PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I'm pleased to present the Semi-Annual Report to Shareholders for Federated High
Yield Trust. The Report covers the six-month period ended August 31, 1995, and
includes the Investment Review, Portfolio of Investments, and Financial
Statements.
This mutual fund pursues the significant opportunities available in the
lower-grade corporate bond market through a carefully researched, highly
diversified portfolio that spans virtually the entire industrial spectrum. On
the last day of the reporting period, the Trust's portfolio included more than
120 companies across 33 industries.
During the six-month period ended August 31, 1995, the Trust paid dividends of
$0.41 per share, for a total of $23.9 million. The Trust's net asset value rose
from $8.57 on the first day of the period to $8.84 on the last day of the
period. The total return was 8.07%.* At the end of the period, the Trust's net
assets stood at $544 million.
Thank you for selecting Federated High Yield Trust. Your comments and questions
are always welcome.
Sincerely,
LOGO
Glen R. Johnson
President
October 15, 1995
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The substantial decline in interest rates has been the dominant factor in the
attractive performance of fixed income securities so far in 1995. For example,
the yield on a 10-year U.S. Treasury security declined approximately 88 basis
points during the six-month period ended August 31, 1995. High yield securities
participated in this rally along with higher quality securities. However, the
high yield market did experience some divergent performance during the period as
higher quality high yield bonds outperformed lower quality high yield securities
for two reasons. First, the higher quality sector of the market is typically
more interest rate sensitive and thus benefited more from the decline in
interest rates. Second, economic concerns increased as the period progressed.
This caused investors to demand higher yields for lower quality high yield bonds
to compensate for the increased uncertainty implicit in the lower quality
issuers.
Federated High Yield Trust generated attractive total returns for the six-month
period ended August 31, 1995. The Trust had a total return of 8.07% which was
modestly below the Lipper High Current Yield Funds Average which returned 8.22%
and compared favorably with the Lehman Brothers Single B Rated Index on a gross
basis which returned 8.09%.*+ Several factors benefited the Trust's performance.
First, the Trust altered its portfolio in the later stages of 1994, by
emphasizing higher quality issuers within the high yield market and decreasing
its exposure to issuers in cyclical industries. This positioned the Trust to
have greater interest rate sensitivity through the higher quality issuers and
also protected the Trust from some credit spread widening in response to an
uncertain economic environment. Second, the Trust benefited from an increase in
corporate merger and acquisition activity. For example, the Trust's positions in
Doehler Jarvis, Surgical Health and Truck Components were all tendered for
attractive prices after the companies were acquired. Third, the Trust was
positively influenced by an overweighting in the broadcast TV and the cable TV
sectors which performed well in light of positive fundamentals and regulatory
changes. The Trust also had limited exposure to the general retail area which
performed poorly. Finally, several specific securities outperformed the overall
market in response to issuer specific developments. These would include NEXTEL,
California Energy, Revlon and PanAmSat.
During the period, several negative factors impacted the Trust. The Trust has no
exposure to the casino sector which rebounded from a poor performance in 1994 to
outperform the overall market so far in 1995. Second, while the Trust did reduce
its cyclical exposure throughout the time period, remaining holdings in these
sectors tended to underperform. Finally, the Trust experienced some cash flow
volatility during the period which impacted performance.
We continue to be optimistic on the outlook for high yield securities over the
next three to six months based on several factors. First, sluggish economic
growth coupled with good news on the inflation front should result in stable to
declining interest rates. While the pace of the economy is of some concern the
Trust's management expects economic growth to remain positive, thus limiting
credit concerns. Second, we expect high yield companies to continue to issue
equity in order to pay down debt which is a positive credit event for the
issuing company. We also expect corporate merger and acquisition activity, which
typically is a positive for high yield issuers, to remain robust.
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
+ This index is unmanaged.
- --------------------------------------------------------------------------------
Given this outlook, the Trust's management continues to emphasize a modestly
higher quality profile within the high yield market. We have also reduced
exposure to issuers in cyclical industries in response to slowing economic
growth and pricing considerations. Exposure has been increased in issuers in
growing industries such as cable TV , broadcast TV and telecommunications. We
believe that the key to superior performance in the near future will be the
result of specific issuer selection and we remain very disciplined in our
evaluation of potential portfolio holdings.
