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Previous: INTERWEST HOME MEDICAL INC, 3, 2000-12-28 |
Next: FEDERATED INCOME SECURITIES TRUST, NSAR-A, 2000-12-28 |
Federated Investors
World-Class Investment Manager
A Portfolio of Federated Income Securities Trust
October 31, 2000
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for Federated Intermediate Income Fund, a portfolio of Federated Income Securities Trust. The report covers the six-month reporting period ended October 31, 2000. It begins with a review of the bond market by the fund's portfolio manager, which is followed by a complete listing of fund holdings and its financial statements.
On behalf of income-oriented investors, the fund invests in a diversified portfolio consisting primarily of intermediate-term, high-quality debt securities. At the end of the reporting period, the fund's portfolio was invested primarily in corporate bonds (66.8%), followed by U.S. government agency securities (12.7%), mutual funds (11.5%), municipals (3.2%), asset-backed securities (2.2%), U.S. Treasury securities (1.6%), preferred stocks (1.3%) and a collateralized mortgage obligation.
During the six-month reporting period, Institutional Shares produced a total return of 5.14%1 through dividends totaling $0.329 per share and a net asset value increase of $0.15 per share. Institutional Service Shares produced a total return of 5.01%1 through dividends totaling $0.317 and a net asset value increase of $0.15 per share. Net assets in the fund totaled $322.4 million at the end of the reporting period.
Thank you for selecting Federated Intermediate Income Fund as a high-quality income investment. As always, we welcome your questions, comments or suggestions.
Sincerely,
J. Christopher Donahue
J. Christopher Donahue
President
December 15, 2000
1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Federated Intermediate Income Fund invests primarily in high-quality, corporate debt securities rated in one of the four highest categories (BBB or better) by a nationally recognized statistical rating organization. The fund may also invest in other high-quality government and asset-backed securities. The fund duration is managed within a range of three to seven years.1
The six-month reporting period ended October 31, 2000 was positive for high-quality fixed income investors, in that interest rates declined across the entire maturity spectrum from 1-year to 30-year maturities. The short to intermediate part of the yield curve (i.e., 2- to 5-year maturities) experienced the largest rate declines. The Federal Reserve Board (the "Fed") did increase the federal funds target rate by 50 basis points in May 2000. This rate hike was the sixth upward move since the middle of 1999, and could well have been the final rate hike for the foreseeable future.
The pace of economic growth slowed meaningfully over the summer months with an apparent slowdown into the fourth quarter of 2000. The fixed income marketplace has come to the conclusion that the prior rate increases are having the desired effect of slowing the economy and putting a lid on inflationary pressures. In addition to weaker economic statistics, the third quarter of 2000 saw a wide variety of corporate earning disappointments, which created a substantial decline in equity markets. As a result, bonds regained their safe haven status and provided investors with income as well as capital appreciation.
In terms of relative fixed income sector performance, all high-quality bond sectors rose in price; however, the highest-quality sectors performed the best-- treasuries, agencies and mortgages. Investment grade corporate bonds also experienced price appreciation, but less so than higher-quality instruments, as corporate earnings and equity valuation concerns somewhat offset an overall positive bond environment.
For the six-month reporting period, Federated Intermediate Income Fund's Institutional Shares and Institutional Service Shares provided shareholders with a 5.14% and 5.01%2 total return, a return in excess of its income distribution, as the net asset value for each share class rose 15 cents. No significant changes were made from a duration perspective, as the fund maintained a slightly longer duration posture over the reporting period. This fund also remains allocated largely in the corporate and U.S. agency markets, a bias which should continue over the near term.
1 Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.
2 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.
October 31, 2000 (unaudited)
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
ASSET-BACKED SECURITIES--2.2% |
|
|
|
|
|
|
|
Home Equity Loan--0.6% |
|
|
|
|
$ |
2,000,000 |
|
New Century Home Equity Loan Trust 1997-NC5, Class M2, 7.24%, 10/25/2028 |
|
$ |
1,915,624 |
|
|
||||||
|
|
|
|
Credit Card--0.1% |
|
|
|
|
|
500,000 |
|
Discover Card Trust 1996-3, Class B, 6.25%, 8/18/2008 |
|
|
481,862 |
|
|
||||||
|
|
|
|
Structured Product (Abs)--0.9% |
|
|
|
|
|
2,000,000 |
1 |
125 Home Loan Owner Trust 1998-1A, Class M2, 7.75%, 2/15/2029 |
|
|
1,964,062 |
|
|
500,000 |
|
Residential Funding Corp. 1993-S26, Class A10, 7.50%, 7/25/2023 |
|
|
487,425 |
|
|
300,000 |
|
Residential Funding Corp. 1993-S31, Class A7, 7.00%, 9/25/2023 |
|
|
283,119 |
|
|
30,654 |
|
The Money Store Home Equity Trust 1992-B, Class A, 6.90%, 7/15/2007 |
|
|
30,576 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,765,182 |
|
|
||||||
|
|
|
|
Utilities--0.6% |
|
|
|
|
|
2,000,000 |
|
California Infrastructure & Economic Development Bank Special Purpose Trust PG&E-1, (Series 1997-1), Class A8, 6.48%, 12/26/2009 |
|
|
1,948,300 |
|
|
||||||
|
|
|
|
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $7,314,925) |
|
|
7,110,968 |
|
|
||||||
|
|
|
|
COLLATERALIZED MORTGAGE OBLIGATIONS--0.0% |
|
|
|
|
|
|
|
Structured Product (Abs)--0.0% |
|
|
|
|
|
20,364 |
|
Prudential Bache CMO Trust (Series 8), Class F, 7.965%, 3/1/2019 (identified cost $21,516) |
|
|
20,239 |
|
|
||||||
|
|
|
|
CORPORATE BONDS--66.8% |
|
|
|
|
|
|
|
Aerospace & Defense--0.4% |
|
|
|
|
|
1,100,000 |
|
Lockheed Martin Corp., Note, 8.20%, 12/1/2009 |
|
|
1,156,276 |
|
|
||||||
|
|
|
|
Air Transportation--1.6% |
|
|
|
|
|
226,202 |
|
Continental Airlines, Inc., Pass Thru Cert., 7.73%, 3/15/2011 |
|
|
226,365 |
|
|
1,567,361 |
|
Continental Airlines, Inc., Pass Thru Cert., (Series 1997-4B), 6.90%, 1/2/2017 |
|
|
1,474,480 |
|
|
1,150,000 |
|
Delta Air Lines, Inc., Note, 8.30%, 12/15/2029 |
|
|
987,965 |
|
|
900,000 |
|
Northwest Airlines Corp., Equip. Trust, 8.072%, 10/1/2019 |
|
|
933,192 |
|
|
425,000 |
|
Southwest Airlines Co., Deb., 7.375%, 3/1/2027 |
|
|
398,752 |
|
|
1,150,000 |
|
United Air Lines, Pass Thru Cert., 7.73%, 7/1/2010 |
|
|
1,174,472 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
5,195,226 |
|
|
||||||
|
|
|
|
Automobile--0.9% |
|
|
|
|
|
1,850,000 |
|
Dana Corp., Note, 6.25%, 3/1/2004 |
|
|
1,716,707 |
|
|
1,460,000 |
|
Hertz Corp., Sr. Note, 7.00%, 1/15/2028 |
|
|
1,255,585 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,972,292 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Banking--7.4% |
|
|
|
|
$ |
1,250,000 |
|
ABN-AMRO Bank NV, Chicago, Sub. Deb., 7.30%, 12/1/2026 |
|
$ |
1,169,850 |
|
|
220,000 |
|
Bank One Corp., Sub. Note, 7.25%, 8/1/2002 |
|
|
220,992 |
|
|
100,000 |
|
Bank One Corp., Sub. Deb., 7.25%, 8/15/2004 |
|
|
99,951 |
|
|
250,000 |
|
Bank One Corp., Sr. Note, 8.10%, 3/1/2002 |
|
|
253,032 |
|
|
200,000 |
|
BankAmerica Corp., Sub. Note, 7.75%, 7/15/2002 |
|
|
202,602 |
|
|
200,000 |
|
BankAmerica Corp., Sub. Note, 8.375%, 3/15/2002 |
|
|
203,328 |
|
|
2,000,000 |
|
Banco Santander Central Hispano, SA, Bank Guarantee, 7.875%, 4/15/2005 |
|
|
2,039,720 |
|
|
1,685,000 |
1 |
Barclays Bank PLC, Bond, 8.55%, 9/29/2049 |
|
|
1,698,763 |
|
|
2,200,000 |
|
Barclays North America, Deb., 9.75%, 5/15/2021 |
|
|
2,335,212 |
|
|
10,000 |
|
Boatmen's Bancshares, Inc., Sub. Note, 9.25%, 11/1/2001 |
|
|
10,206 |
|
|
30,000 |
|
Central Fidelity Banks, Inc., Sub. Note, 8.15%, 11/15/2002 |
|
|
30,666 |
|
|
1,000,000 |
|
Chase Manhattan Corp., Sub. Note, 6.375%, 2/15/2008 |
|
|
931,360 |
|
|
2,000,000 |
|
City National Bank, Sub. Note, 6.375%, 1/15/2008 |
|
|
1,796,068 |
|
|
40,000 |
|
Corestates Capital Corp., Sub. Note, 5.875%, 10/15/2003 |
|
|
38,430 |
|
|
1,000,000 |
1 |
Den Danske Bank Group, Note, 7.40%, 6/15/2010 |
|
|
987,770 |
|
|
30,000 |
|
First Union Corp., Sub. Note, 8.00%, 11/15/2002 |
|
|
30,593 |
|
|
30,000 |
|
HSBC USA, Inc., Sub. Note, 8.25%, 11/1/2001 |
|
|
30,301 |
|
|
1,000,000 |
|
J.P. Morgan & Co., Inc., Sub. Note, 6.70%, 11/1/2007 |
|
|
950,960 |
|
|
3,800,000 |
|
National Bank of Canada, Montreal, Sub. Note, 8.125%, 8/15/2004 |
|
|
3,947,858 |
|
|
15,000 |
|
