- --------------------------------------------------------------------------------
FEDERATED
- --------------------------------------------------------------------------------
GROWTH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
8010409 (6/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Growth Trust (the "Trust") for the six-month period ended April 30, 1994.
Included for your review are the Financial Statements, which contain the Trust's
Portfolio of Investments, and our Investment Review, which discusses the economy
and our outlook for the stock market.
The Trust pursues appreciation of capital by investing primarily in stocks of
companies with potential for above-average growth in earnings and/or price
appreciation. As you can see by the enclosed portfolio, the Trust's diversified
portfolio was invested in common stocks and convertible securities from 40
issuers representing 14 industry groups.
On the last day of the report period, the Trust's net assets stood at $426.2
million. Reflecting increased volatility in the financial markets early in the
year, the Trust's net asset value began the period at $23.92 per share and
closed the period at $22.23 per share. However, the Trust paid dividends of
$0.08 per share and capital gains distributions of $0.48 per share during the
six-month period.
The Trust continues its commitment to provide you with quality investment
products and the highest level of service. As always, we invite your comments
and suggestions.
Sincerely,
Glen R. Johnson
President
June 15, 1994
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Federated Growth Trust (the "Trust") was established in 1984 to provide
investor's the opportunity for investment in a diversified portfolio of stocks
which have prospects for significant capital appreciation. The stock selection
process for the Trust utilizes investment disciplines which the Federated
organization has used successfully for several years. The investment emphasis is
placed on stocks that have favorable price and earnings momentum
characteristics. The Trust's concentration will be in larger-sized growth
companies, generally above $500 million in fully diluted market capitalization
at the time of purchase. Managed to participate in up markets, the Trust offers
the potential for significant capital appreciation over time.
In the six months since October 31, 1993, the stock market has experienced some
memorable ups and downs. The Blue Chip Cyclical Dow Jones 30 Industrials*
witnessed most of the ups with the bellweather briefly touching 4000 on January
31, 1994, before finishing almost unchanged for the period. Most other broad
averages declined during the period, following the lead of domestic interest
rates which rose from under 6% on the long U.S. Treasury to well over 7%.
The relative underperformance of large capitalization growth stocks continued
and actually went negative on an absolute basis during this period. On a capital
only basis, the Russell 1000 Growth Index* declined 2.94% over this six months,
wiping out all capital gains since January 1, 1992. Lipper Growth Funds* have
significantly outperformed large growth companies--an indication that they are
using value names, smaller companies, foreign stocks, and/or a cash position for
market timing purposes. The management of the Trust will continue to maintain
its position in these larger growth stocks to fit the asset allocation needs of
our investors.
Consistent with the pursuit of the Trust's investment objective, recent
purchases include Dreyfus (mutual funds), First USA 6.25% converts (credit
cards), Intel (microprocessors), and Chrysler (autos). A significant percentage
of the Trust is invested in convertible and/or putable bonds, which may provide
downside protection if the current correction becomes a bear market. We believe,
however, given the consistent cash flows from retirement accounts into mutual
funds, that the recent leveraged unwinding of hedge funds positions should, in
fact, create a buying opportunity.
The Trust's disciplined stock selection approach, with its concentration on
reasonably priced stocks exhibiting positive relative earnings and price
momentum, is designed to allow the Trust to take advantage of market
opportunities. We believe that the Trust is well-suited in the current
environment to pursue a goal of strong performance in up markets and over market
cycles.
* These 3 indices are unmanaged.