FEDERATED HIGH YIELD TRUST
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--90.2%
- ----------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.6%
-------------------------------------------------------------
$ 3,350,000 Tracor, Inc., Sr. Sub. Note, 10.875%, 8/15/2001 $ 3,475,625
------------------------------------------------------------- ------------
AUTOMOTIVE--2.4%
-------------------------------------------------------------
4,250,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%, 8/1/2004 4,526,250
-------------------------------------------------------------
1,000,000 Aftermarket Technology Co., Sr. Sub. Note, Series C, 12.00%,
8/1/2004 1,065,000
-------------------------------------------------------------
2,600,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 2,723,500
-------------------------------------------------------------
1,000,000 Lear Seating Corp., Sub. Note, 8.25%, 2/1/2002 952,500
-------------------------------------------------------------
4,000,000 Motor Wheel Corp., Sr. Note, 11.50%, 3/1/2000 3,660,000
------------------------------------------------------------- ------------
Total 12,927,250
------------------------------------------------------------- ------------
BANKING--1.3%
-------------------------------------------------------------
3,700,000 Dime Bancorp, Inc., Sr. Note, 10.50%, 11/15/2005 4,077,142
-------------------------------------------------------------
3,125,000 First Nationwide Holdings, Inc., Sr. Note, 12.25%, 5/15/2001 3,367,187
------------------------------------------------------------- ------------
Total 7,444,329
------------------------------------------------------------- ------------
BEVERAGE & TOBACCO--0.5%
-------------------------------------------------------------
1,000,000 Cott Corp., Sr. Note, 9.375%, 7/1/2005 1,008,750
-------------------------------------------------------------
2,000,000 Dr. Pepper Bottling Holdings Co., Sr. Disc. Note, 0/11.625%,
2/15/2003 1,540,000
------------------------------------------------------------- ------------
Total 2,548,750
------------------------------------------------------------- ------------
BROADCAST RADIO & TV--6.4%
-------------------------------------------------------------
3,000,000 Ackerley Communications, Inc., Sr. Secd. Note, 10.75%,
10/1/2003 3,165,000
-------------------------------------------------------------
3,750,000 Allbritton Communication Co., Sr. Sub. Note, 11.50%,
8/15/2004 3,993,750
-------------------------------------------------------------
1,250,000 (a) Benedek Broadcasting Corp., Sr. Secd. Note, 11.875%, 3/1/2005 1,309,375
-------------------------------------------------------------
3,250,000 Chancellor Broadcasting Co., Sr. Sub. Note, 12.50%, 10/1/2004 3,404,375
-------------------------------------------------------------
3,500,000 (a) Granite Broadcasting Corp., Sr. Sub. Deb., 10.375%, 5/15/2005 3,565,625
-------------------------------------------------------------
2,000,000 Granite Broadcasting Corp., Sr. Sub. Deb., 12.75%, 9/1/2002 2,205,000
-------------------------------------------------------------
4,000,000 NWCG Holding Corp., Sr. Disc. Note, 13.50% accrual, 6/15/1999 2,645,000
-------------------------------------------------------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
BROADCAST RADIO & TV--CONTINUED
-------------------------------------------------------------
$ 3,050,000 (a) Pegasus Media, Unit, 12.50%, 7/1/2005 $ 3,111,000
-------------------------------------------------------------
1,500,000 SCI Television, Inc., Sr. Secd. Note, 11.00%, 6/30/2005 1,580,625
-------------------------------------------------------------
3,550,000 Sinclair Broadcast Group, Sr. Sub. Note, 10.00%, 12/15/2003 3,589,938
-------------------------------------------------------------
2,300,000 Sinclair Broadcast Group, Sr. Sub. Note, 10.00%, 9/30/2005 2,328,750
-------------------------------------------------------------
2,250,000 Young Broadcasting, Inc., Sr. Sub. Note, 10.125%, 2/15/2005 2,351,250
-------------------------------------------------------------
1,250,000 Young Broadcasting, Inc., Sr. Sub. Note, 11.75%, 11/15/2004 1,393,750
------------------------------------------------------------- ------------
Total 34,643,438
------------------------------------------------------------- ------------
BUSINESS EQUIPMENT & SERVICES--1.6%
-------------------------------------------------------------
3,800,000 (a) Monarch Acquisition Corp., Sr. Note, 12.50%, 7/1/2003 3,876,000
-------------------------------------------------------------
285,885 San Jacinto Holdings, Inc., Sr. Sub. Note, 8.00%, 12/31/2000 145,801
-------------------------------------------------------------
545,000 San Jacinto Holdings, Inc., Sub. PIK Deb., 8.00%, 12/31/2000 397,850
-------------------------------------------------------------
4,200,000 (a) United Stationers Supply Co., Sr. Sub. Note, 12.75%, 5/1/2005 4,420,500
------------------------------------------------------------- ------------
Total 8,840,151
------------------------------------------------------------- ------------
CABLE TELEVISION--7.7%
-------------------------------------------------------------
5,300,000 Australis Media Limited, Unit, 0/14.00%, 5/15/2003 3,166,750
-------------------------------------------------------------
4,000,000 CF Cable TV, Inc., Sr. Secd. 2nd Priority Note, 11.625%,
2/15/2005 4,330,000
-------------------------------------------------------------
3,000,000 Cablevision Systems Co., Sr. Sub. Deb., 9.875%, 2/15/2013 3,255,000
-------------------------------------------------------------
7,100,000 Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 7,348,500
-------------------------------------------------------------
2,000,000 Diamond Cable Co., Sr. Disc. Note, 0/13.25%, 9/30/2004 1,275,000
-------------------------------------------------------------
5,250,000 International Cabletel, Inc., Sr. Defd. Cpn. Note, 0/10.875%,
10/15/2003 3,465,000
-------------------------------------------------------------
2,200,000 International Cabletel, Inc., Sr. Note, 0/12.75%, 4/15/2005 1,276,000
-------------------------------------------------------------
3,100,000 Le Groupe Videotron Ltee, Sr. Note, 10.625%, 2/15/2005 3,262,750
-------------------------------------------------------------
7,200,000 Peoples Choice TV Corp., Unit, 0/13.125%, 6/1/2004 3,330,000
-------------------------------------------------------------
