnight insured
mail with the written request to Federated Services Company, 500
Victory Road-2nd Floor, North Quincey, MA 02171.
Shareholders requesting a redemption ^ of any amount to be sent
to an address other than that on record with the Trust, or a
redemption payable other than to the shareholder of record must
have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by
the Bank Insurance Fund which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
- a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
- any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary
public.
The Trust and the transfer agent have adopted standards for
accepting signature guarantees from the above institutions. The
Trust may elect in the future to limit eligible signature
guarantors to institutions that are members of the signature
guarantee program. The Trust and its transfer agent reserve the
right to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business
day, but in no event more than seven days, after receipt of a
proper written redemption request. Dividends are paid up to and
including the day that a redemption request is processed.
By Writing a Check. At the shareholder's request, Federated
Services Company will establish a checking account for redeeming
shares. For further information, contact a representative of
Federated Securities Corp.
With this checking account, shares may be redeemed by writing a
check for $100 or more. The redemption will be made at the net
asset value on the date that the check is presented to the
Trust. A check may not be written to close an account. A
shareholder may obtain cash by negotiating the check through the
shareholder's local bank. Checks should never be made payable or
sent to ^Federated Services Company to redeem shares. Cancelled
checks are sent to the shareholder each month.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Trust. Telephone
instructions may be recorded and if reasonable procedures are
not followed by the Trust, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. An
authorization form permitting the Trust to accept telephone
requests must first be completed. Authorization forms and
information on this service are available from Federated
Securities Corp. The minimum amount for telephone redemption is
$1,000.
If the redemption request is received before ^3:00 p.m. (Eastern
time), the proceeds will be wired the same day to the
shareholder's account at a domestic commercial bank which is a
member of the Federal Reserve System, and those shares redeemed
will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is
received after ^3:00 p.m. (Eastern time). However, the proceeds
are not wired until the following business day. Under limited
circumstances, arrangements may be made with the distributor for
same-day payment of proceeds, without that day's dividend, for
redemption requests received before ^3:00 p.m. (Eastern time).
In the event of drastic economic or market changes, a
shareholder may experience difficulty in redeeming by telephone.
If such a case should occur, another method of redemption, such
as "By Mail", should be considered. If at any time the Trust
shall determine it necessary to terminate or modify this method
of redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances,
the Trust may redeem shares in any account and pay the proceeds
to the shareholder if the account balance falls below a required
minimum value of $25,000 due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder
is notified in writing and allowed 30 days to purchase
additional shares to meet the minimum requirement.
SHAREHOLDER INFORMATION
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in
Trustee elections and other matters submitted to shareholders
for vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder
approval will be sought only for certain changes in the Trust's
operation and for election of Trustees under certain
circumstances.
Trustees may be removed by the Trustees or by shareholders at a
special meeting. A special meeting of the Trust shall be called
by the Trustees upon the written request of shareholders owning
at least 10% of the Trust's outstanding shares.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally
liable as partners under Massachusetts law for obligations of
the Trust. To protect its shareholders, the Trust has filed
legal documents with Massachusetts that expressly disclaim the
liability of its shareholders for acts or obligations of the
Trust. These documents require notice of this disclaimer to be
given in each agreement, obligation, or instrument the Trust or
its Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable
for the Trust's obligations, the Trust is required by the
Declaration of Trust to use its property to protect or
compensate the shareholder. On request, the Trust will defend
any claim made and pay any judgment against a shareholder for
any act or obligation of the Trust. Therefore, financial loss
resulting from liability as a shareholder will occur only if the
Trust itself cannot meet its obligations to indemnify
shareholders and pay judgments against them.
TAX INFORMATION
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to
meet requirements of the Internal Revenue Code ^ applicable to
regulated investment companies and to receive the special tax
treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay
federal income tax on any dividends and other distributions
received. This applies whether dividends and distributions are
received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the
Trust:
the Trust is not subject to Pennsylvania corporate or personal
property taxes; and
Trust shares may be subject to personal property taxes imposed
by counties, municipalities, and school districts in
Pennsylvania to the extent that the portfolio securities in the
Trust would be subject to such taxes if owned directly by
residents of those jurisdictions.
Other State and Local Taxes. Shareholders are urged to consult
their own tax advisers regarding the status of their accounts
under state and local tax laws.
PERFORMANCE INFORMATION
From time to time, the Trust advertises its yield, ^ effective
yield, and tax-equivalent yield.
Yield represents the annualized rate of income earned on an
investment over a seven-day period. It is the annualized
dividends earned during the period on an investment shown as a
percentage of the investment. The effective yield is calculated
similarly to the yield, but when annualized, the income earned
by an investment is assumed to be reinvested daily. The
effective yield will be slightly higher than the yield because
of the compounding effect of this assumed reinvestment.
Advertisements and sales literature may also refer to total
return. Total return represents the change, over a specified
period of time, in the value of an investment in the Trust after
reinvesting all income distributions. It is calculated by
dividing that change by the initial investment and is expressed
as a percentage.
From time to time, ^ advertisements for the Trust may refer to
ratings, rankings, and other information in certain financial
publications and/or compare the Trust's performance to certain
indices.
ADDRESSES
Automated Government Money Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and Trust
Company- Boston P.O. Box 8600
Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Services Company
^P.O. Box 8600
^Boston, MA 02266-8600
^
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, PA 15222