NationsBank Corp., Sub. Note, 7.625%, 4/15/2005 |
|
|
15,214 |
|
|
1,000,000 |
|
NationsBank Corp., Sub. Note, (Series MTNF), 7.19%, 7/30/2012 |
|
|
952,310 |
|
|
715,000 |
|
PNC Funding Corp., Sub. Note, 6.875%, 7/15/2007 |
|
|
682,081 |
|
|
4,000,000 |
1 |
Regional Diversified Funding, Sr. Note, 9.25%, 3/15/2030 |
|
|
3,906,196 |
|
|
200,000 |
|
SunTrust Bank, Inc., Sub. Note, 6.90%, 7/1/2007 |
|
|
194,212 |
|
|
255,000 |
|
SunTrust Bank, Inc., Note, 7.375%, 7/1/2002 |
|
|
256,581 |
|
|
15,000 |
|
SunTrust Bank, Inc., Sub. Note, 6.125%, 2/15/2004 |
|
|
14,500 |
|
|
1,000,000 |
1 |
Swedbank, Sub., 7.50%, 11/29/2049 |
|
|
954,087 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
23,952,843 |
|
|
||||||
|
|
|
|
Beverage & Tobacco--1.0% |
|
|
|
|
|
2,000,000 |
|
Anheuser-Busch Cos., Inc., Sr. Note, 7.10%, 6/15/2007 |
|
|
2,007,360 |
|
|
100,000 |
|
Anheuser-Busch Cos., Inc., Unsecd. Note, 6.90%, 10/1/2002 |
|
|
100,197 |
|
|
100,000 |
|
Philip Morris Cos., Inc., Note, 7.625%, 5/15/2002 |
|
|
99,953 |
|
|
1,000,000 |
|
Philip Morris Cos., Inc., Unsecd. Note, 9.00%, 1/1/2001 |
|
|
1,001,640 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
3,209,150 |
|
|
||||||
|
|
|
|
Broadcast Radio & TV--1.0% |
|
|
|
|
|
3,100,000 |
|
Clear Channel Communications, Inc., 7.65%, 9/15/2010 |
|
|
3,050,400 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Cable Television--1.9% |
|
|
|
|
$ |
3,500,000 |
|
Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 |
|
$ |
3,773,910 |
|
|
2,250,000 |
|
Cox Communications, Inc., MTN, 6.69%, 9/20/2004 |
|
|
2,193,210 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
5,967,120 |
|
|
||||||
|
|
|
|
Chemicals & Plastics--0.6% |
|
|
|
|
|
1,500,000 |
1 |
Bayer Corp., Deb., 6.50%, 10/1/2002 |
|
|
1,495,020 |
|
|
40,000 |
|
Du Pont (E.I.) de Nemours & Co., Note, 8.125%, 3/15/2004 |
|
|
41,400 |
|
|
750,000 |
1 |
Fertinitro Finance, Company Guarantee, 8.29%, 4/1/2020 |
|
|
511,326 |
|
|
30,000 |
|
PPG Industries, Inc., Note, 6.50%, 11/1/2007 |
|
|
28,992 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,076,738 |
|
|
||||||
|
|
|
|
Conglomerates--0.3% |
|
|
|
|
|
750,000 |
|
Loews Corp., Deb., 8.875%, 4/15/2011 |
|
|
790,185 |
|
|
||||||
|
|
|
|
Consumer Products--0.8% |
|
|
|
|
|
2,250,000 |
|
Alberto-Culver Co., Unsecd. Note, 8.25%, 11/1/2005 |
|
|
2,313,112 |
|
|
100,000 |
|
Hershey Foods Corp., Note, 6.70%, 10/1/2005 |
|
|
99,282 |
|
|
300,000 |
|
Sara Lee Corp., Sr. Note, 6.00%, 1/15/2008 |
|
|
276,909 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,689,303 |
|
|
||||||
|
|
|
|
Ecological Services & Equipment--1.5% |
|
|
|
|
|
2,500,000 |
|
USA Waste Services, Inc., Sr. Note, 7.00%, 10/1/2004 |
|
|
2,369,600 |
|
|
425,000 |
|
USA Waste Services, Inc., Sr. Note, 7.125%, 10/1/2007 |
|
|
390,732 |
|
|
2,000,000 |
|
WMX Technologies, Inc., Deb., 8.75%, 5/1/2018 |
|
|
1,938,300 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
4,698,632 |
|
|
||||||
|
|
|
|
Education--1.4% |
|
|
|
|
|
3,425,000 |
|
Boston University, MTN, 7.625%, 7/15/2097 |
|
|
3,116,955 |
|
|
1,450,000 |
|
Columbia University, MTN, 8.62%, 2/21/2001 |
|
|
1,456,742 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
4,573,697 |
|
|
||||||
|
|
|
|
Electronics--0.6% |
|
|
|
|
|
1,500,000 |
|
General Electric Financial Services, Inc., MTN, 9.18%, 12/30/2008 |
|
|
1,712,415 |
|
|
225,000 |
|
General Electric Financial Services, Inc., Sr. Note, 6.29%, 12/15/2001 |
|
|
223,831 |
|
|
15,000 |
|
Rockwell International Corp., Unsecd. Note, 6.625%, 6/1/2005 |
|
|
14,768 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,951,014 |
|
|
||||||
|
|
|
|
Finance - Automotive--2.0% |
|
|
|
|
|
2,100,000 |
|
Ford Capital BV, Note, 9.375%, 5/15/2001 |
|
|
2,125,368 |
|
|
100,000 |
|
Ford Motor Credit Co., Note, 6.625%, 6/30/2003 |
|
|
98,345 |
|
|
250,000 |
|
Ford Motor Credit Co., Note, 7.50%, 4/25/2011 |
|
|
243,837 |
|
|
35,000 |
|
Ford Motor Credit Co., Note, 7.75%, 3/15/2005 |
|
|
35,508 |
|
|
100,000 |
|
Ford Motor Credit Co., Unsecd. Note, 8.00%, 6/15/2002 |
|
|
101,187 |
|
|
1,000,000 |
|
Ford Motor Credit Co., Unsub., 6.875%, 6/5/2001 |
|
|
997,960 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Finance - Automotive--continued |
|
|
|
|
$ |
1,500,000 |
|
General Motors Acceptance Corp., MTN, 7.50%, 7/15/2005 |
|
$ |
1,512,405 |
|
|
155,000 |
|
General Motors Acceptance Corp., Note, 7.00%, 9/15/2002 |
|
|
154,974 |
|
|
1,170,000 |
|
General Motors Acceptance Corp., Sr. Note, 5.75%, 11/10/2003 |
|
|
1,131,577 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
6,401,161 |
|
|
||||||
|
|
|
|
Finance - Retail--0.1% |
|
|
|
|
|
50,000 |
|
Commercial Credit Co., Note, 5.55%, 2/15/2001 |
|
|
49,811 |
|
|
100,000 |
|
Household Finance Corp., Note, 6.125%, 8/15/2003 |
|
|
97,381 |
|
|
100,000 |
|
Household Finance Corp., Note, 7.00%, 9/15/2002 |
|
|
99,911 |
|
|
100,000 |
|
Household Finance Corp., Sr. Note, 7.25%, 8/15/2002 |
|
|
100,030 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
347,133 |
|
|
||||||
|
|
|
|
Financial Intermediaries--5.0% |
|
|
|
|
|
4,000,000 |
|
Amvescap PLC, Sr. Note, 6.60%, 5/15/2005 |
|
|
3,841,240 |
|
|
1,000,000 |
|
Donaldson, Lufkin and Jenrette Securities Corp., Sr. Note, 6.50%, 6/1/2008 |
|
|
938,600 |
|
|
2,575,000 |
|
Lehman Brothers Holdings, Inc., 7.875%, 8/15/2010 |
|
|
2,564,442 |
|
|
175,000 |
|
Lehman Brothers Holdings, Inc., Bond, 7.00%, 5/15/2003 |
|
|
173,472 |
|
|
625,000 |
|
Lehman Brothers Holdings, Inc., Note, 6.90%, 1/29/2001 |
|
|
623,956 |
|
|
1,575,000 |
|
Lehman Brothers, Inc., Sr. Sub. Note, 7.375%, 1/15/2007 |
|
|
1,544,965 |
|
|
1,625,000 |
|
Marsh & McLennan Cos., Inc., Sr. Note, 7.125%, 6/15/2009 |
|
|
1,583,530 |
|
|
1,000,000 |
|
Merrill Lynch & Co., Inc., MTN, 7.20%, 10/15/2012 |
|
|
951,690 |
|
|
500,000 |
|
Merrill Lynch & Co., Inc., Note, 6.875%, 3/1/2003 |
|
|
499,860 |
|
|
15,000 |
|
Merrill Lynch & Co., Inc., Note, 7.375%, 5/15/2006 |
|
|
15,143 |
|
|
100,000 |
|
Merrill Lynch & Co., Inc., Note, 8.30%, 11/1/2002 |
|
|
102,645 |
|
|
1,000,000 |
|
Merrill Lynch & Co., Inc., Note, (Series MTNB), 7.19%, 8/7/2012 |
|
|
944,000 |
|
|
920,000 |
|
Morgan Stanley Group, Inc., Deb., 9.375%, 6/15/2001 |
|
|
931,620 |
|
|
50,000 |
|
Pitney Bowes Credit Corp., Unsecd. Note, 8.80%, 2/15/2003 |
|
|
52,105 |
|
|
100,000 |
|
Salomon Smith Barney Holdings, Inc., Note, Series C, 7.15%, 2/15/2003 |
|
|
100,132 |
|
|
100,000 |
|
Salomon Smith Barney Holdings, Inc., Unsecd. Note, (Series MTNG), 6.35%, 1/15/2004 |
|
|
98,011 |
|
|
5,000 |
|
Salomon, Inc., Note, 6.375%, 10/1/2004 |
|
|
4,891 |
|
|
10,000 |
|
Salomon, Inc., Note, 6.625%, 11/15/2003 |
|
|
9,932 |
|
|
200,000 |
|
Salomon, Inc., Sr. Note, 6.80%, 4/15/2003 |
|
|
199,347 |
|
|
30,000 |
|
Wells Fargo & Co., Note, 5.75%, 2/1/2003 |
|
|
29,304 |
|
|
910,874 |
1 |
World Financial, Pass Thru Cert., (Series 96 WFP-B), 6.91%, 9/1/2013 |
|
|
882,907 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
16,091,792 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Financial Services--1.0% |
|
|
|
|
$ |
3,000,000 |
|
General Electric Capital Corp., MTN, 6.65%, 9/3/2002 |
|
$ |
2,997,690 |
|
|
10,000 |
|
Paccar Financial Corp., Sr. Note, 6.18%, 2/15/2001 |
|
|
9,967 |
|
|
100,000 |
|
U.S. Leasing International, Unsecd. Note, 6.625%, 5/15/2003 |
|
|
98,862 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
3,106,519 |
|
|
||||||
|
|
|
|
Food & Drug Retailers--0.8% |
|
|
|
|
|
2,000,000 |
|
Kroger Co., Inc., 7.25%, 6/1/2009 |
|
|
1,934,380 |
|
|
500,000 |
|
Meyer (Fred), Inc., Company Guarantee, 7.45%, 3/1/2008 |
|
|
492,210 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
2,426,590 |
|
|
||||||
|
|
|
|
Food Products--0.1% |
|
|
|
|
|
5,000 |
|
Grand Metropolitan Investment Corp., 9.00%, 8/15/2011 |
|
|
5,552 |
|
|
300,000 |
|
Kraft General Foods, Inc., Deb., 6.00%, 6/15/2001 |
|
|
296,523 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
302,075 |
|
|
||||||
|
|
|
|
Forest Products--1.5% |
|
|
|
|
|
1,500,000 |
|
Donohue Forest Products, 7.625%, 5/15/2007 |
|
|
1,501,680 |
|
|
1,000,000 |
|
Fort James Corp., Deb., 8.375%, 11/15/2001 |
|
|
1,004,200 |
|
|
300,000 |
|
Fort James Corp., Sr. Note, 6.234%, 3/15/2001 |
|
|
298,842 |
|
|
310,000 |
|
Fort James Corp., Sr. Note, 7.65%, 12/26/2000 |
|
|
310,449 |
|
|
1,000,000 |
|
Quno Corp., Sr. Note, 9.125%, 5/15/2005 |
|
|
1,054,020 |
|
|
25,000 |
|
Union Camp Corp., Note, 6.50%, 11/15/2007 |
|
|
23,531 |
|
|
750,000 |
|
Westvaco Corp., Deb., 7.75%, 2/15/2023 |
|
|
718,207 |
|
|
25,000 |
|
Weyerhaeuser Co., Deb., 9.05%, 2/1/2003 |
|
|
25,918 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
4,936,847 |
|
|
||||||
|
|
|
|
Health Services--0.3% |
|
|
|
|
|
1,000,000 |
|
Aetna Services, Inc., Company Guarantee, 6.75%, 8/15/2001 |
|
|
993,300 |
|
|
||||||
|
|
|
|
Industrial Products & Equipment--0.0% |