2,500,000 Rogers Cablesystems Ltd., Sr. Secd. 2nd Priority Note,
10.00%, 3/15/2005 2,584,375
-------------------------------------------------------------
7,500,000 Rogers Cablesystems Ltd., Sr. Secd. Note, 9.65%, 1/15/2014 4,718,913
-------------------------------------------------------------
7,000,000 Videotron Holdings PLC, Sr. Disc. Note, 0/11.00%, 8/15/2005 3,902,500
------------------------------------------------------------- ------------
Total 41,914,788
------------------------------------------------------------- ------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
CHEMICALS & PLASTICS--7.8%
-------------------------------------------------------------
$ 5,800,000 Arcadian Partners L.P., Sr. Note, Series B, 10.75%, 5/1/2005 $ 6,061,000
-------------------------------------------------------------
3,250,000 (a) Crain Industries, Inc., Sr. Sub. Note, 13.50%, 8/15/2005 3,282,500
-------------------------------------------------------------
5,000,000 Foamex Capital Corp., Sr. Sub. Deb., 11.875%, 10/1/2004 4,925,000
-------------------------------------------------------------
11,750,000 G-I Holdings, Inc., Sr. Disc. Note, 11.375% accrual,
10/1/1998 8,460,000
-------------------------------------------------------------
5,300,000 Harris Chemical North America, Inc., Sr. Secd. Disc. Note,
0/10.25%, 7/15/2001 4,743,500
-------------------------------------------------------------
3,500,000 LaRoche Industries, Inc., Sr. Sub. Note, 13.00%, 8/15/2004 3,666,250
-------------------------------------------------------------
5,500,000 (a) Polymer Group, Inc., Sr. Note, 12.75%, 7/15/2002 5,651,250
-------------------------------------------------------------
3,000,000 UCC Investors Holdings, Inc., Sr. Sub. Note, 11.00%, 5/1/2003 3,060,000
-------------------------------------------------------------
2,750,000 Uniroyal Technology Corp., Sr. Secd. Note, 11.75%, 6/1/2003 2,571,250
------------------------------------------------------------- ------------
Total 42,420,750
------------------------------------------------------------- ------------
CLOTHING & TEXTILES--2.1%
-------------------------------------------------------------
4,000,000 Dan River Inc., Sr. Sub. Note, 10.125%, 12/15/2003 4,000,000
-------------------------------------------------------------
7,675,000 WestPoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 7,483,125
------------------------------------------------------------- ------------
Total 11,483,125
------------------------------------------------------------- ------------
CONGLOMERATES--2.4%
-------------------------------------------------------------
4,000,000 Fairchild Industries, Sr. Secd. Note, 12.25%, 2/1/1999 4,100,000
-------------------------------------------------------------
6,700,000 Sherritt Gordon Ltd., Sr. Note, 9.75%, 4/1/2003 6,767,000
-------------------------------------------------------------
1,000,000 Sherritt, Inc., Deb., 10.50%, 3/31/2014 1,022,500
-------------------------------------------------------------
1,053,000 Walter Industries, Inc., Sr. Note, 12.19%, 3/15/2000 1,076,693
------------------------------------------------------------- ------------
Total 12,966,193
------------------------------------------------------------- ------------
CONSUMER PRODUCTS--1.5%
-------------------------------------------------------------
2,100,000 (a) American Safety Razor Co., Sr. Note, 9.875%, 8/1/2005 2,100,000
-------------------------------------------------------------
6,300,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%,
12/15/2003 5,953,500
------------------------------------------------------------- ------------
Total 8,053,500
------------------------------------------------------------- ------------
CONTAINER & GLASS PRODUCTS--2.4%
-------------------------------------------------------------
1,260,000 (a)(b) Kane Industries, Inc., Sr. Sub. Disc. Note, 7.50%, 2/1/1998 0
-------------------------------------------------------------
2,900,000 Owens-Illinois, Inc., Note, 10.00%, 8/1/2002 3,001,500
-------------------------------------------------------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
CONTAINER & GLASS PRODUCTS--CONTINUED
-------------------------------------------------------------
$ 7,400,000 Owens-Illinois, Inc., Sr. Sub. Note, 9.95%, 10/15/2004 $ 7,622,000
-------------------------------------------------------------
500,000 Plastic Containers, Inc., Sr. Secd. Note, 10.75%, 4/1/2001 522,500
-------------------------------------------------------------
2,000,000 Silgan Corp., Sr. Sub. Note, 11.75%, 6/15/2002 2,110,000
------------------------------------------------------------- ------------
Total 13,256,000
------------------------------------------------------------- ------------
COSMETICS & TOILETRIES--1.8%
-------------------------------------------------------------
200,000 Revlon Consumer Products Corp., Note, 9.375%, 4/1/2001 198,250
-------------------------------------------------------------
2,000,000 Revlon Consumer Products Corp., Sr. Sub. Note, 10.50%,
2/15/2003 2,002,500
-------------------------------------------------------------
10,500,000 Revlon Worldwide Corp., Sr. Secd. Note, Series B, 12.00%
accrual, 3/15/1998 7,481,250
------------------------------------------------------------- ------------
Total 9,682,000
------------------------------------------------------------- ------------
ECOLOGICAL SERVICES & EQUIPMENT--2.4%
-------------------------------------------------------------
4,625,000 Allied Waste Industries, Inc., Sr. Sub. Note, 12.00%,
2/1/2004 4,995,000
-------------------------------------------------------------
4,000,000 ICF Kaiser International, Inc., Sr. Sub. Note, 12.00%,
12/31/2003 3,750,000
-------------------------------------------------------------
4,350,000 Mid-American Waste Systems, Inc., Sr. Sub. Note, 12.25%,
2/15/2003 4,545,750
------------------------------------------------------------- ------------
Total 13,290,750
------------------------------------------------------------- ------------
FARMING & AGRICULTURE--0.5%
-------------------------------------------------------------
3,000,000 Spreckels Industries, Inc., Sr. Secd. Note, 11.50%, 9/1/2000 2,970,000
------------------------------------------------------------- ------------
FOOD & DRUG RETAILERS--2.4%
-------------------------------------------------------------
3,975,000 Pathmark Stores, Inc., Sr. Sub. Note, 9.625%, 5/1/2003 3,984,938
-------------------------------------------------------------