FEDERATED GROWTH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
COMMON STOCKS--73.3%
- -----------------------------------------------------------------------------------
AUTOMOTIVE, PARTS--4.5%
-----------------------------------------------------------------
700,000 Allen Group, Inc. $ 11,812,500
-----------------------------------------------------------------
150,000 Chrysler Corp. 7,181,250
----------------------------------------------------------------- ------------
Total 18,993,750
----------------------------------------------------------------- ------------
BANKING & FINANCE--10.7%
-----------------------------------------------------------------
300,000 Dreyfus Corp. 14,475,000
-----------------------------------------------------------------
725,000 MBNA Corp. 18,125,000
-----------------------------------------------------------------
250,000 NationsBank Corp. 13,062,500
----------------------------------------------------------------- ------------
Total 45,662,500
----------------------------------------------------------------- ------------
BASIC INDUSTRY--2.7%
-----------------------------------------------------------------
132,100 Harsco Corp. 5,498,663
-----------------------------------------------------------------
240,000 Medusa Corp. 5,970,000
----------------------------------------------------------------- ------------
Total 11,468,663
----------------------------------------------------------------- ------------
BROADCASTING--0.7%
-----------------------------------------------------------------
100,000 ** Multi Media, Inc. 2,800,000
----------------------------------------------------------------- ------------
CAPITAL GOODS--19.3%
-----------------------------------------------------------------
500,000 ** Alliant Techsystems, Inc. 11,312,500
-----------------------------------------------------------------
235,000 Dover Corp. 12,925,000
-----------------------------------------------------------------
800,000 ** Foamex International, Inc. 11,100,000
-----------------------------------------------------------------
502,500 Greenfield Ind. 9,798,750
-----------------------------------------------------------------
625,000 ** Kenetech Corp. 12,343,750
-----------------------------------------------------------------
400,000 ** MagneTek, Inc. 5,800,000
-----------------------------------------------------------------
200,000 Stewart & Stevenson Services, Inc. 8,750,000
-----------------------------------------------------------------
930,000 ** Valence Technology, Inc. 10,462,500
----------------------------------------------------------------- ------------
Total 82,492,500
----------------------------------------------------------------- ------------
</TABLE>
FEDERATED GROWTH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
CONSUMER GOODS--RETAIL--6.8%
-----------------------------------------------------------------
600,000 Blockbuster Entertainment Corp. $ 16,275,000
-----------------------------------------------------------------
1,225,000 ** Service Merchandise, Inc. 8,728,125
-----------------------------------------------------------------
400,000 ** Showbiz Pizza Time, Inc. 4,000,000
----------------------------------------------------------------- ------------
Total 29,003,125
----------------------------------------------------------------- ------------
CONSUMER PRODUCTS--9.9%
-----------------------------------------------------------------
900,000 ** ADT, Limited 8,550,000
-----------------------------------------------------------------
1,050,000 ** Dr. Pepper/7-Up Holding Co. 26,906,250
-----------------------------------------------------------------
410,000 ** Genlyte Group, Inc. 1,845,000
-----------------------------------------------------------------
130,000 Sensormatic Electronics Corp. 4,257,500
-----------------------------------------------------------------
60,000 ** Starter Corp. 735,000
----------------------------------------------------------------- ------------
Total 42,293,750
----------------------------------------------------------------- ------------
ENERGY--1.4%
-----------------------------------------------------------------
200,000 Sonat, Inc. 6,075,000
----------------------------------------------------------------- ------------
HEALTHCARE--5.8%
-----------------------------------------------------------------
200,000 ** Genentech, Inc. 9,975,000
-----------------------------------------------------------------
340,000 ** Genetics Institute, Inc. 14,875,000
----------------------------------------------------------------- ------------
Total 24,850,000
----------------------------------------------------------------- ------------
INSURANCE--2.5%
-----------------------------------------------------------------
309,627 Travelers Corp. 10,759,538
----------------------------------------------------------------- ------------
TECHNOLOGY--2.6%
-----------------------------------------------------------------
160,000 ** Integrated Device Technology 4,820,000
-----------------------------------------------------------------
100,000 Intel Corp. 6,100,000
----------------------------------------------------------------- ------------
Total 10,920,000
----------------------------------------------------------------- ------------
TRANSPORTATION--4.1%
-----------------------------------------------------------------
584,100 American President Companies, Ltd. 11,901,037
-----------------------------------------------------------------
510,000 ** Greyhound Lines, Inc. 5,418,750
----------------------------------------------------------------- ------------
Total 17,319,787
----------------------------------------------------------------- ------------
</TABLE>
FEDERATED GROWTH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
SHARES VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
WASTE DISPOSAL--2.3%
-----------------------------------------------------------------
2,575,000 ** Chambers Development, Inc. 9,656,250
----------------------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $262,737,099) $312,294,863
----------------------------------------------------------------- ------------
CONVERTIBLE SECURITIES--16.6%