|
|
|
|
|
10,000 |
|
Air Products & Chemicals, Inc., Note, 7.375%, 5/1/2005 |
|
|
10,008 |
|
|
25,000 |
|
Ingersoll-Rand Co., Note, 6.51%, 12/1/2004 |
|
|
24,531 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
34,539 |
|
|
||||||
|
|
|
|
Insurance--5.0% |
|
|
|
|
|
500,000 |
|
CIGNA Corp., Sr. Note, 7.40%, 1/15/2003 |
|
|
497,565 |
|
|
1,975,000 |
|
Continental Corp., Unsecd. Note, 7.25%, 3/1/2003 |
|
|
1,940,477 |
|
|
1,500,000 |
|
Delphi Financial Group, Inc., Note, 8.00%, 10/1/2003 |
|
|
1,489,020 |
|
|
4,200 |
|
Equitable Cos., Inc., Sr. Note, 6.75%, 12/1/2000 |
|
|
4,197 |
|
|
2,000,000 |
1 |
Equitable Life, Note, 7.70%, 12/1/2015 |
|
|
1,894,420 |
|
|
4,000,000 |
|
GEICO Corp., Deb., 9.15%, 9/15/2021 |
|
|
4,226,520 |
|
|
25,000 |
|
ITT Hartford Group, Inc., Note, 8.30%, 12/1/2001 |
|
|
25,263 |
|
|
15,000 |
|
Lincoln National Corp., Note, 7.625%, 7/15/2002 |
|
|
15,021 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Insurance--continued |
|
|
|
|
$ |
250,000 |
|
MBIA Insurance Corp., Deb., 9.00%, 2/15/2001 |
|
$ |
250,955 |
|
|
900,000 |
|
Provident Cos., Inc., Bond, 7.405%, 3/15/2038 |
|
|
668,439 |
|
|
2,000,000 |
1 |
Reinsurance Group of America, Sr. Note, 7.25%, 4/1/2006 |
|
|
1,935,704 |
|
|
1,000,000 |
|
St. Paul Cos., Inc., MTN, (Series MTNB), 7.29%, 8/28/2007 |
|
|
989,140 |
|
|
2,150,000 |
1 |
Union Central Life Insurance Co., Note, 8.20%, 11/1/2026 |
|
|
2,085,973 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
16,022,694 |
|
|
||||||
|
|
|
|
Leisure & Entertainment--2.4% |
|
|
|
|
|
3,900,000 |
|
International Speedway Corp., 7.875%, 10/15/2004 |
|
|
3,832,491 |
|
|
800,000 |
|
Paramount Communications, Inc., Sr. Note, 7.50%, 1/15/2002 |
|
|
803,960 |
|
|
3,200,000 |
|
Viacom, Inc., Sr. Deb., 8.25%, 8/1/2022 |
|
|
3,133,440 |
|
|
40,000 |
|
Walt Disney Co., Bond, 6.375%, 3/30/2001 |
|
|
39,918 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
7,809,809 |
|
|
||||||
|
|
|
|
Metals & Mining--2.2% |
|
|
|
|
|
3,000,000 |
|
Barrick Gold Corp., Deb., 7.50%, 5/1/2007 |
|
|
2,964,330 |
|
|
2,405,000 |
|
Noranda, Inc., Deb., 8.125%, 6/15/2004 |
|
|
2,434,101 |
|
|
875,000 |
|
Noranda, Inc., Deb., 8.625%, 7/15/2002 |
|
|
887,679 |
|
|
750,000 |
|
Placer Dome, Inc., Bond, 8.50%, 12/31/2045 |
|
|
662,681 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
6,948,791 |
|
|
||||||
|
|
|
|
Oil & Gas--6.2% |
|
|
|
|
|
1,000,000 |
|
Apache Finance Properties Ltd., Sr. Note, 7.00%, 3/15/2009 |
|
|
983,150 |
|
|
10,000 |
|
Atlantic Richfield Co., Deb., 9.125%, 3/1/2011 |
|
|
11,522 |
|
|
1,250,000 |
|
Enterprise Oil, Sr. Note, 7.00%, 5/1/2018 |
|
|
1,138,025 |
|
|
1,000,000 |
|
Global Marine, Inc., Sr. Note, 7.125%, 9/1/2007 |
|
|
980,450 |
|
|
3,300,000 |
|
Husky Oil Ltd., Deb., 7.55%, 11/15/2016 |
|
|
3,133,911 |
|
|
750,000 |
|
Husky Oil Ltd., Sr. Note, 7.125%, 11/15/2006 |
|
|
731,303 |
|
|
3,250,000 |
1 |
Pemex Finance Ltd., 9.03%, 2/15/2011 |
|
|
3,279,738 |
|
|
1,000,000 |
|
Sun Co., Inc., 9.00%, 11/1/2024 |
|
|
1,064,150 |
|
|
2,450,000 |
|
Tosco Corp., 8.125%, 2/15/2030 |
|
|
2,507,085 |
|
|
1,000,000 |
|
USX Corp., Deb., 9.375%, 5/15/2022 |
|
|
1,147,200 |
|
|
1,000,000 |
|
Union Pacific Resources Group, Inc., Unsecd. Note, 7.00%, 10/15/2006 |
|
|
986,670 |
|
|
1,000,000 |
|
Williams Cos., Inc. (The), Unsecd. Note, 6.50%, 12/1/2008 |
|
|
928,890 |
|
|
3,150,000 |
1 |
Yosemite Securities Trust I, Bond, 8.25%, 11/15/2004 |
|
|
3,216,056 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
20,108,150 |
|
|
||||||
|
|
|
|
Pharmaceutical--0.1% |
|
|
|
|
|
250,000 |
|
American Home Products Corp., Note, 7.90%, 2/15/2005 |
|
|
257,105 |
|
|
100,000 |
|
Lilly (Eli) & Co., Unsecd. Note, 6.25%, 3/15/2003 |
|
|
99,101 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
356,206 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Printing & Publishing--1.7% |
|
|
|
|
$ |
2,200,000 |
|
Harcourt General, Inc., Sr. Note, 6.70%, 8/1/2007 |
|
$ |
2,038,740 |
|
|
3,250,000 |
|
News America Holdings, Inc., 10.125%, 10/15/2012 |
|
|
3,519,328 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
5,558,068 |
|
|
||||||
|
|
|
|
Rail Industry--0.5% |
|
|
|
|
|
869,539 |
|
Atchison Topeka & SF RR, Equip. Trust, 6.55%, 1/6/2013 |
|
|
815,115 |
|
|
947,604 |
|
Burlington Northern Santa Fe, Pass Thru Cert., 7.57%, 1/2/2021 |
|
|
931,599 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,746,714 |
|
|
||||||
|
|
|
|
Real Estate--0.2% |
|
|
|
|
|
900,000 |
|
Storage USA, Deb., 7.50%, 12/1/2027 |
|
|
740,925 |
|
|
||||||
|
|
|
|
Retailers--6.0% |
|
|
|
|
|
3,000,000 |
|
Dayton-Hudson Corp., Deb., 10.00%, 12/1/2000 |
|
|
3,007,770 |
|
|
350,000 |
|
Dayton-Hudson Corp., Deb., 8.50%, 12/1/2022 |
|
|
348,418 |
|
|
15,000 |
|
Dillard Investment, Deb., 9.25%, 2/1/2001 |
|
|
15,003 |
|
|
2,500,000 |
|
Federated Department Stores, Inc., Sr. Note, 10.00%, 2/15/2001 |
|
|
2,514,950 |
|
|
500,000 |
|
May Department Stores Co., Deb., 9.875%, 6/15/2021 |
|
|
530,845 |
|
|
3,000,000 |
|
Safeway, Inc., Note, 7.25%, 9/15/2004 |
|
|
2,993,940 |
|
|
2,000,000 |
|
Sears, Roebuck & Co., MTN, 10.00%, 2/3/2012 |
|
|
2,237,780 |
|
|
3,000,000 |
|
TJX Cos., Inc., 7.45%, 12/15/2009 |
|
|
2,925,990 |
|
|
1,750,000 |
|
Target Corp., 7.50%, 2/15/2005 |
|
|
1,768,533 |
|
|
50,000 |
|
Wal-Mart Stores, Inc., Note, 8.625%, 4/1/2001 |
|
|
50,343 |
|
|
2,850,000 |
|
Wal-Mart Stores, Inc., Sr. Unsecd. Note, 6.875%, 8/10/2009 |
|
|
2,835,351 |
|
|
200,000 |
|
Wal-Mart Stores, Inc., Unsecd. Note, 6.50%, 6/1/2003 |
|
|
199,458 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
19,428,381 |
|
|
||||||
|
|
|
|
Services--0.1% |
|
|
|
|
|
500,000 |
|
Olsten Corp., Sr. Note, 7.00%, 3/15/2006 |
|
|
463,185 |
|
|
||||||
|
|
|
|
Sovereign Finance-Retail--0.4% |
|
|
|
|
|
200,000 |
1 |
Korea Development Bank, 7.625%, 10/1/2002 |
|
|
199,333 |
|
|
1,200,000 |
|
Korea Development Bank, Sr. Unsub., 6.50%, 11/15/2002 |
|
|
1,166,352 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,365,685 |
|
|
||||||
|
|
|
|
Sovereign Government--1.0% |
|
|
|
|
|
1,000,000 |
|
Quebec, Province of, Deb., 9.125%, 8/22/2001 |
|
|
1,013,012 |
|
|
1,000,000 |
|
Sweden, Government of, Deb., 10.25%, 11/1/2015 |
|
|
1,231,810 |
|
|
1,000,000 |
|
Victoria Public Authority, Local Gov't. Guarantee, 8.25%, 1/15/2002 |
|
|
1,007,866 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
3,252,688 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Supranational--0.6% |
|
|
|
|
$ |
750,000 |
|
Corp Andina De Fomento, 8.875%, 6/1/2005 |
|
$ |
786,173 |
|
|
1,100,000 |
|
Corp Andina De Fomento, Sr. Note, 7.75%, 3/1/2004 |
|
|
1,106,897 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,893,070 |
|
|
||||||
|
|
|
|
Technology Services--1.4% |
|
|
|
|
|
115,000 |
|
International Business Machines Corp., 7.25%, 11/1/2002 |
|
|
116,122 |
|
|
500,000 |
|
International Business Machines Corp., Note, 6.45%, 8/1/2007 |
|
|
487,240 |
|
|
3,750,000 |
|
Unisys Corp., Sr. Note, 11.75%, 10/15/2004 |
|
|
3,928,125 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
4,531,487 |
|
|
||||||
|
|
|
|
Telecommunications & Cellular--5.4% |
|
|
|
|
|
250,000 |
|
Bell Atlantic-New Jersey, Deb., 5.875%, 2/1/2004 |
|
|
241,450 |
|
|
1,850,000 |
|
BellSouth Telecommunications, Inc., Note, 6.00%, 6/15/2002 |
|
|
1,821,288 |
|
|
3,100,000 |
|
CenturyTel, Inc., 8.375%, 10/15/2010 |
|
|
3,079,633 |
|
|
15,000 |
|
Chesapeake & Potomac Telephone Co. of VA, Deb., 6.75%, 5/1/2008 |
|
|
14,461 |
|
|
50,000 |
|
Chesapeake & Potomac Telephone Co. of Washington D.C., Deb., 7.00%, 2/1/2009 |
|
|
48,950 |
|
|
2,800,000 |
|
Deutsche Telekom AG, Global Bond, 8.25%, 6/15/2030 |
|
|
2,880,612 |
|
|
100,000 |
|
GTE Southwest, Inc., Deb., 6.54%, 12/1/2005 |
|
|
97,618 |
|
|
410,000 |
|
Lucent Technologies, Inc., Note, 6.90%, 7/15/2001 |
|
|
408,594 |
|
|
650,000 |
|
MetroNet Communications Corp., Sr. Note, 12.00%, 8/15/2007 |
|
|
724,750 |
|
|
2,000,000 |
|
MetroNet Escrow Corp., Sr. Note, 10.625%, 11/1/2008 |
|
|
2,215,000 |
|
|
15,000 |
|
New England Telephone & Telegraph, Deb., 6.125%, 10/1/2006 |
|
|
14,095 |
|
|
800,000 |
|
New England Telephone & Telegraph, Deb., 8.625%, 8/1/2001 |
|
|
806,840 |
|
|
100,000 |
|
New York Telephone Co., Unsecd. Note, 6.25%, 2/15/2004 |
|
|
97,527 |
|
|
115,000 |
|
Ohio Bell Telephone Co., Unsecd. Note, 6.125%, 5/15/2003 |
|
|
113,289 |
|
|
2,000,000 |
|
Sprint Capital Corp., 6.375%, 5/1/2009 |
|
|
1,804,960 |
|
|
3,125,000 |
|
Telecom de Puerto Rico, Note, 6.65%, 5/15/2006 |
|
|
2,978,344 |
|
|
15,000 |
|
Verizon Communications, Deb., 6.75%, 5/1/2008 |
|
|
14,598 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
17,362,009 |
|
|
||||||
|
|
|
|
Utilities--3.4% |
|
|
|
|
|
250,000 |
|
Consolidated Edison Co., Deb., (Series 92B), 7.625%, 3/1/2004 |
|
|
253,350 |
|
|
1,600,000 |
|