3,300,000 Penn Traffic Co., Sr. Sub. Note, 9.625%, 4/15/2005 2,689,500
-------------------------------------------------------------
5,200,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 5,096,000
-------------------------------------------------------------
1,500,000 Ralph's Grocery Co., Sr. Sub. Note, 11.00%, 6/15/2005 1,425,000
------------------------------------------------------------- ------------
Total 13,195,438
------------------------------------------------------------- ------------
FOOD PRODUCTS--4.2%
-------------------------------------------------------------
6,700,000 Curtice-Burns Foods, Inc., Sr. Sub. Note, 12.25%, 2/1/2005 7,185,750
-------------------------------------------------------------
3,300,000 Doskocil Cos., Inc., Sr. Sub. Note, 9.75%, 7/15/2000 3,234,000
-------------------------------------------------------------
4,500,000 PMI Acquisition Corp., Sr. Sub. Note, 10.25%, 9/1/2003 4,601,250
-------------------------------------------------------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOOD PRODUCTS--CONTINUED
-------------------------------------------------------------
$ 6,000,000 Specialty Foods Acquisition Corp., Sr. Secd. Disc. Deb.,
0/13.00%, 8/15/2005 $ 3,180,000
-------------------------------------------------------------
1,100,000 Specialty Foods Corp., Sr. Note, 11.125%, 10/1/2002 1,094,500
-------------------------------------------------------------
3,750,000 Specialty Foods Corp., Sr. Sub. Note, 11.25%, 8/15/2003 3,581,250
------------------------------------------------------------- ------------
Total 22,876,750
------------------------------------------------------------- ------------
FOOD SERVICES--1.8%
-------------------------------------------------------------
8,750,000 Flagstar Corp., Sr. Note, 10.875%, 12/1/2002 8,115,625
-------------------------------------------------------------
2,250,000 Flagstar Corp., Sr. Sub. Deb., 11.25%, 11/1/2004 1,738,125
------------------------------------------------------------- ------------
Total 9,853,750
------------------------------------------------------------- ------------
FOREST PRODUCTS--4.4%
-------------------------------------------------------------
4,125,000 Container Corp. of America, Sr. Note, 11.25%, 5/1/2004 4,393,125
-------------------------------------------------------------
1,000,000 Container Corp. of America, Sr. Note, 9.75%, 4/1/2003 1,023,750
-------------------------------------------------------------
4,500,000 Domtar, Inc., Note, 12.00%, 4/15/2001 5,208,750
-------------------------------------------------------------
4,300,000 Repap New Brunswick, 2nd Priority Sr. Secd. Note, 10.625%,
4/15/2005 4,375,250
-------------------------------------------------------------
1,000,000 Riverwood International Corp., Sr. Sub. Note, 11.25%,
6/15/2002 1,095,000
-------------------------------------------------------------
1,500,000 S. D. Warren Co., Sr. Sub. Note, 12.00%, 12/15/2004 1,665,000
-------------------------------------------------------------
6,250,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 6,218,750
------------------------------------------------------------- ------------
Total 23,979,625
------------------------------------------------------------- ------------
HEALTHCARE--2.0%
-------------------------------------------------------------
2,026,785 AmeriSource Health Corp., Sr. Deb., 11.25%, 7/15/2005 2,188,928
-------------------------------------------------------------
3,750,000 Genesis Health Ventures, Inc., Sr. Sub. Note, 9.75%,
6/15/2005 3,853,125
-------------------------------------------------------------
750,000 Integrated Health Services, Inc., Sr. Sub. Note, 9.625%,
(a) 5/31/2002 765,000
-------------------------------------------------------------
4,000,000 Tenet Healthcare Corp., Sr. Sub. Note, 10.125%, 3/1/2005 4,225,000
------------------------------------------------------------- ------------
Total 11,032,053
------------------------------------------------------------- ------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HOME PRODUCTS & FURNISHINGS--2.5%
-------------------------------------------------------------
$ 1,250,000 American Standard, Inc., Sr. Deb., 11.375%, 5/15/2004 $ 1,368,750
-------------------------------------------------------------
9,350,000 American Standard, Inc., Sr. Sub. Disc. Deb., 0/10.50%,
6/1/2005 7,281,313
-------------------------------------------------------------
4,900,000 Triangle Pacific Corp., Sr. Note, 10.50%, 8/1/2003 5,071,500
------------------------------------------------------------- ------------
Total 13,721,563
------------------------------------------------------------- ------------
HOTELS, MOTELS, INNS & CASINOS--0.6%
-------------------------------------------------------------
3,000,000 Motels of America, Inc., Sr. Sub. Note, 12.00%, 4/15/2004 3,048,750
------------------------------------------------------------- ------------
INDUSTRIAL PRODUCTS & EQUIPMENT--1.8%
-------------------------------------------------------------
3,650,000 Cabot Safety Acquisition Corp., Sr. Sub. Note, 12.50%,
(a) 7/15/2005 3,805,125
-------------------------------------------------------------
4,000,000 Fairfield Manufacturing Co., Inc., Sr. Sub. Note, 11.375%,
7/1/2001 3,900,000
-------------------------------------------------------------
2,250,000 Pace Industries, Inc., Sr. Note, 10.625%, 12/1/2002 2,103,750
------------------------------------------------------------- ------------
Total 9,808,875
------------------------------------------------------------- ------------
LEISURE & ENTERTAINMENT--2.8%
-------------------------------------------------------------
3,900,000 Affinity Group, Inc., Sr. Sub. Note, 11.50%, 10/15/2003 3,929,250
-------------------------------------------------------------
3,100,000 Alliance Entertainment Corp., Sr. Sub. Note, 11.25%,
(a) 7/15/2005 3,100,000
-------------------------------------------------------------
1,600,000 (a) Premier Parks, Inc., Sr. Note, 12.00%, 8/15/2003 1,616,000
-------------------------------------------------------------
8,450,000 Six Flags Theme Parks, Sr. Sub. Disc. Note, 0/12.25%,
6/15/2005 6,231,875
------------------------------------------------------------- ------------
Total 14,877,125
------------------------------------------------------------- ------------
MACHINERY & EQUIPMENT--1.9%
-------------------------------------------------------------
5,300,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 5,392,750
