FEDERATED CAPITAL APPRECIATION FUND
(formerly, Federated Exchange Fund, Ltd.)
(A Portfolio of Federated Equity Funds)
Class A Shares
Class B Shares
Class C Shares
SUPPLEMENT TO PROSPECTUSES DATED DECEMBER 31, 1996
On page 29 of the Class A Shares, Class B Shares, and Class C Shares
prospectus, and page 21 of the Class A Shares prospectus, respectively,
please add the following as the fourth paragraph under the section entitled
ADVISER'S BACKGROUND:
`Arthur J. Barry has been the Fund's portfolio manager since March
1997. Mr. Barry joined Federated Investors in 1994 as an Investment
Analyst for the Fund's investment adviser. From 1990 to 1992, Mr.
Barry served as a Financial Service Specialist for
AT&T - Bell Laboratories. Mr. Barry earned his M.S.I.A. with a
concentration in finance and accounting from Carnegie Mellon
University.''
April 1, 1997
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the Fund
and is a subsidiary of Federated Investors.
Cusip 314172701
Cusip 314728800
Cusip 314172883
G01786-02 (3/97)
CMR703028