Edison Mission Holding Co., Sr. Secd. Note, 8.734%, 10/1/2026 |
|
|
1,622,165 |
|
|
1,250,000 |
|
Enersis SA, Note, 7.40%, 12/1/2016 |
|
|
1,069,700 |
|
|
1,000,000 |
|
Gulf States Utilities, 1st Mtg. Bond, (Series 2005B), 6.77%, 8/1/2005 |
|
|
977,410 |
|
|
3,100,000 |
1 |
Israel Electric Corp. Ltd., 8.25%, 10/15/2009 |
|
|
2,997,421 |
|
|
1,500,000 |
1 |
Israel Electric Corp. Ltd., Sr. Note, 7.875%, 12/15/2026 |
|
|
1,326,690 |
|
|
400,000 |
1 |
Israel Electric Corp. Ltd., Sr. Secd. Note, 7.75%, 3/1/2009 |
|
|
375,740 |
|
|
100,000 |
|
Louisiana Power & Light Co., 1st Mtg. Bond, 7.50%, 11/1/2002 |
|
|
99,948 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Utilities--continued |
|
|
|
|
$ |
30,000 |
|
Michigan Consolidated Gas, 1st Mtg. Bond, 6.80%, 6/15/2003 |
|
$ |
29,879 |
|
|
180,000 |
|
Minnesota Power and Light Co., 1st Mtg. Bond, 7.75%, 6/1/2007 |
|
|
177,462 |
|
|
25,000 |
|
Pacific Gas & Electric Co., 1st Ref. Mtg., 6.75%, 12/1/2000 |
|
|
24,999 |
|
|
1,000,000 |
|
Pacific Gas & Electric Co., Unsecd. Note, (Series B), 7.75%, 6/30/2004 |
|
|
1,016,360 |
|
|
100,000 |
|
Reliant Energy, Inc., Collateral Trust, (Series C), 6.50%, 4/21/2003 |
|
|
97,396 |
|
|
5,000 |
|
Sonat, Inc., Note, 6.875%, 6/1/2005 |
|
|
4,910 |
|
|
1,000,000 |
1 |
Tenaga Nasional Berhad, Deb., 7.50%, 1/15/2096 |
|
|
775,950 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
10,849,380 |
|
|
||||||
|
|
|
|
TOTAL CORPORATE BONDS (IDENTIFIED COST $219,673,784) |
|
|
215,360,074 |
|
|
||||||
|
|
|
|
U.S. GOVERNMENT AGENCIES--12.7% |
|
|
|
|
|
|
|
U.S. Government Agencies--12.7% |
|
|
|
|
|
100,000 |
|
Federal Home Loan Bank System, 6.00%, 6/30/2003 |
|
|
98,683 |
|
|
1,000,000 |
|
Federal Home Loan Bank System, 6.10%, 4/7/2003 |
|
|
990,160 |
|
|
1,000,000 |
|
Federal Home Loan Bank System, 6.11%, 4/17/2003 |
|
|
990,300 |
|
|
1,000,000 |
|
Federal Home Loan Bank System, 6.00%, 7/7/2004 |
|
|
982,280 |
|
|
1,000,000 |
|
Federal Home Loan Bank System, 6.14%, 5/11/2005 |
|
|
977,230 |
|
|
2,000,000 |
|
Federal Home Loan Bank System, 6.23%, 6/1/2005 |
|
|
1,959,740 |
|
|
1,750,000 |
|
Federal Home Loan Bank System, 6.00%, 5/17/2006 |
|
|
1,686,510 |
|
|
1,500,000 |
|
Federal Home Loan Bank System, 7.00%, 7/16/2009 |
|
|
1,479,570 |
|
|
1,000,000 |
|
Federal Home Loan Bank System, 7.00%, 12/15/2009 |
|
|
975,950 |
|
|
200,000 |
|
Federal Home Loan Bank System, Series BC01, 5.71%, 7/13/2001 |
|
|
198,638 |
|
|
4,000,000 |
|
Federal Home Loan Mortgage Corp., Deb., 6.22%, 3/18/2008 |
|
|
3,847,560 |
|
|
2,500,000 |
|
Federal Home Loan Mortgage Corp., Deb., 6.35%, 7/17/2008 |
|
|
2,400,825 |
|
|
2,500,000 |
|
Federal Home Loan Mortgage Corp., Deb., 8.05%, 4/5/2010 |
|
|
2,503,500 |
|
|
2,000,000 |
|
Federal Home Loan Mortgage Corp., Deb., 8.29%, 9/30/2009 |
|
|
2,015,720 |
|
|
1,333,000 |
|
Federal Home Loan Mortgage Corp., (Series 1228H), 7.00%, 2/15/2022 |
|
|
1,324,189 |
|
|
400,000 |
|
Federal Home Loan Mortgage Corp., (Series 1324VE), 7.00%, 8/15/2008 |
|
|
399,588 |
|
|
1,470,000 |
|
Federal Home Loan Mortgage Corp., (Series 1468M), 7.00%, 1/15/2010 |
|
|
1,458,784 |
|
|
1,000,000 |
|
Federal Home Loan Mortgage Corp., (Series 24), Class VB, 6.50%, 7/25/2010 |
|
|
959,620 |
|
|
500,000 |
|
Federal National Mortgage Association, 8.25%, 12/18/2000 |
|
|
501,095 |
|
|
150,000 |
|
Federal National Mortgage Association, MTN, 6.25%, 12/13/2002 |
|
|
149,220 |
|
|
1,650,000 |
|
Federal National Mortgage Association, MTN, 6.71%, 7/24/2001 |
|
|
1,650,033 |
|
|
1,500,000 |
|
Federal National Mortgage Association, MTN, (Series B), 7/9/2012 |
|
|
588,195 |
|
|
2,500,000 |
|
Federal National Mortgage Association, MTN, (Series MTN), 6.00%, 4/17/2006 |
|
|
2,422,100 |
|
|
1,000,000 |
|
Federal National Mortgage Association, (Series 1992-124), Class D, 7.00%, 4/25/2010 |
|
|
991,320 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
U.S. GOVERNMENT AGENCIES--continued |
|
|
|
|
|
|
|
U.S. Government Agencies--continued |
|
|
|
|
$ |
2,000,000 |
|
Federal National Mortgage Association, (Series 1993-139), Class KD, 7.00%, 7/25/2006 |
|
$ |
1,998,520 |
|
|
764,403 |
|
Federal National Mortgage Association, (Series 1994-79), Class G, 7.00%, 11/25/2004 |
|
|
764,342 |
|
|
1,000,000 |
|
Federal National Mortgage Association, (Series 1996-68), Class VC, 6.50%, 9/18/2010 |
|
|
959,610 |
|
|
1,000,000 |
|
Federal National Mortgage Association, (Series G93-31), Class H, 7.00%, 2/25/2013 |
|
|
975,100 |
|
|
4,000,000 |
|
Federal National Mortgage Association, Unsecd. Note, 6.65%, 11/7/2007 |
|
|
4,002,080 |
|
|
200,000 |
|
Federal National Mortgage Association, Unsecd. Note, 7.15%, 5/26/2004 |
|
|
199,490 |
|
|
500,000 |
|
Tennessee Valley Authority, 6.125%, 7/15/2003 |
|
|
491,150 |
|
|
||||||
|
|
|
|
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $41,879,556) |
|
|
40,941,102 |
|
|
||||||
|
|
|
|
MUNICIPALS--3.2% |
|
|
|
|
|
|
|
Education--0.4% |
|
|
|
|
|
1,100,000 |
|
Harvard University, Revenue Bonds, 8.125% Bonds, 4/15/2007 |
|
|
1,162,172 |
|
|
||||||
|
|
|
|
Municipal Services--2.8% |
|
|
|
|
|
1,250,000 |
|
Atlanta & Fulton County, GA, Recreation Authority, Taxable Revenue Bonds, (Series 1997), 7.00% Bonds (Downtown Arena Project)/(FSA INS), 12/1/2028 |
|
|
1,141,825 |
|
|
1,325,000 |
|
Kansas City, MO, Redevelopment Authority, 7.65% Bonds (FSA INS), 11/1/2018 |
|
|
1,323,596 |
|
|
2,000,000 |
|
McKeesport, PA, Taxable GO (Series B) 1997, 7.30% Bonds (MBIA INS), 3/1/2020 |
|
|
1,916,080 |
|
|
1,000,000 |
|
Miami Florida Revenue Pension Obligation, 7.20% Bonds (AMBAC INS), 12/1/2025 |
|
|
934,900 |
|
|
1,500,000 |
|
Minneapolis/St. Paul, MN, Airport Commission, UT GO Taxable Revenue Bonds (Series 9), 8.95% Bonds, 1/1/2022 |
|
|
1,592,880 |
|
|
1,000,000 |
|
Pittsburgh, PA, Urban Redevelopment Authority, 9.07% Bonds (CGIC GTD), 9/1/2014 |
|
|
1,082,430 |
|
|
1,000,000 |
|
St. Johns County, FL, Convention Center, Taxable Municipal Revenue Bonds, 8.00% Bonds (FSA INS), 1/1/2026 |
|
|
1,014,180 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
9,005,891 |
|
|
||||||
|
|
|
|
TOTAL MUNICIPALS (IDENTIFIED COST $10,317,319) |
|
|
10,168,063 |
|
|
||||||
|
|
|
|
U.S. TREASURY--1.6% |
|
|
|
|
|
|
|
Treasury Securities--1.6% |
|
|
|
|
|
1,500,000 |
|
United States Treasury Bond, 6.25%, 5/15/2030 |
|
|
1,597,965 |
|
|
3,500,000 |
|
United States Treasury Note, 6.75%, 5/15/2005 |
|
|
3,629,080 |
|
|
||||||
|
|
|
|
TOTAL U.S. TREASURY (IDENTIFIED COST $5,233,633) |
|
|
5,227,045 |
|
|
||||||
|
|
|
|
PREFERRED STOCKS--1.3% |
|
|
|
|
|
|
|
Financial Intermediaries--1.0% |
|
|
|
|
|
70,000 |
|
Citigroup, Inc., Cumulative Pfd. |
|
|
3,163,125 |
|
|
||||||
|
Shares |
|
|
|
|
Value |
|
|
|
|
|
PREFERRED STOCKS--continued |
|
|
|
|
|
|
|
Telecommunications & Cellular--0.3% |
|
|
|
|
|
6,100 |
|
AT&T Corp., Pfd. |
|
$ |
143,731 |
|
|
40,000 |
|
AT&T Corp., Pfd., $2.50 |
|
|
1,012,500 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,156,231 |
|
|
||||||
|
|
|
|
TOTAL PREFERRED STOCKS (IDENTIFIED COST $4,560,940) |
|
|
4,319,356 |
|
|
||||||
|
|
|
|
MUTUAL FUNDS--11.5% |
|
|
|
|
|
3,547,152 |
|
Federated Mortgage Core Portfolio |
|
|
34,407,374 |
|
|
2,635,656 |
|
Prime Value Obligations Fund, Class IS |
|
|
2,635,656 |
|
|
||||||
|
|
|
|
TOTAL MUTUAL FUNDS (IDENTIFIED COST $37,089,947) |
|
|
37,043,030 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (IDENTIFIED COST $326,091,620)2 |
|
$ |
320,189,877 |
|
|
||||||
1 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $30,487,156 which represents 9.5% of net assets.
2 The cost of investments for federal tax purposes amounts to $326,091,620. The net unrealized depreciation of investments on a federal tax basis amounts to $5,901,743 which is comprised of $1,211,463 appreciation and $7,113,206 depreciation at October 31, 2000.
Note: The categories of investments are shown as a percentage of net assets ($322,407,826) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
CGIC |
--Capital Guaranty Insurance Corporation |
|
CMO |
--Collateralized Mortgage Obligation |
|
FSA |
--Financial Security Assurance |
|
GO |
--General Obligation |
|
GTD |
--Guaranteed |
|
INS |
--Insured |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MTN |
--Medium Term Note |
|
UT |
--Unlimited Tax |
See Notes which are an integral part of the Financial Statements
October 31, 2000 (unaudited)
|
Assets: |
|
|
|
|
|
|
|
|
Total investments in securities, at value (identified and tax cost $326,091,620) |
|
|
|
|
$ |
320,189,877 |
|
|
Income receivable |
|
|
|
|
|
5,508,292 |
|
|
Receivable for investments sold |
|
|
|
|
|
1,990,677 |
|
|
Receivable for shares sold |
|
|
|
|
|
152,472 |
|
|
|
|||||||
|
TOTAL ASSETS |
|
|
|
|
|
327,841,318 |
|
|
|
|||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
Payable for investments purchased |
|
$ |
3,614,367 |
|
|
|
|
|