-------------------------------------------------------------
4,500,000 Waters Corp., Sr. Sub. Note, 12.75%, 9/30/2004 4,803,750
------------------------------------------------------------- ------------
Total 10,196,500
------------------------------------------------------------- ------------
OIL & GAS--3.6%
-------------------------------------------------------------
5,250,000 Clark USA, Inc., Sr. Note, 11.00% accrual, 2/15/2000 3,320,625
-------------------------------------------------------------
3,750,000 Falcon Drilling Co., Inc., Sr. Note, 9.75%, 1/15/2001 3,735,938
-------------------------------------------------------------
2,000,000 Falcon Drilling Co., Inc., Sr. Sub. Note, 12.50%, 3/15/2005 2,110,000
-------------------------------------------------------------
3,500,000 Giant Industries, Inc., Sr. Sub. Note, 9.75%, 11/15/2003 3,447,500
-------------------------------------------------------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
OIL & GAS--CONTINUED
-------------------------------------------------------------
$ 2,250,000 H.S. Resources, Inc., Sr. Sub. Note, 9.875%, 12/1/2003 $ 2,176,875
-------------------------------------------------------------
2,000,000 Triton Energy Corp., Sr. Sub. Disc. Note, 0/9.75%, 12/15/2000 1,830,000
-------------------------------------------------------------
3,550,000 WRT Energy Corp., Unit, 13.875%, 3/1/2002 3,070,750
------------------------------------------------------------- ------------
Total 19,691,688
------------------------------------------------------------- ------------
PRINTING & PUBLISHING--1.3%
-------------------------------------------------------------
4,500,000 Affiliated Newspaper, Sr. Disc. Note, 0/13.25%, 7/1/2006 2,587,500
-------------------------------------------------------------
2,625,000 Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%,
7/1/2004 2,520,000
-------------------------------------------------------------
2,225,000 Webcraft Technologies, Inc., Sr. Sub. Note, 9.375%, 2/15/2002 1,977,469
------------------------------------------------------------- ------------
Total 7,084,969
------------------------------------------------------------- ------------
RETAILERS--3.0%
-------------------------------------------------------------
5,200,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 4,764,500
-------------------------------------------------------------
1,600,000 (a) Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 1,636,000
-------------------------------------------------------------
2,500,000 Hosiery Corp. of America, Inc., Sr. Sub. Note, 13.75%,
8/1/2002 2,592,500
-------------------------------------------------------------
5,000,000 ICON Health & Fitness, Inc., Sr. Sub. Note, 13.00%, 7/15/2002 5,200,000
-------------------------------------------------------------
1,900,000 (a) Samsonite Corp., Sr. Sub. Note, 11.125%, 7/15/2005 1,945,125
------------------------------------------------------------- ------------
Total 16,138,125
------------------------------------------------------------- ------------
SERVICES--0.7%
-------------------------------------------------------------
3,975,000 Solon Automated Services, Inc., Sr. Note, 12.75%, 7/15/2001 3,994,875
------------------------------------------------------------- ------------
STEEL--5.3%
-------------------------------------------------------------
4,650,000 Acme Metals, Inc., Sr. Secd. Disc. Note, 0/13.50%, 8/1/2004 3,696,750
-------------------------------------------------------------
2,000,000 Armco, Inc., Sr. Note, 9.375%, 11/1/2000 1,972,500
-------------------------------------------------------------
3,500,000 Bayou Steel Corp., 1st Mtg. Note, 10.25%, 3/1/2001 3,246,250
-------------------------------------------------------------
4,250,000 Carbide/Graphite Group, Sr. Note, 11.50%, 9/1/2003 4,462,500
-------------------------------------------------------------
5,850,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 5,323,500
-------------------------------------------------------------
5,000,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%,
9/1/2004 4,925,000
-------------------------------------------------------------
3,000,000 Geneva Steel Co., Sr. Note, 11.125%, 3/15/2001 2,520,000
-------------------------------------------------------------
3,000,000 Northwestern Steel & Wire Co., Sr. Note, 9.50%, 6/15/2001 2,880,000
------------------------------------------------------------- ------------
Total 29,026,500
------------------------------------------------------------- ------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
SURFACE TRANSPORTATION--3.1%
-------------------------------------------------------------
$ 5,000,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 $ 5,262,500
-------------------------------------------------------------
4,600,000 Sea Containers Ltd., Sr. Note, 9.50%, 7/1/2003 4,519,500
-------------------------------------------------------------
775,000 Sea Containers Ltd., Sr. Sub. Deb., Series B, 12.50%,
12/1/2004 840,875
-------------------------------------------------------------
3,125,000 Trans Ocean Container Corp., Sr. Sub. Note, 12.25%, 7/1/2004 3,171,875
-------------------------------------------------------------
3,000,000 Trism, Inc., Sr. Sub. Note, 10.75%, 12/15/2000 2,985,000
------------------------------------------------------------- ------------
Total 16,779,750
------------------------------------------------------------- ------------
TELECOMMUNICATIONS & CELLULAR--5.1%
-------------------------------------------------------------
3,000,000 Cellular Communications International, Inc., Unit, 13.25%
accrual, 8/15/2000 1,642,500
-------------------------------------------------------------
3,000,000 NEXTEL Communications, Inc., Sr. Disc. Note, 0/11.50%,
9/1/2003 1,687,500
-------------------------------------------------------------
4,000,000 NEXTEL Communications, Inc., Sr. Disc. Note, 0/9.75%,
8/15/2004 1,970,000
-------------------------------------------------------------
4,000,000 Paging Network, Inc., Sr. Sub. Note, 10.125%, 8/1/2007 4,050,000
-------------------------------------------------------------
8,600,000 PanAmSat, Corp., Sr. Sub. Disc. Note, 0/11.375%, 8/1/2003 6,665,000
-------------------------------------------------------------
3,000,000 (a) Peoples Telephone Co., Sr. Note, 12.25%, 7/15/2002 3,022,500
-------------------------------------------------------------