- -----------------------------------------------------------------------------------
CONSUMER PRODUCTS--4.6%
-----------------------------------------------------------------
$46,000,000 Coleman Worldwide Corp. LYON, 5/27/2013 $11,730,000
-----------------------------------------------------------------
7,750,000 Laidlaw, Inc. (ADT) Conv. Sub. Deb., 6.00%, 1/15,99 7,943,750
----------------------------------------------------------------- ------------
Total 19,673,750
----------------------------------------------------------------- ------------
FINANCE--5.6%
-----------------------------------------------------------------
305,000 First USA, Inc., 6.25%, PRIDES 11,933,125
-----------------------------------------------------------------
310,000 Sun America, Inc. Conv. Pfd., $2.78, Series D 11,935,000
----------------------------------------------------------------- ------------
Total 23,868,125
----------------------------------------------------------------- ------------
HEALTHCARE--4.3%
-----------------------------------------------------------------
30,000,000 Roche Holdings, Inc., 4.75% LYON, 9/23/2008 15,825,000
-----------------------------------------------------------------
20,441 ** Schering-Plough Corp., Warrant Units, 12/2/96 1,940,464
-----------------------------------------------------------------
50,000 ** Schering-Plough Corp., Warrants, 12/2/96 462,000
----------------------------------------------------------------- ------------
Total 18,227,464
----------------------------------------------------------------- ------------
TRANSPORTATION--2.1%
-----------------------------------------------------------------
8,575,000 Greyhound Lines, Inc., Conv. Sub. Deb., 8.50%, 3/31/2007 8,918,000
----------------------------------------------------------------- ------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST, $70,638,605) 70,687,339
----------------------------------------------------------------- ------------
</TABLE>
FEDERATED GROWTH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
*REPURCHASE AGREEMENT--8.8%
- -----------------------------------------------------------------------------------
$37,680,000 J.P. Morgan Securities, Inc., 3.60% dated 4/29/94, due 5/2/94
(at amortized cost) (Note 2B) 37,680,000
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST, $371,055,704) $420,662,202+
----------------------------------------------------------------- ------------
</TABLE>
LYON--Liquid Yield Option Note.
PRIDES--Preferred Redeemable Increased Dividend Equity Securities.
+ The cost for federal tax purposes amounts to $371,055,704. The net unrealized
appreciation of investments on a federal tax basis amounts to $49,606,498,
which is comprised of $75,220,582 appreciation and $25,614,084 depreciation
at April 30, 1994.
* 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 was through participation in a joint
account with other Federated funds.
** Non-income producing.
Note: The categories of investments are shown as a percentage of net assets
($426,199,724) at April 30, 1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED GROWTH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments at value (Notes 2A and 2B) (identified and tax cost, $371,055,704) $420,662,202
- --------------------------------------------------------------------------------
Cash 11,712
- --------------------------------------------------------------------------------
Receivable for investments sold 15,866,616
- --------------------------------------------------------------------------------
Dividends and interest receivable 535,893
- --------------------------------------------------------------------------------
Receivable for Trust shares sold 247,416
- -------------------------------------------------------------------------------- ------------
Total assets 437,323,839
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $9,631,050
- -------------------------------------------------------------------
Payable for Trust shares repurchased 1,394,518
- -------------------------------------------------------------------
Accrued expenses 98,547
- ------------------------------------------------------------------- ----------
Total liabilities 11,124,115
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 19,170,617 shares of beneficial interest outstanding $426,199,724
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF (NOTE 2F):
- --------------------------------------------------------------------------------
Paid-in capital $368,619,265
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments 49,606,498
- --------------------------------------------------------------------------------
Accumulated undistributed net realized gain on investments 7,740,742
- --------------------------------------------------------------------------------
Undistributed net investment income 233,219
- -------------------------------------------------------------------------------- ------------
Total $426,199,724
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share
($426,199,724 / 19,170,617 shares of beneficial interest outstanding) $22.23
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED GROWTH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------
INCOME (Note 2C)--
- --------------------------------------------------------------------------------
Dividend income $ 2,018,996
- --------------------------------------------------------------------------------
Interest income 1,677,572
- -------------------------------------------------------------------------------- ------------
Total investment income 3,696,568
- --------------------------------------------------------------------------------
EXPENSES--
- -------------------------------------------------------------------
Investment advisory fee (Note 4) $1,692,898
- -------------------------------------------------------------------
Trustees' fees 4,100
- -------------------------------------------------------------------
Administrative personnel and services (Note 4) 258,408
- -------------------------------------------------------------------
Custodian and recordkeeping fees and expenses 123,215
- -------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 18,065
- -------------------------------------------------------------------
