FEDERATED ARMs FUND
Institutional Shares
Institutional Service Shares
Supplement to Prospectuses dated October 31, 1994
Under the sub-section entitled "Adviser's Background" which begins on page 9
of the Prospectuses, please delete the third and fourth paragraphs and
replace them with the following information:
"Kathleen M. Foody-Malus and Susan M. Nason are the Fund's
portfolio managers. Ms. Foody-Malus has been the portfolio
manager since January 1992. Ms. Foody-Malus joined Federated
Investors in 1983 and has been a Vice President of the Fund's
investment adviser since 1993. Ms. Foody-Malus served as an
Assistant Vice President of the investment adviser from 1990
until 1992. Ms. Foody-Malus received her M.B.A. in
Accounting/Finance from the University of Pittsburgh.
Susan M. Nason has been the Fund's portfolio manager since July
1993. Ms. Nason joined Federated Investors in 1987 and has been
a Vice President of the Fund's investment adviser since 1993.
Ms. Nason served as an Assistant Vice President of the
investment adviser from 1990 until 1992. Ms. Nason is a
Chartered Financial Analyst and received her M.B.A. in Finance
from Carnegie-Mellon University."
April 24, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
314082108
314082207
G00624-02 (4/95)