4,000,000 ProNet, Inc., Sr. Sub. Note, 11.875%, 6/15/2005 4,240,000
-------------------------------------------------------------
4,750,000 USA Mobile Communications, Inc., Sr. Note, 9.50%, 2/1/2004 4,370,000
------------------------------------------------------------- ------------
Total 27,647,500
------------------------------------------------------------- ------------
UTILITIES--2.3%
-------------------------------------------------------------
12,000,000 California Energy Co., Inc., Sr. Disc. Note, 0/10.25%,
1/15/2004 10,500,000
-------------------------------------------------------------
1,650,000 California Energy Co., Inc., Sr. Secd. Note, 9.875%,
6/30/2003 1,670,625
------------------------------------------------------------- ------------
Total 12,170,625
------------------------------------------------------------- ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $498,320,753) 491,041,110
------------------------------------------------------------- ------------
COMMON STOCKS--1.4%
- ----------------------------------------------------------------------------------
BUILDING & DEVELOPMENT--0.0%
-------------------------------------------------------------
3,080 Atlantic Gulf Communities Corp. 26,180
-------------------------------------------------------------
2,342 Atlantic Gulf Communities Corp., Warrants 329
------------------------------------------------------------- ------------
Total 26,509
------------------------------------------------------------- ------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES--0.0%
-------------------------------------------------------------
5,460 (a) San Jacinto Holdings, Inc. $ 2,184
------------------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.0%
-------------------------------------------------------------
14,862 (a) UCC Investors Holdings, Inc. 154,193
-------------------------------------------------------------
27,500 Uniroyal Technology Corp., Warrants 82,500
------------------------------------------------------------- ------------
Total 236,693
------------------------------------------------------------- ------------
CONGLOMERATES--0.8%
-------------------------------------------------------------
722,871 Triton Group Ltd. 1,581,280
-------------------------------------------------------------
181,487 Walter Industries, Inc. 2,540,818
------------------------------------------------------------- ------------
Total 4,122,098
------------------------------------------------------------- ------------
CONTAINER & GLASS PRODUCTS--0.0%
-------------------------------------------------------------
53,400 (a)(b) Kane Industries, Inc., Warrants 0
------------------------------------------------------------- ------------
FARMING & AGRICULTURE--0.2%
-------------------------------------------------------------
114,545 Spreckels Industries, Inc., Class A 959,314
------------------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.4%
-------------------------------------------------------------
150,231 Grand Union Co. 2,046,897
------------------------------------------------------------- ------------
PRINTING & PUBLISHING--0.0%
-------------------------------------------------------------
4,500 Affiliated Newspaper 112,500
------------------------------------------------------------- ------------
RETAILERS--0.0%
-------------------------------------------------------------
2,500 Hosiery Corp. of America, Inc. 7,500
-------------------------------------------------------------
5,000 (a) IHF Capital, Inc., Warrants 100,000
------------------------------------------------------------- ------------
Total 107,500
------------------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $19,055,849) 7,613,695
------------------------------------------------------------- ------------
PREFERRED STOCKS--0.9%
- ----------------------------------------------------------------------------------
PRINTING & PUBLISHING--0.4%
-------------------------------------------------------------
24,679 K-III Communications Corp., PIK Pfd., Series B, 11.625% 2,381,532
------------------------------------------------------------- ------------
</TABLE>
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
PREFERRED STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--0.5%
-------------------------------------------------------------
2,316 PanAmSat Corp., Sr. Red. Pfd. Stk. $2,577,708
------------------------------------------------------------- ------------
TOTAL PREFERRED STOCKS (IDENTIFIED COST $4,842,405) 4,959,240
------------------------------------------------------------- ------------
U.S. TREASURY--1.0%
- ----------------------------------------------------------------------------------
TREASURY SECURITIES--1.0%
-------------------------------------------------------------
$ 5,000,000 United States Treasury Note, 7.75%, 1/31/2000
(IDENTIFIED COST $5,043,125) 5,317,848
------------------------------------------------------------- ------------
(C) REPURCHASE AGREEMENTS--5.2%
- ----------------------------------------------------------------------------------
BANKING--5.2%
-------------------------------------------------------------
28,390,000 J.P. Morgan & Co., Inc., 5.83%, Dated 8/31/1995, Due 9/1/1995 28,390,000
------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $555,652,132)(D) $537,321,893
------------------------------------------------------------- ------------
</TABLE>
(a) Indicates private placement securities held at August 31, 1995, with a total
market value of $43,462,377, which represent 8.00% of total net assets.
(b) Non-income producing security.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(d) The cost of investments for federal tax purposes amounts to $555,652,132.
The unrealized depreciation of investments on a federal tax basis amounts to
$18,330,239 which is comprised of $10,891,122 appreciation and $29,221,361
depreciation at August 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($544,258,245) at August 31, 1995.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
PIK -- Payment in Kind
PLC -- Public Limited Company
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
KANE INDUSTRIES, INC.
On March 18, 1994, Kane Industries, Inc., along with two of its affiliates,
Kane, Inc. and Alford Industries, Inc., filed for protection under Chapter 11 of
the U.S. Bankruptcy Code. The Trust's investment adviser is unable to predict
the outcome or timing of these proceedings.