Payable for shares redeemed |
|
|
4,500 |
|
|
|
|
|
Income distribution payable |
|
|
1,811,461 |
|
|
|
|
|
Accrued expenses |
|
|
3,164 |
|
|
|
|
|
|
|||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
5,433,492 |
|
|
|
|||||||
|
Net assets for 33,567,957 shares outstanding |
|
|
|
|
$ |
322,407,826 |
|
|
|
|||||||
|
Net Assets Consist of: |
|
|
|
|
|
|
|
|
Paid in capital |
|
|
|
|
$ |
335,163,574 |
|
|
Net unrealized depreciation of investments |
|
|
|
|
|
(5,901,743 |
) |
|
Accumulated net realized loss on investments |
|
|
|
|
|
(6,733,010 |
) |
|
Distributions in excess of net investment income |
|
|
|
|
|
(120,995 |
) |
|
|
|||||||
|
TOTAL NET ASSETS |
|
|
|
|
$ |
322,407,826 |
|
|
|
|||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
|
$290,629,834 ÷ 30,259,247 shares outstanding |
|
|
|
|
|
$9.60 |
|
|
|
|||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
|
$31,777,992 ÷ 3,308,710 shares outstanding |
|
|
|
|
|
$9.60 |
|
|
|
|||||||
See Notes which are an integral part of the Financial Statements
Six Months Ended October 31, 2000 (unaudited)
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
|
|
|
|
|
|
|
|
|
$ |
1,403,390 |
|
|
Interest |
|
|
|
|
|
|
|
|
|
|
10,432,076 |
|
|
|
||||||||||||
|
TOTAL INCOME |
|
|
|
|
|
|
|
|
|
|
11,835,466 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
803,594 |
|
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
121,021 |
|
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
10,286 |
|
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
18,805 |
|
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
4,661 |
|
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
6,590 |
|
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
1,768 |
|
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
49,984 |
|
|
|
|
|
|
Distribution services fee--Institutional Service Shares |
|
|
|
|
|
|
33,975 |
|
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
367,822 |
|
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
33,975 |
|
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
13,822 |
|
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
11,411 |
|
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
964 |
|
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
2,572 |
|
|
|
|
|
|
|
||||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
1,481,250 |
|
|
|
|
|
|
|
||||||||||||
|
Waivers and Reimbursements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(154,451 |
) |
|
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Institutional Service Shares |
|
|
(12,231 |
) |
|
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(367,822 |
) |
|
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(21,744 |
) |
|
|
|
|
|
|
|
|
|
Reimbursement of investment adviser fee |
|
|
(396 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
TOTAL WAIVERS AND REIMBURSEMENTS |
|
|
|
|
|
|
(556,644 |
) |
|
|
|
|
|
|
||||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
924,606 |
|
|
|
||||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
10,910,860 |
|
|
|
||||||||||||
|
Realized and Unrealized Gain (Loss) on Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized loss on investments |
|
|
|
|
|
|
|
|
|
|
(2,273,880 |
) |
|
Net change in unrealized depreciation of investments |
|
|
|
|
|
|
|
|
|
|
7,383,642 |
|
|
|
||||||||||||
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
|
|
|
|
5,109,762 |
|
|
|
||||||||||||
|
Change in net assets resulting from operations |
|
|
|
|
|
|
|
|
|
$ |
16,020,622 |
|
|
|
||||||||||||
See Notes which are an integral part of the Financial Statements
|
|
|
|
Six Months |
|
|
|
Year |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
10,910,860 |
|
|
$ |
19,392,792 |
|
|
Net realized loss on investments ($(2,273,880) and $(4,458,939), respectively, as computed for federal tax purposes) |
|
|
(2,273,880 |
) |
|
|
(4,458,939 |
) |
|
Net change in unrealized appreciation/depreciation |
|
|
7,383,642 |
|
|
|
(12,588,996 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS |
|
|
16,020,622 |
|
|
|
2,344,857 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(10,087,935 |
) |
|
|
(18,312,786 |
) |
|
Institutional Service Shares |
|
|
(896,457 |
) |
|
|
(1,040,735 |
) |
|
Distributions from net realized gains |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
-- |
|
|
|
(629,456 |
) |
|
Institutional Service Shares |
|
|
-- |
|
|
|
(35,010 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(10,984,392 |
) |
|
|
(20,017,987 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
43,385,451 |
|
|
|
119,391,787 |
|
|
Proceeds from shares issued in connection with the tax-free transfer of assets from Vermont National Bank, a Common Trust Fund |
|
|
-- |
|
|
|
3,849,562 |
|
|
Net asset value of shares issued in connection with the acquisition of CCB Bond Fund |
|
|
-- |
|
|
|
79,584,880 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
2,130,051 |
|
|
|
4,636,595 |
|
|
Cost of shares redeemed |
|
|
(40,946,652 |
) |
|
|
(110,015,628 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
4,568,850 |
|
|
|
97,447,196 |
|
|
|
||||||||
|
Change in net assets |
|
|
9,605,080 |
|
|
|
79,774,066 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
312,802,746 |
|
|
|
233,028,680 |
|
|
|
||||||||
|
End of period |
|
$ |
322,407,826 |
|
|
$ |
312,802,746 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
(For a Share Outstanding Throughout Each Period)
|
|
|
Six Months |
|
|
Year Ended April 30, |
|||||||||||||
|
|
|
10/31/2000 |
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 9.45 |
|
|
$10.07 |
|
|
$10.17 |
|
|
$ 9.79 |
|
|
$ 9.77 |
|
|
$ 9.55 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.33 |
|
|
0.62 |
|
|
0.60 |
|
|
0.63 |
|
|
0.63 |
|
|
0.66 |
|
|
Net realized and unrealized gain (loss) on investments |
|
0.15 |
|
|
(0.60 |
) |
|
(0.10 |
) |
|
0.38 |
|
|
0.03 |
|
|
0.22 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
0.48 |
|
|
0.02 |
|
|
0.50 |
|
|
1.01 |
|
|
0.66 |
|
|
0.88 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.33 |
) |
|
(0.62 |
) |
|
(0.60 |
) |
|
(0.63 |
) |
|
(0.63 |
) |
|
(0.66 |
) |
|
Distributions from net realized gain on investments |
|
-- |
|
|
(0.02 |
) |
|
(0.00 |
)1 |
|
-- |
|
|
(0.01 |
) |
|
-- |
|
|
|
||||||||||||||||||
|
TOTAL DISTRIBUTIONS |
|
(0.33 |
) |
|
(0.64 |
) |
|
(0.60 |
) |
|
(0.63 |
) |
|
(0.64 |
) |
|
(0.66 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 9.60 |
|
|
$ 9.45 |
|
|
$10.07 |
|
|
$10.17 |
|
|
$ 9.79 |
|
|
$ 9.77 |
|
|
|
||||||||||||||||||
|
Total Return2 |
|
5.14 |
% |
|
0.30 |
% |
|
5.03 |
% |
|
10.58 |
% |
|
7.00 |
% |
|
9.13 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
0.55 |
%3 |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
|
||||||||||||||||||
|
Net investment income |
|
6.81 |
%3 |
|
6.48 |
% |
|
5.87 |
% |
|
6.30 |
% |
|
6.48 |
% |
|
6.52 |
% |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement4 |
|
0.35 |
%3 |
|
0.37 |
% |
|
0.43 |
% |
|
0.47 |
% |
|
0.57 |
% |
|
0.85 |
% |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$290,630 |
|
$294,644 |
|
$219,824 |
|
$176,712 |
|
$121,307 |
|
$87,493 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
13 |
% |
|
54 |
% |
|
41 |
% |
|
44 |
% |
|
55 |
% |
|
66 |
% |
|
|
||||||||||||||||||
1 Amount represents less than $0.01 per share.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(For a Share Outstanding Throughout Each Period)
|
|
|
Six Months |
|
|
Year Ended April 30, |
|||||||||||||
|
|
|
10/31/2000 |
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 9.45 |
|
|
$10.07 |
|
|
$10.17 |
|
|
$ 9.79 |
|
|
$ 9.76 |
|
|
$ 9.55 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.32 |
|
|
0.60 |
|
|
0.58 |
|
|
0.61 |
|
|
0.61 |
|
|
0.63 |
|
|
Net realized and unrealized gain (loss) on investments |
|
0.15 |
|
|
(0.60 |
) |
|
(0.10 |
) |
|
0.38 |
|
|
0.04 |
|
|
0.21 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
0.47 |
|
|
0.00 |
|
|
0.48 |
|
|
0.99 |
|
|
0.65 |
|
|
0.84 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.32 |
) |
|
(0.60 |
) |
|
(0.58 |
) |
|
(0.61 |
) |
|
(0.61 |
) |
|
(0.63 |
) |
|
Distributions from net realized gain on investments |
|
-- |
|
|
(0.02 |
) |
|
(0.00 |
)1 |
|
-- |
|
|
(0.01 |
) |
|
-- |
|
|
|
||||||||||||||||||
|
TOTAL DISTRIBUTIONS |
|
(0.32 |
) |
|
(0.62 |
) |
|
(0.58 |
) |
|
(0.61 |
) |
|
(0.62 |
) |
|
(0.63 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 9.60 |
|
|
$ 9.45 |
|
|
$10.07 |
|
|
$10.17 |
|
|
$ 9.79 |
|
|
$ 9.76 |
|
|
|
||||||||||||||||||
|
Total Return2 |
|
5.01 |
% |
|
0.05 |
% |
|
4.77 |
% |
|
10.31 |
% |
|
6.73 |
% |
|
8.86 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
0.80 |
%3 |
|
0.80 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
|
||||||||||||||||||
|
Net investment income |
|
6.55 |