Shareholder services fee (Note 4) 37,322
- -------------------------------------------------------------------
Trust share registration costs 18,984
- -------------------------------------------------------------------
Auditing fees 8,125
- -------------------------------------------------------------------
Legal fees 6,300
- -------------------------------------------------------------------
Printing and postage 7,625
- -------------------------------------------------------------------
Insurance premiums 6,600
- -------------------------------------------------------------------
Taxes 4,543
- -------------------------------------------------------------------
Miscellaneous 3,297
- ------------------------------------------------------------------- ----------
Total expenses 2,189,482
- -------------------------------------------------------------------------------- ------------
Net investment income 1,507,086
- -------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) 7,740,196
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) of investments (31,381,005)
- -------------------------------------------------------------------------------- ------------
Net realized and unrealized loss on investments (23,640,809)
- -------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $(22,133,723)
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED GROWTH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1994* 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 1,507,086 $ 3,943,542
- -------------------------------------------------------------
Net realized gain (loss) on investments ($7,740,196 and
$9,253,729 net gain, respectively, as computed for federal
tax purposes) 7,740,196 11,467,664
- -------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments (31,381,005) 44,574,581
- ------------------------------------------------------------- ------------- -------------
Change in net assets resulting from operations (22,133,723) 59,985,787
- ------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- -------------------------------------------------------------
Dividends to shareholders from net investment income (1,554,941) (4,405,675)
- -------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (9,252,795) (3,134,631)
- ------------------------------------------------------------- ------------- -------------
Change in net assets from distributions to shareholders (10,807,736) (7,540,306)
- ------------------------------------------------------------- ------------- -------------
TRUST SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -------------------------------------------------------------
Proceeds from sale of shares 110,928,724 219,086,722
- -------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 5,115,347 3,344,081
- -------------------------------------------------------------
Cost of shares redeemed (117,714,281) (205,719,474)
- ------------------------------------------------------------- ------------- -------------
Change in net assets from Trust share transactions (1,670,210) 16,711,329
- ------------------------------------------------------------- ------------- -------------
Change in net assets (34,611,669) 69,156,810
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 460,811,393 391,654,583
- ------------------------------------------------------------- ------------- -------------
End of period (including undistributed net investment income
of $233,219 and $220,109, respectively) $ 426,199,724 $ 460,811,393
- ------------------------------------------------------------- ------------- -------------
</TABLE>
* Six months ended April 30, 1994 (unaudited)
(See Notes which are an integral part of the Financial Statements)
FEDERATED GROWTH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PERIOD
ENDED
YEAR ENDED OCTOBER 31, OCTOBER 31, YEAR ENDED MAY 31,
------------------------------------------------ ----------- ------------------------------------
1994**** 1993 1992 1991 1990 1989 1988** 1988 1987 1986 1985***
-------- ------- -------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD $ 23.92 $ 21.16 $ 21.58 $ 16.78 $ 20.99 $ 17.18 $ 16.93 $ 17.67 $ 16.03 $ 11.66 $ 10.00
- -------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------
Net investment income 0.08 0.20 0.33 0.57 0.75 0.59 0.09 0.25 0.28 0.27 0.27
- -------------------
Net realized and
unrealized gain (loss)
on investments (1.21) 2.96 0.45 5.97 (2.69) 3.80 1.08 (0.23) 2.40 4.46 1.60
- ------------------- ----- ----- ----- ------ ------ ------ ----- ------ ------ ----- ------
Total from investment
operations (1.13) 3.16 0.78 6.54 (1.94) 4.39 1.17 0.02 2.68 4.73 1.87
- -------------------
LESS DISTRIBUTIONS
- -------------------
Dividends to
shareholders from net
investment income (0.08) (0.23) (0.33) (0.61) (0.79) (0.52) (0.15) (0.20) (0.26) (0.29) (0.21)
- -------------------
Distributions to
shareholders from net
realized gain on
investment
transactions (0.48) (0.17) (0.87) (1.13) (1.48) (0.06) (0.77) (0.56) (0.78) (0.07) --
- ------------------- ----- ----- ----- ------ ------ ------ ----- ------ ------ ----- ------
Total distributions (0.56) (0.40) (1.20) (1.74) (2.27) (0.58) (0.92) (0.76) (1.04) (0.36) (0.21)
- ------------------- ----- ----- ----- ------ ------ ------ ----- ------ ------ ----- ------
NET ASSET VALUE, END OF
PERIOD $ 22.23 $ 23.92 $ 21.16 $ 21.58 $ 16.78 $ 20.99 $ 17.18 $ 16.93 $ 17.67 $ 16.03 $ 11.66
- ------------------- ----- ----- ----- ------ ------ ------ ----- ------ ------ ----- ------
TOTAL RETURN* (4.80)% 15.06% 3.93% 41.54% (10.41)% 25.87% 6.95% 0.50% 17.55% 41.58% 19.00%
- -------------------
RATIOS TO AVERAGE NET
ASSETS
- -------------------
Expenses 0.97%(b) 0.96% 1.01% 1.01% 1.01% 1.01% 1.00%(b) 1.00% 1.00% 1.00% 0.99%(b)
- -------------------
Net investment income 0.67%(b) 0.90% 1.54% 2.88% 4.00% 2.99% 1.30%(b) 1.39% 1.78% 2.35% 3.33%(b)
- -------------------
Expense waiver/
reimbursement(a) -- -- -- 0.10% 0.22% 0.14% 0.60%(b) 0.15% 0.18% 0.50% 0.51%(b)
- -------------------
SUPPLEMENTAL DATA
- -------------------
Net assets, end of
period (000 omitted) $426,200 $460,811 $391,655 $275,561 $138,407 $134,735 $104,146 $102,395 $134,657 $47,318 $7,966