FEDERATED HIGH YIELD TRUST
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $555,652,132) $537,321,893
- --------------------------------------------------------------------------------
Income receivable 10,175,287
- --------------------------------------------------------------------------------
Receivable for investments sold 11,302,735
- --------------------------------------------------------------------------------
Receivable for shares sold 1,854,655
- --------------------------------------------------------------------------------
Prepaid expenses 105
- -------------------------------------------------------------------------------- ------------
Total assets 560,654,675
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $13,390,899
- ------------------------------------------------------------------
Payable for shares redeemed 1,397,582
- ------------------------------------------------------------------
Income distribution payable 1,202,364
- ------------------------------------------------------------------
Payable to bank 296,354
- ------------------------------------------------------------------
Accrued expenses 109,231
- ------------------------------------------------------------------ -----------
Total liabilities 16,396,430
- -------------------------------------------------------------------------------- ------------
Net Assets for 61,575,382 shares outstanding $544,258,245
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital $588,957,538
- --------------------------------------------------------------------------------
Net unrealized depreciation of investments and foreign currency transactions (18,329,532)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (26,067,596)
- --------------------------------------------------------------------------------
Distributions in excess of net investment income (302,165)
- -------------------------------------------------------------------------------- ------------
Total Net Assets $544,258,245
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$544,258,245/61,575,382 shares outstanding $8.84
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED HIGH YIELD TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------------------------
Dividends $ 54,923
- -----------------------------------------------------------------------------------------------------
Interest 26,225,835
- ----------------------------------------------------------------------------------------------------- ---------
Total income 26,280,758
- -----------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------
Investment advisory fee $1,918,117
- -----------------------------------------------------------------------------------------
Administrative personnel and services fee 193,602
- -----------------------------------------------------------------------------------------
Custodian fees 45,707
- -----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 81,381
- -----------------------------------------------------------------------------------------
Directors'/Trustees' fees 6,256
- -----------------------------------------------------------------------------------------
Auditing fees 9,512
- -----------------------------------------------------------------------------------------
Legal fees 4,544
- -----------------------------------------------------------------------------------------
Portfolio accounting fees 61,381
- -----------------------------------------------------------------------------------------
Shareholder services fee 639,372
- -----------------------------------------------------------------------------------------
Share registration costs 50,803
- -----------------------------------------------------------------------------------------
Printing and postage 15,088
- -----------------------------------------------------------------------------------------
Insurance premiums 5,888
- -----------------------------------------------------------------------------------------
Taxes 7,544
- -----------------------------------------------------------------------------------------
Miscellaneous 3,680
- ----------------------------------------------------------------------------------------- --------
Total expenses 3,042,875
- -----------------------------------------------------------------------------------------
Waivers--
- -----------------------------------------------------------------------------------------
Waiver of investment advisory fee $(614,525)
- ------------------------------------------------------------------------------
Waiver of shareholder services fee (177,993)
- ------------------------------------------------------------------------------ --------
Total waivers (792,518)
- ----------------------------------------------------------------------------------------- --------
Net expenses 2,250,357
- ----------------------------------------------------------------------------------------------------- ---------
Net investment income 24,030,401
- ----------------------------------------------------------------------------------------------------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency transactions 1,803,261
- -----------------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments and foreign currency transactions 13,260,068
- ----------------------------------------------------------------------------------------------------- ---------
Net realized and unrealized gain on investments and foreign currency transactions 15,063,329
- ----------------------------------------------------------------------------------------------------- ---------
Change in net assets resulting from operations $39,093,730
- ----------------------------------------------------------------------------------------------------- ---------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED HIGH YIELD TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
AUGUST 31, 1995 YEAR ENDED
(UNAUDITED) FEBRUARY 28, 1995
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------
OPERATIONS--
- ----------------------------------------------------
Net investment income $ 24,030,401 $ 37,778,736
- ----------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions ($ 1,803,261 and
($1,456,604), respectively, as computed for federal
tax purposes) 1,803,261 (4,773,544)
- ----------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments and foreign currency transactions 13,260,068 (33,406,182)
- ---------------------------------------------------- --------------- ---------------
Change in net assets resulting from operations 39,093,730 (400,990)
- ---------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------
Distributions from net investment income (23,890,363) (37,778,736)
- ----------------------------------------------------
Distributions in excess of net investment income -- (428,915)
- ---------------------------------------------------- --------------- ---------------
Change in net assets resulting from
distributions to shareholders (23,890,363) (38,207,651)
- ---------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- ----------------------------------------------------
Proceeds from sale of shares 391,241,005 629,838,185
- ----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 16,301,528 20,569,292
- ----------------------------------------------------
Cost of shares redeemed (343,091,960) (579,239,706)
- ---------------------------------------------------- --------------- ---------------
Change in net assets resulting from share
transactions 64,450,573 71,167,771
- ---------------------------------------------------- --------------- ---------------
Change in net assets 79,653,940 32,559,130
- ----------------------------------------------------
NET ASSETS:
- ----------------------------------------------------
Beginning of period 464,604,305 432,045,175
- ---------------------------------------------------- --------------- ---------------
End of period (including undistributed net
