FEDERATED CAPITAL APPRECIATION FUND (A Portfolio of Federated Equity Funds)
Class A Shares, Class B Shares, Class C Shares Supplement to Prospectuses dated
December 31, 1996
Please delete the third paragraph under the subsection entitled "Adviser's
Background" which begins on page 21 of the Fund's Class A Shares Prospectus and
page 29 of the Fund's Class A Shares, Class B Shares and Class C Shares
Prospectus, and add the following as the fourth paragraph:
"James E. Grefenstette will be a portfolio manager of the Fund effective
November 1997. Mr. Grefenstette joined Federated Investors in 1992 and has
been a Vice President of the Fund's investment Adviser since 1996. From
1994 until 1996, Mr. Grefenstette acted as an Assistant Vice President of
the Fund's investment Adviser, and served as an Investment Analyst of the
investment Advisor from 1992 to 1994. Mr. Grefenstette was a credit analyst
at Westinghouse Credit Corp. from 1990 until 1992. Mr. Grefenstette is a
Chartered Financial Analyst; he received his M.S. in Industrial
Administration from Carnegie Mellon University."
October 31, 1997
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Cusip 314172701
Cusip 314728800
Cusip 314172883
G01786-05 (10/97)
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