FEDERATED CAPITAL APPRECIATION FUND
(A Portfolio of Federated Equity Funds)
Class B Shares
FEDERATED GROWTH STRATEGIES FUND
(A Portfolio of Federated Equity Funds)
Class B Shares
FEDERATED SMALL CAP STRATEGIES FUND
(A Portfolio of Federated Equity Funds)
Class B Shares
SUPPLEMENT TO PROSPECTUSES DATED DECEMBER 21, 1995, DECEMBER 31, 1995 AND
NOVEMBER 1, 1995, RESPECTIVELY.
1.Please delete in its entirety the section entitled ``ELIMINATION OF
CONTINGENT DEFERRED SALES CHARGE''on page 25 of the Federated Capital
Appreciation Fund prospectus, page 22 of the Federated Growth Strategies
Fund prospectus and page 25 of the Federated Small Cap Strategies Fund
prospectus, respectively, and replace with the following:
`ELIMINATION OF CONTINGENT DEFERRED SALES CHARGE
The contingent deferred sales charge will be eliminated with respect
to the following redemptions: (1) redemptions following the death
or disability, as defined in Section 72(m)(7) of the Internal
Revenue Code of 1986, of the last surviving shareholder; (2)
redemptions representing minimum required distributions from an
Individual Retirement Account or other retirement plan to a
shareholder who has attained the age of 70 1/2; (3) involuntary
redemptions by the Fund of Shares in shareholder accounts that do
not comply with the minimum balance requirements; and (4) qualifying
redemptions of Class B Shares under a Systematic Withdrawal Program.
To qualify for elimination of the contingent deferred sales charge
through a Systematic Withdrawal Program, the redemptions of Class B
Shares must be from an account: that is at least 12 months old, has
all Fund distributions reinvested in Fund Shares, and has a value of
at least $10,000 when the Systematic Withdrawal Program is
established. Qualifying redemptions may not exceed 1.00% monthly of
the account value as periodically determined by the Fund. For more
information regarding the elimination of the contingent deferred
sales charge through a Systematic Withdrawal Program contact your
financial intermediary or the Fund. No contingent deferred sales
charge will be imposed on redemptions of Shares held by Directors,
employees and sales representatives of the Fund, the distributor, or
affiliates of the Fund or distributor, and their immediate family
members; employees of any financial institution that sells Shares of
the Fund pursuant to a sales agreement with the distributor; and
spouses and children under the age of 21 of the aforementioned
persons. Finally, no contingent deferred sales charge will be
imposed on the redemption of Shares originally purchased through a
bank trust department, an investment adviser registered under the
Investment Advisers Act of 1940 or retirement plans where the third
party administrator has entered into certain arrangements with
Federated Securities Corp. or its affiliates, or any other financial
institution, to the extent that no payments were
advanced for purchases made through such entities. The Fund
reserves the right to discontinue or modify the elimination of the
contingent deferred sales charge. Shareholders will be notified of
a discontinuation. Any Shares purchased prior to the termination of
such waiver would have the contingent deferred sales charge
eliminated as provided in the Fund's prospectus at the time of the
purchase of the Shares. If a shareholder making a redemption
qualifies for an elimination of the contingent deferred sales
charge, the shareholder must notify Federated Securities Corp. or
the transfer agent in writing that the shareholder is entitled to
such elimination.''
October 1, 1996
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the Funds
and is a subsidiary of Federated Investors.
Cusip 314172800
Cusip 314172206
Cusip 314172503
G01158-02 (10/96)
FEDERATED CAPITAL APPRECIATION FUND
(A Portfolio of Federated Equity Funds)
Class B Shares
FEDERATED GROWTH STRATEGIES FUND
(A Portfolio of Federated Equity Funds)
Class B Shares
FEDERATED SMALL CAP STRATEGIES FUND
(A Portfolio of Federated Equity Funds)
Class B Shares
SUPPLEMENT TO STATEMENTS OF ADDITIONAL INFORMATION DATED DECEMBER 21,
1995, DECEMBER 31, 1995 AND NOVEMBER 1, 1995, RESPECTIVELY.
Please insert the following directly after the section entitled
`REDEEMING SHARES'' on page 17 of the Federated Capital Appreciation Fund
Statement of Additional Information (`SAI''), page 14 of the Federated
Growth Strategies Fund SAI and page 15 of the Federated Small Cap
Strategies Fund SAI:
`ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE
The amounts that a shareholder may withdraw under a Systematic
Withdrawal Program that qualify for elimination of the Contingent
Deferred Sales Charge may not exceed 12% annually with reference
initially to the value of the Class B Shares upon establishment of
the Systematic Withdrawal Program and then as calculated at the
annual valuation date. Redemptions on a qualifying Systematic
Withdrawal Program can be made at a rate of 1.00% monthly, 3.00%
quarterly, or 6.00% semi-annually with reference to the applicable
account valuation amount. Amounts that exceed the 12.00% annual
limit for redemption, as described, may be subject to the Contingent
Deferred Sales Charge. To the extent that a shareholder exchanges
Shares for Class B Shares of other Federated Funds, the time for
which the exchanged-for Shares are to be held will be added to the
time for which exchanged-from Shares were held for purposes of
satisfying the 12 month holding requirement. However, for purposes
of meeting the $10,000 minimum account value requirement, Class B
Share accounts will not be aggregated.''
October 1, 1996
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the Funds
and is a subsidiary of Federated Investors.
Cusip 314172800
Cusip 314172206
Cusip 314172503
G01158-03 (10/96)