investment income of $0 and $0, respectively) $ 544,258,245 $ 464,604,305
- ---------------------------------------------------- --------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED HIGH YIELD TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED FEBRUARY 28 OR 29,
AUGUST 31, ------------------------------------------------------------------------------------------------
1995 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 $8.57 $9.48 $9.10 $8.91 $6.99 $8.02 $9.96 $10.21 $11.25 $10.96
- ------------
INCOME FROM
INVESTMENT
OPERATIONS
- ------------
Net
investment
income 0.41 0.84 0.84 0.93 1.03 1.04 1.30 1.30 1.26 1.30
- ------------
Net
realized
and
unrealized
gain (loss)
on
investments 0.27 (0.90) 0.40 0.19 1.90 (0.92) (1.96) (0.25) (0.98) 0.32
- ------------ ------- ---- ---- ---- ---- ---- ---- ----- ----- -----
Total from
investment
operations 0.68 (0.06) 1.24 1.12 2.93 0.12 (0.66) 1.05 0.28 1.62
- ------------
LESS
DISTRIBUTIONS
- ------------
Distributions
from net
investment
income (0.41) (0.84) (0.86) (0.93) (1.01) (1.06) (1.28) (1.30) (1.26) (1.30)
- ------------
Distributions
in excess of
net
investment
income(a) -- (0.01) -- -- -- (0.09) -- -- -- --
- ------------
Distributions
from net
realized
gain on
investment
transactions -- -- -- -- -- -- -- -- (0.06) (0.03)
- ------------ ------- ---- ---- ---- ---- ---- ---- ----- ----- -----
Total
distributions (0.41) (0.85) (0.86) (0.93) (1.01) (1.15) (1.28) (1.30) (1.32) (1.33)
- ------------ ------- ---- ---- ---- ---- ---- ---- ----- ----- -----
NET ASSET
VALUE, END
OF PERIOD $8.84 $8.57 $9.48 $9.10 $8.91 $6.99 $8.02 $ 9.96 $10.21 $11.25
- ------------ ------- ---- ---- ---- ---- ---- ---- ----- ----- -----
TOTAL
RETURN(B) 8.07% (0.32%) 14.16% 13.28% 44.15% 3.12% (7.50%) 10.92% 3.08% 15.75%
- ------------
RATIOS TO
AVERAGE
NET ASSETS
- ------------
Expenses 0.88%* 0.85% 0.83% 0.77% 0.76% 0.78% 0.76% 0.75% 0.75% 0.75%
- ------------
Net
investment
income 9.37%* 9.70% 9.17% 10.54% 12.73% 14.82% 13.87% 12.89% 12.25% 11.86%
- ------------
Expense
waiver/
reimbursement(c) 0.31%* 0.22% 0.13% 0.22% 0.33% 0.49% 0.33% 0.32% 0.24% 0.35%
- ------------
SUPPLEMENTAL
DATA
- ------------
Net assets,
end of
period (000
omitted) $544,258 $464,604 $432,045 $354,383 $222,937 $103,647 $134,242 $235,208 $246,745 $271,148
- ------------
Portfolio
turnover 49% 99% 112% 93% 61% 31% 24% 51% 73% 57%
- ------------
</TABLE>
* Computed on an annualized basis.
(a) Distributions in excess of net investment income for the periods ended
February 28, 1995 and 1991 were a result of certain book and timing
differences. These distributions do not represent a return of capital for
federal income tax purposes.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FEDERATED HIGH YIELD TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated High Yield 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--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
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 been 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 or 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--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
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.
Withholding taxes on foreign dividends have been provided for in accordance
with the Trust's understanding of the applicable country's tax rules and
rates.
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
At February 28, 1995, the Trust, for federal tax purposes, had a capital
loss carryforward of $24,374,244, which will reduce the Trust's taxable
income arising from future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve
the Trust of any liability for federal tax. Pursuant to the Code, such
capital loss carryforward will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION EXPIRATION
YEAR AMOUNT
---------- ----------
<S> <C>
1998 $ 5,075,478
1999 $11,012,464
2000 $ 6,829,698
2003 $ 1,456,604
</TABLE>
Additionally, net capital losses of ($ 3,325,355) attributable to security
transactions incurred after October 31, 1994 are treated as arising on the
first day of the Trust's next taxable year.
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.
FOREIGN CURRENCY TRANSLATION--The accounting records of the Trust are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Trust does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Trust's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
INVESTMENT RISK--Although the Fund has a diversified portfolio, the Fund
has 92.3% of its portfolio invested in lower rated and comparable quality
unrated high yield securities. Investments
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
in higher yield securities are accomplished by a greater degree of credit
risk and the risk tends to be more sensitive to economic conditions than
higher rated securities. The risk of loss due to default by the issuer may
be significantly greater for the holders of high yielding securities
because such securities are generally unsecured and are often subordinated
to other creditors of the issuer. The Fund held defaulted securities with a
value aggregating $0, at August 31, 1995.
OTHER--Investment transactions are accounted for on the trade date.
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).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1995 FEBRUARY 28, 1995
----------------- ------------------
<S> <C> <C>
- ----------------------------------------------------
Shares sold 44,599,402 72,545,518
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,855,251 2,380,438
- ----------------------------------------------------
Shares redeemed (39,099,774) (66,300,129)
- ---------------------------------------------------- --------------- ---------------
Net change resulting from share transactions 7,354,879 8,625,827
- ---------------------------------------------------- --------------- ---------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .75 of 1% of the Trust's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Trust. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services, under the Administrative
Services Agreement, provides the Trust with administrative personnel and
services. This 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 Shareholder Services ("FSS"), the Trust will pay FSS up to .25 of
1% of daily average net assets of the
FEDERATED HIGH YIELD TRUST
- --------------------------------------------------------------------------------
Trust for the period. This fee is to obtain certain services for shareholders
and to maintain shareholder accounts.
TRANSFER AGENT FEES--Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Trust. This fee is based on the size, type,
and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Trust's accounting records 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.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended August 31, 1995, were as follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------
PURCHASES $285,442,586
- ------------------------------------------------------------------------------ ------------
SALES $234,552,162
- ------------------------------------------------------------------------------ ------------
</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. 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.
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.
- --------------------------------------------------------------------------------
FEDERATED
- --------------------------------------------------------------------------------
HIGH
- --------------------------------------------------------------------------------
YIELD
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
AUGUST 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- -------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 314197104
8092705 (10/95)
-----------------------------------
-----------------------------------
-----------------------------------