%3 |
|
6.24 |
% |
|
5.64 |
% |
|
6.03 |
% |
|
6.21 |
% |
|
6.31 |
% |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement4 |
|
0.35 |
%3 |
|
0.37 |
% |
|
0.43 |
% |
|
0.47 |
% |
|
0.57 |
% |
|
0.85 |
% |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$31,778 |
|
$18,159 |
|
$13,204 |
|
$4,522 |
|
$790 |
|
$508 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
13 |
% |
|
54 |
% |
|
41 |
% |
|
44 |
% |
|
55 |
% |
|
66 |
% |
|
|
||||||||||||||||||
1 Amount represents less than $0.01 per share.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000 (Unaudited)
Federated Income Securities Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of two portfolios. The financial statements included herein are only those of Federated Intermediate Income Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolio is presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares.
Effective July 19, 1999, the Fund received a tax-free transfer of assets from Vermont National Bank, a Common Trust Fund.
|
Fund Shares Issued |
|
Common Trust Fund |
|
Unrealized |
|
389,238 |
|
$3,849,562 |
|
$15,443 |
|
|
||||
1 Unrealized appreciation/depreciation is included in the Common Trust Fund net assets received.
On July 26, 1999, the Fund acquired all the net assets of CCB Bond Fund ("Acquired Fund") pursuant to a plan of reorganization approved by the Acquired Fund's shareholders. The acquisition was accomplished by a tax-free exchange of 8,112,628 Institutional Shares of the Fund (valued at $79,584,880) for the 8,045,396 Shares of the Acquired Fund outstanding at July 26, 1999. The Acquired Fund's net assets of $79,590,157 (which consisted of $84,134,127 of Paid-in Capital and $1,427,878 of unrealized depreciation; and $135,305 of net realized loss on investments) were combined with those of the Fund. The aggregate net assets of the Fund and the Acquired Fund immediately before the acquisition were $244,260,248 and $79,590,157, respectively. Immediately after the acquisition, the combined aggregate net assets of the Fund were $323,850,405.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
U.S. government securities, listed corporate bonds, other fixed income and asset backed securities, and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Listed equity securities are valued at the last sale price reported on a national securities exchange. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end registered investment companies are valued at net asset value.
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in Federated Core Trust (the "Core Trust"), which is managed by Federated Investment Management Company, the Fund's Adviser. The Core Trust is an open-end management company, registered under the Act, available only to registered investment companies and other institutional investors. The investment objective of High Yield Bond Portfolio, a series of Core Trust, is to seek high current income by investing primarily in a diversified portfolio of mortgage-backed fixed income securities. Federated receives no adviser or administrative fees on behalf of Core Trust. Income distributions from the Core Trust are declared daily and paid monthly, and are recorded by the fund as dividend income. Capital gain distributions, if any, from Core Trust are declared and paid annually, and are recorded by the Fund as capital gains received.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. The Trust offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Trust based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At April 30, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $1,141,628 which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders, which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2008 |
|
$1,141,628 |
|
|
||
Additionally, net capital losses of $3,269,119 attributable to security transactions incurred after October 31, 1999, are treated as arising on the first day of the Fund's next taxable year.
The Fund may engage in when-issued or delayed delivery transactions. The Fund 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. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair market value as determined by the Fund's pricing committee.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:
|
|
|
Six Months Ended 10/31/2000 |
|
Year Ended |
||||||||||
|
Institutional Shares: |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
||||||
|
Shares sold |
|
2,736,307 |
|
|
$ |
26,002,395 |
|
|
10,978,126 |
|
|
$ |
105,935,864 |
|
|
Shares issued in connection with the tax-free transfer of assets from Vermont National Bank, a Common Trust Fund |
|
-- |
|
|
|
-- |
|
|
389,238 |
|
|
|
3,849,562 |
|
|
Shares issued in connection with the acquisition of CCB Bond Fund |
|
-- |
|
|
|
-- |
|
|
8,112,628 |
|
|
|
79,584,880 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
155,060 |
|
|
|
1,476,548 |
|
|
393,124 |
|
|
|
3,795,046 |
|
|
Shares redeemed |
|
(3,798,821 |
) |
|
|
(36,097,750 |
) |
|
(10,544,191 |
) |
|
|
(101,673,032 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(907,454 |
) |
|
$ |
(8,618,807 |
) |
|
9,328,925 |
|
|
$ |
91,492,320 |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended 10/31/2000 |
|
Year Ended |
||||||||||
|
Institutional Service Shares: |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
||||||
|
Shares sold |
|
1,830,099 |
|
|
$ |
17,383,056 |
|
|
1,388,440 |
|
|
$ |
13,455,923 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
68,478 |
|
|
|
653,503 |
|
|
87,253 |
|
|
|
841,549 |
|
|
Shares redeemed |
|
(510,597 |
) |
|
|
(4,848,902 |
) |
|
(866,703 |
) |
|
|
(8,342,596 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
1,387,980 |
|
|
$ |
13,187,657 |
|
|
608,990 |
|
|
$ |
5,954,876 |
|
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
480,526 |
|
|
$ |
4,568,850 |
|
|
9,937,915 |
|
|
$ |
97,447,196 |
|
|
|
||||||||||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in Prime Value Obligations Fund, which is managed by the Adviser. The Adviser has agreed to reimburse certain adviser fees as a result of these transactions.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.150% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of average daily net assets of the Institutional Service Shares annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the reporting period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended October 31, 2000, were as follows:
|
Purchases |
|
$ |
51,327,825 |
|
|
|||
|
Sales |
|
$ |
38,367,761 |
|
|
|||
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
JOHN F. CUNNINGHAM
J. CHRISTOPHER DONAHUE
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
CHARLES F. MANSFIELD, JR.
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
JOHN S. WALSH
JOHN F. DONAHUE
Chairman
J. CHRISTOPHER DONAHUE
President
WILLIAM D. DAWSON III
Chief Investment Officer
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD B. FISHER
Vice President
RICHARD J. THOMAS
Treasurer
C. GRANT ANDERSON
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information.
Federated
World-Class Investment Manager
Federated Intermediate Income
Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Cusip 31420C407
Cusip 31420C506
G00715-01 (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Federated Income Securities Trust
October 31, 2000
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for Federated Short-Term Income Fund, a portfolio of Federated Income Securities Trust. The Report covers the six-month period ended October 31, 2000. It begins with a review of the bond market by the fund's portfolio manager, which is followed by a complete listing of fund holdings and its financial statements.
On behalf of conservative, income-oriented investors, the fund invests in a diversified portfolio consisting primarily of short-term, high-quality debt securities. At the end of the reporting period, the fund's portfolio was invested primarily in corporate bonds/asset-backed securities (58.3%), followed by mortgage-backed securities (27.6%), U.S. Treasury notes (5.9%), U.S. government agency mortgage-backed securities (3.6%) and a mutual fund (6.5%).
During the six-month reporting period, Institutional Shares produced a total return of 4.06% through dividends totaling $0.281 per share and a net asset value increase of $0.06 per share (from $8.52 to $8.58).1 Institutional Service Shares produced a total return of 3.93% through dividends totaling $0.270 per share and a net asset value increase of $0.06 per share (from $8.52 to $8.58).1 Net assets in the fund totaled $194.9 million at the end of the reporting period.
Thank you for selecting Federated Short-Term Income Fund as a high-quality, short-term income investment. As always, we welcome your questions, comments or suggestions.