- -------------------
Portfolio turnover
rate 26% 57% 46% 54% 67% 79% 24% 88% 66% 42% 46%
- -------------------
</TABLE>
* Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
** For the five months ended October 31, 1988.
*** Reflects operations for the period from August 23, 1984, (date of initial
public investment), to May 31, 1985.
**** Six months ended April 30, 1994 (unaudited).
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FEDERATED GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Trust is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end, management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles (GAAP).
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--Listed equity securities are valued at the last sales price
reported on national securities exchanges. Unlisted securities and short-term obligations
(and private-placement securities) are generally valued at the prices provided by an
independent pricing service. Short-term securities with remaining maturities of sixty
days, or less may be stated at amortized cost, which approximates value.
B. REPURCHASE AGREEMENTS--It is the policy of the Trust to require the custodian bank to
take possession, to have legally segregated in the Federal Reserve Book Entry System or
to have segregated within the custodian bank's vault all securities held as collateral in
support of repurchase agreement investments. Additionally, procedures have been
established by the Trust to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure the value at least equals the
principal amount of the repurchase agreement, including accrued interest.
The Trust will only enter into repurchase agreements with banks and other recognized
financial institutions such as broker/dealers which are deemed by the Trust's adviser to
be creditworthy pursuant to guidelines established by the Board of Trustees ("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.
C. 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 ("Code").
D. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of the Code
applicable to regulated investment companies and distribute to shareholders each year
substantially all of its taxable income. Accordingly, no provisions for federal tax are
necessary.
</TABLE>
FEDERATED GROWTH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in when-issued or
delayed 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.
F. RECLASSIFICATIONS--During the current period, the Trust adopted Statement of Position
93-2, Determination, Disclosure, and Financial Statement Presentation of Income, Capital
Gain, and Return of Capital Distributions by Investment Companies. Accordingly, permanent
book and tax basis differences relating to shareholder distributions have been
reclassified to paid-in capital. As of April 30, 1994, the cumulative net effect of such
differences, totaling $337, was reclassified from net realized gain and undistributed net
investment income to paid-in capital. Net investment income and net assets were not
affected by this change.
G. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------
1994* 1993
- ------------------------------------------------------------------ ---------- ----------
<S> <C> <C>
Shares sold 4,681,586 9,655,835
- ------------------------------------------------------------------
Shares issued to shareholders in payment
of dividends declared 219,066 148,924
- ------------------------------------------------------------------
Shares redeemed (4,997,511) (9,050,047)
- ------------------------------------------------------------------ ---------- ----------
Net change resulting from Trust share transactions (96,859) 754,712
- ------------------------------------------------------------------ ---------- ----------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to 0.75 of 1% of the Trust's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Trust
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds
FEDERATED GROWTH TRUST
- --------------------------------------------------------------------------------
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during any fiscal year shall be at least $125,000
per portfolio and $30,000 per each additional class of shares.
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 average net assets of the Trust for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder's
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEE--Federated Services Company ("FServ")
serves as transfer and dividend disbursing agent for the Trust. The fee is based
on the size, type and number of accounts and transactions made by shareholders.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended April 30, 1994, were as follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------
PURCHASES-- $110,848,768
- ------------------------------------------------------------------------------ ------------
SALES-- $140,823,393
- ------------------------------------------------------------------------------ ------------
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
Wesley W. Posvar Edward C. Gonzales
Marjorie P. Smuts Vice President and Treasurer
John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
Robert C. Rosselot
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies. Investment in these shares
involves risk, including the 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.