Sincerely,
J. Christopher Donahue
J. Christopher Donahue
President
December 15, 2000
1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Federated Short Term Income Fund represents a high-quality, fixed income portfolio of securities combining various fixed income asset classes. Investments are concentrated in U.S. Treasury, government agency and high-quality corporate debt securities. The investment objective of the fund is to seek to provide current income. To the extent consistent with this objective, the fund will strive to minimize fluctuation in principal value through a portfolio with an effective average life of no greater than three years, but generally having an effective modified duration of no greater than two years.1
While the reporting period under review has been a favorable one for bond markets, it did not start out that way, particularly at the short end of the yield curve. At the beginning of May 2000, the yield on the two-year treasury note stood at 6.72%, and investors were wondering how much higher yields would climb. The consensus was that economic growth was still too robust for the Federal Reserve Board (the "Fed") to end the round of federal funds target rate increases it had initiated in June of 1999. In fact, two-year yields got as high as 7.00% on an intraday basis in mid-May before the tide finally began to turn. As is usually the case, it turned out that the Fed's aggressive prescription for what it considered an "unhealthy" economic growth rate was already having its effect just as investors feared the worst. That round of six rate increases, along with higher oil prices and softer equity markets, appear to have "turned the trick" in slowing the U.S. economy. While officially the Fed is still cautioning the financial markets about the risk of inflation, forward yield curves (i.e., those yield curves which reflect the market's expectation of future interest rates) are already factoring in an easing of the Fed's monetary policy stance as soon as early next year. Fund management's current belief lies somewhere in the middle, meaning that it expects neither an increase nor a decrease in the federal funds target rate for at least the next several months. While economic growth is undoubtedly slowing from the feverish pace of the first half of 2000, there is still a way to go before the U.S. economy needs to concern itself about negative growth.
The fund's performance during the reporting period was good on both an absolute and relative basis. For the second consecutive year, it has been a difficult environment for "spread product" (i.e., those securities whose values are established on a relative basis to treasury yields). The further one moved away in quality from treasury securities, the more difficult the environment has become. The fund's positioning as a higher quality investment vehicle allowed it to do well relative to its peers. Absolute performance was also consistent with what one would expect in a slowing economy, aided by the decline of the two-year treasury yield below 6% prior to the end of the reporting period.
1 Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.
For the reporting period under review, the fund's Institutional Shares had a total return of 4.06% and the fund's Institutional Service Shares total return was 3.93%,2 compared to a 4.14% total return for the Merrill Lynch 1-3 Year Treasury Index and a 4.09% total return for the Merrill Lynch 1-3 Year Corporate Bond Index.3 The fund's slightly shorter duration profile relative to the comparative indices prevented performance from being even better. At the same time, the fund fared well in comparison to its mutual fund peer group, the Lipper Short Investment Grade Debt category, which returned 4.01% for the reporting period.4
At this writing, marginal assets in the fund are generally being deployed in AAA-rated asset-backed securities (ABS) in order to maintain a high level of credit quality. ABS comprised 49% of the fund's assets at the end of the reporting period under review. Corporate exposure is currently very low, as the market is punishing corporate underperformers in the harshest possible manner. The good news on this front is that there may be some extremely attractive opportunities in the corporate sector in the near future. Treasury and agency exposure remains between 5% and 8% of the fund, a level that has remained unchanged for quite a while now. Finally, mortgage-backed securities exposure, which is generally allocated to short duration (two- to three-year average life), alternative-A (good credit borrowers who do not meet specific agency underwriting standards) and jumbo (loan size in excess of $252,700) product, is being maintained at a little over 30% of the portfolio. With regard to interest rate sensitivity, the fund's duration is positioned at 1.51 years, right around its "neutral" goal of 1.5 years. Credit quality remains high with an average credit rating of AA. Fifty-four percent of the fund's assets were invested in AAA-rated securities at October 31, 2000, with 13% of assets rated AA, 18% rated A, and the remaining 15% rated BBB.
2 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.
3 The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index tracking short-term government securities with maturities between 1 and 2.99 years. The Merrill Lynch 1-3 Year Corporate Bond Index is an unmanaged index tracking investment-grade corporate debt securities with maturities between 1 and 2.99 years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc. Investments cannot be made in an index.
4 Lipper Averages represent the average of the total returns reported by all mutual funds designated by Lipper Analytical Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
October 31, 2000 (unaudited)
|
Principal |
|
|
|
Value |
||
|
|
|
|
CORPORATE BONDS/ASSET-BACKED SECURITIES--58.3% |
|
|
|
|
|
|
|
Automobile--11.4% |
|
|
|
|
$ |
411,817 |
|
AFG Receivables Trust 1997-B, Class B, 6.40%, 2/15/2003 |
|
$ |
410,639 |
|
|
1,000,000 |
|
AmSouth Auto Trust 2000-1, Class A3, 6.67%, 7/15/2004 |
|
|
998,750 |
|
|
3,000,000 |
|
Arcadia Automobile Receivables Trust 1997-B, Class A5, 6.70%, 2/15/2005 |
|
|
3,001,290 |
|
|
4,000,000 |
|
Ford Motor Credit Co., Sr. Note, 5.75%, 2/23/2004 |
|
|
3,812,360 |
|
|
326,951 |
|
Household Automobile Revolving Trust I 1998-1, Class B1, 6.30%, 5/17/2005 |
|
|
322,967 |
|
|
1,235,713 |
|
Key Auto Finance Trust 1999-1, 7.08%, 1/15/2007 |
|
|
1,222,197 |
|
|
2,082,633 |
|
Mellon Auto Grantor Trust 2000-1, Class B, 7.43%, 10/15/2006 |
|
|
2,101,137 |
|
|
5,000,000 |
|
Olympic Automobile Receivables Trust 1996-C, Class A5, 7.00%, 3/15/2004 |
|
|
5,003,000 |
|
|
872,480 |
|
The CIT Group Securitization Corp. II, Class B, 6.45%, 6/15/2018 |
|
|
867,542 |
|
|
4,500,000 |
|
Toyota Auto Receivables 1999-A Owner Trust, Class C, 6.70%, 8/16/2004 |
|
|
4,488,750 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
22,228,632 |
|
|
||||||
|
|
|
|
Banking--2.5% |
|
|
|
|
|
1,000,000 |
1 |
J.P. Morgan & Co., Inc., Sub. Note, 6.565%, 8/19/2002 |
|
|
979,958 |
|
|
2,000,000 |
|
Mercantile Bancorporation, Inc., 6.80%, 6/15/2001 |
|
|
1,994,720 |
|
|
2,000,000 |
|
National Australia Bank, Ltd., Melbourne, Sub. Note, Series A, 6.40%, 12/10/2007 |
|
|
1,969,240 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
4,943,918 |
|
|
||||||
|
|
|
|
Credit Card--14.8% |
|
|
|
|
|
3,000,000 |
|
American Express Credit Account Master Trust 1997-1, Class A, 6.40%, 4/15/2005 |
|
|
2,985,000 |
|
|
2,006,868 |
2 |
Banco Nacional de Mexico SA, Credit Card Merchant Voucher Receivables Master Trust (Series 1996-A), Class A1, 6.25%, 12/1/2003 |
|
|
1,952,934 |
|
|
5,000,000 |
1 |
Bridgestone/Firestone Master Trust 1996-1, Class B, 6.49%, 7/1/2003 |
|
|
5,002,160 |
|
|
3,650,000 |
|
Chemical Master Credit Card Trust I 1995-3, Class A, 6.23%, 4/15/2005 |
|
|
3,616,456 |
|
|
1,300,000 |
2 |
Circuit City Credit Card Master Trust 2000-1, Class CTF, 7.82%, 2/15/2006 |
|
|
1,302,165 |
|
|
3,000,000 |
|
Citibank Credit Card Issuance Trust 2000-C2, Class C2, 7.31%, 10/15/2007 |
|
|
3,013,470 |
|
|
2,000,000 |
|
Fingerhut Master Trust 1998-2, Class A, 6.23%, 2/15/2007 |
|
|
1,976,920 |
|
|
132,500 |
|
Household Affinity Credit Card Master Trust I 1993-2, Class A, 5.60%, 5/15/2002 |
|
|
132,523 |
|
|
5,000,000 |
|
MBNA Master Credit Card Trust 1999-I, Class A, 6.40%, 1/18/2005 |
|
|
4,970,750 |
|
|
3,000,000 |
|
Providian Master Trust 1997-4, Class B, 6.45%, 6/15/2007 |
|
|
2,969,700 |
|
|
1,000,000 |
|
Standard Credit Card Master Trust I, 1994-4, Class A, 8.25%, 11/7/2003 |
|
|
1,012,710 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
28,934,788 |
|
|
||||||
|
Principal |
|
|
|
Value |
||
|
|
|
|
CORPORATE BONDS/ASSET-BACKED SECURITIES--continued |
|
|
|
|
|
|
|
Financial Intermediaries--3.0% |
|
|
|
|
$ |
1,500,000 |
|
Lehman Brothers Holdings, Inc., Medium Term Note, 6.375%, 3/15/2001 |
|
$ |
1,494,345 |
|
|
2,400,000 |
|
Lehman Brothers Holdings, Inc., Note, 6.125%, 7/15/2003 |
|
|
2,329,752 |
|
|
2,000,000 |
|
Merrill Lynch & Co., Inc., Note, 6.00%, 2/12/2003 |
|
|
1,962,920 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
5,787,017 |
|
|
||||||
|
|
|
|
Home Equity Loan--14.2% |
|
|
|
|
|
2,000,000 |
2 |
125 Home Loan Owner Trust 1998-1A, Class M2, 7.75%, 2/15/2029 |
|
|
1,964,062 |
|
|
1,000,000 |
|
Chase Funding Mortgage Loan 1999-1, Class IIB, 9.372%, 6/25/2028 |
|
|
1,025,620 |
|
|
1,800,456 |
|
Cityscape Home Equity Loan Trust 1997-1, Class A4, 7.23%, 3/25/2018 |
|
|
1,779,148 |
|
|
2,000,000 |
|
Cityscape Home Equity Loan Trust 1997-1, Class M1, 7.58%, 3/25/2018 |
|
|
1,924,750 |
|
|
1,228,323 |
2 |
ContiMortgage Home Equity Loan Trust 1993-3, Class A2, 5.54%, 7/15/2020 |
|
|
1,167,674 |
|
|
469,707 |
1 |
ContiMortgage Home Equity Loan Trust 1996-4, Class A10, 6.86%, 1/15/2028 |
|
|
466,771 |
|
|
2,000,000 |
|
ContiMortgage Home Equity Loan Trust 1997-1, Class A7, 7.32%, 9/15/2021 |
|
|
1,995,000 |
|
|
1,445,000 |
|
Green Tree Home Equity Loan Trust 1999-A, Class A3, 5.98%, 4/15/2018 |
|
|
1,419,496 |
|
|
1,006,673 |
|
Headlands Home Equity Loan Trust 1998-2, Class A3, 6.67%, 12/15/2024 |
|
|
987,011 |
|
|
1,000,000 |
|
Mellon Bank Home Equity Installment Loan 1998-1, Class B, 6.95%, 3/25/2015 |
|
|
941,830 |
|
|
1,733,765 |
1, 2 |
Merrill Lynch Mortgage Investors, Inc., Class BB, 8.00%, 3/1/2031 |
|
|
1,696,650 |
|
|
4,000,000 |
|
Navistar Financial Corp. Owner Trust 2000-B, Class A3, 6.67%, 11/15/2004 |
|
|
3,993,120 |
|
|
2,363,000 |
|
New Century Home Equity Loan Trust 1997-NC5, Class M2, 7.24%, 10/25/2028 |
|
|
2,263,310 |
|
|
2,029,416 |
2 |
Option One Mortgage Securities, 1999-4, Class CTF, 9.67%, 12/26/2029 |
|
|
2,011,023 |
|
|
4,000,000 |
|
Salomon Brothers Mortgage Sec. VII 1999-NC2, Class M3, 8.1625%, 4/25/2029 |
|
|
4,000,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
27,635,465 |
|
|
||||||
|
|
|
|
Manufactured Housing--6.5% |
|
|
|
|
|
324,746 |
|
BankAmerica Manufactured Housing Contract Trust 1996-1, Class A3, 6.95%, 10/10/2026 |
|
|
324,989 |
|
|
3,814,354 |
|
Green Tree Financial Corp. 1993-2, Class A4, 6.90%, 7/15/2018 |
|
|
3,787,463 |
|
|
2,000,000 |
|
Green Tree Financial Corp. 1996-2, Class B-1, 7.55%, 4/15/2027 |
|
|
1,901,160 |
|
|
4,000,000 |
2 |
Merit Securities Corp. 12-1, Class B, 7.98%, 7/28/2033 |
|
|
3,645,000 |
|
|
3,000,000 |
|
Merit Securities Corp. 13, Class A4, 7.88%, 12/28/2033 |
|
|
3,047,811 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
12,706,423 |
|
|
||||||
|
Principal |
|
|
|
Value |
||
|
|
|
|
CORPORATE BONDS/ASSET-BACKED SECURITIES--continued |
|
|
|
|
|
|
|
Other Asset Backed--3.6% |
|
|
|
|
$ |
437,425 |
2 |
Bosque Asset Corp., 7.66%, 6/5/2002 |
|
$ |
424,302 |
|
|
1,754,603 |
|
California Infrastructure & Economic Development Bank Special Purpose Trust SCE-1, Class A-3, 6.17%, 3/25/2003 |
|
|
1,752,866 |
|
|
1,048,315 |
|
Case Equipment Loan Trust 1999-A, Class B, 5.96%, 8/15/2005 |
|
|
1,040,290 |
|
|
217,775 |
|
Copelco Capital Funding Corp. X 1997-A, Class A4, 6.47%, 4/20/2005 |
|
|
217,554 |
|
|
7,415,969 |
2 |
FMAC Loan Receivables Trust 1997-A, Class A-X, 2.77%, 4/15/2019 |
|
|
792,582 |
|
|
349,883 |
|
NationsCredit Grantor Trust 1997-1, Class A, 6.75%, 8/15/2013 |
|
|
349,663 |
|
|
1,500,000 |
1 |
Saxon Asset Securities Trust 1999-1, Class BV1, 9.37%, 2/25/2029 |
|
|
1,498,950 |
|
|
939,438 |
1 |
Saxon Asset Securities Trust 2000-2, Class AV1, 6.88%, 7/25/2030 |
|
|
934,802 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
7,011,009 |
|
|
||||||
|
|
|
|
Supranational--0.9% |
|
|
|
|
|
1,700,000 |
|
Corp Andina De Fomento, Bond, 7.10%, 2/1/2003 |
|
|
1,687,607 |
|
|
||||||
|
|
|
|
Technology Services--0.8% |
|
|
|
|
|
1,500,000 |
|
Unisys Corp., Sr. Note, 11.75%, 10/15/2004 |
|
|
1,571,250 |
|
|
||||||
|
|
|
|
Telecommunications & Cellular--0.6% |
|
|
|
|
|
1,000,000 |
|
MetroNet Communications Corp., Sr. Note, 12.00%, 8/15/2007 |
|
|
1,115,000 |
|
|
||||||
|
|
|
|
TOTAL CORPORATE BONDS/ASSET-BACKED SECURITIES (IDENTIFIED COST $115,334,549) |
|
|
113,621,109 |
|
|
||||||
|
|
|
|
MORTGAGE BACKED SECURITIES--27.6% |
|
|
|
|
|
|
|
Commercial Mortgage Backed Securities--2.8% |
|
|
|
|
|
8,404,977 |
|
First Union Lehman Brothers Commercial Mortgage Trust, 1997-C1, Class IO, 1.47376%, 4/18/2027 |
|
|
459,290 |
|
|
4,000,000 |
1, 2 |
KMart CMBS Financing, Inc., 1997-1, Class C, 6.075%, 3/1/2007 |
|
|
3,988,100 |
|
|
1,000,000 |
1, 2 |
Nomura Depositor Trust Commercial Mortgage Pass-Thru 1998-STI, Class A-3, 6.17766%, 1/15/2003 |
|
|
989,375 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
5,436,765 |
|
|
||||||
|
|
|
|
Non-Government Agency Mortgage Backed Securities--24.8% |
|
|
|
|
|
712,550 |
1, 2 |
Bayview Financial Acquisition Trust 1998-1, Class MF2, 7.47188%, 5/25/2029 |
|
|
681,376 |
|
|
1,673,455 |
2 |
Bayview Financial Acquisition Trust 1998-1, Class MI1, 7.52%, 5/25/2029 |
|
|
1,592,396 |
|
|
629,498 |
1, 2 |
Bayview Financial Acquisition Trust 1998-1, Class MI1, 7.37%, 5/25/2029 |
|
|
616,514 |
|
|
3,588,498 |
1, 2 |
C-BASS ABS, LLC, 1997-1, Class A-1, 7.69%, 2/1/2017 |
|
|
3,552,613 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
MORTGAGE-BACKED SECURITIES--continued |
|
|
|
|
|
|
|
Non-Government Agency Mortgage Backed Securities--continued |
|
|
|
|
$ |
458,636 |
|
GE Capital Mortgage Services, Inc., 1994-27, Class A3, 6.50%, 7/25/2024 |
|
$ |
455,152 |
|
|
4,822,225 |
|
GE Capital Mortgage Services, Inc., 1995-11, Class B1, 7.50%, 12/25/2025 |
|
|
4,682,380 |
|
|
787,552 |
|
GE Capital Mortgage Services, Inc., 1996-3, Class A1, 7.00%, 3/25/2026 |
|
|
782,713 |
|
|
252,594 |
|
GE Capital Mortgage Services, Inc., 1998-11, Class 1A1, 6.75%, 6/25/2028 |
|
|
250,658 |
|
|
2,089,743 |
1, 2 |
Greenwich Capital Acceptance 1991-4, 8.28%, 7/1/2019 |
|
|
2,085,824 |
|
|
2,207,687 |
1 |
Greenwich Capital Acceptance 1993-AFC1, Class B1, 6.66%, 9/25/2023 |
|
|
2,191,130 |
|
|
532,751 |
1 |
Greenwich Capital Acceptance 1993-LB2, Class A1, 8.30%, 8/25/2023 |
|
|
531,509 |
|
|
346,938 |
1 |
Greenwich Capital Acceptance 1993-LB3, Class A1, 8.23%, 1/25/2024 |
|
|
348,208 |
|
|
2,966,912 |
1 |
Greenwich Capital Acceptance 1994-C, Class B1, 6.66%, 1/25/2025 |
|
|
2,940,331 |
|
|
167,149 |
2 |
Long Beach Federal Savings Bank, 1992-3, Class A, 9.60%, 6/15/2022 |
|
|
167,149 |
|
|
3,070,000 |
1 |
Mellon Residential Funding Corp., 1998-TBC1, Class B1, 6.59258%, 10/25/2028 |
|
|
3,021,070 |
|
|
3,863,610 |
|
PNC Mortgage Securities Corp., 1999-5, Class 2A1, 6.75%, 7/25/2029 |
|
|
3,758,663 |
|
|
1,121,330 |
|
Prudential Home Mortgage Securities, 1992-5, Class A6, 7.50%, 4/25/2007 |
|
|
1,124,212 |
|
|
2,000,000 |
|
Residential Accredit Loans, Inc., 1997-QS12, Class A6, 7.25%, 11/25/2027 |
|
|
1,981,874 |
|
|
400,259 |
|
Residential Asset Securitization Trust, 1997-A2, Class A3, 9.00%, 4/25/2027 |
|
|
398,863 |
|
|
7,500,000 |
|
Residential Asset Securitization Trust, 1997-A7, Class A5, 7.50%, 9/25/2027 |
|
|
7,489,650 |
|
|
1,233,781 |
1 |
Residential Funding Mortgage Securities I 1994-S13, Class M1, 7.00%, 5/25/2024 |
|
|
1,185,059 |
|
|
8,776,805 |
|
Structured Asset Securities Corp. 1999-ALS2, Class A2, 6.75%, 7/25/2029 |
|
|
8,439,903 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
48,277,247 |
|
|
||||||
|
|
|
|
TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST $54,494,639) |
|
|
53,714,012 |
|
|
||||||
|
|
|
|
GOVERNMENT AGENCIES MORTGAGE BACKED SECURITIES--3.6% |
|
|
|
|
|
2,000,000 |
|
Federal Home Loan Bank System, Sr. Note, 5.80%, 9/2/2008 |
|
|
1,892,520 |
|
|
1,412,562 |
|
GNMA, Pool 354754, 7.50%, 2/15/2024 |
|
|
1,423,156 |
|
|
3,461,961 |
|
GNMA, Pool 780360, 11.00%, 9/15/2015 |
|
|
3,752,696 |
|
|
||||||
|
|
|
|
TOTAL GOVERNMENT AGENCIES MORTGAGE BACKED SECURITIES (IDENTIFIED COST $7,320,015) |
|
|
7,068,372 |
|
|
||||||
|
|
|
|
U.S. TREASURY NOTES--5.9% |
|
|
|
|
|
500,000 |
|
Note, 5.625%, 5/15/2008 |
|
|
493,365 |
|
|
3,000,000 |
|
Note, 5.75%, 11/15/2000 |
|
|
2,999,700 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
U.S. TREASURY NOTES--continued |
|
|
|
|
$ |
4,000,000 |
|
Note, 5.875%, 9/30/2002 |
|
$ |
3,992,880 |
|
|
1,000,000 |
|
Note, 6.00%, 8/15/2009 |
|
|
1,010,390 |
|
|
2,000,000 |
|
Note, 6.50%, 2/15/2010 |
|
|
2,093,500 |
|
|
935,000 |
|
Note, 6.625%, 5/15/2007 |
|
|
973,990 |
|
|
||||||
|
|
|
|
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST $11,608,848) |
|
|
11,563,825 |
|
|
||||||
|
|
|
|
MUTUAL FUNDS--6.5% |
|
|
|
|
|
12,674,813 |
|
Prime Value Obligations Fund, IS Shares (at net asset value) |
|
|
12,674,813 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (IDENTIFIED COST $201,432,864)3 |
|
$ |
198,642,131 |
|
|
||||||
1 Denotes variable rate and floating rate obligations for which the current rate is shown.
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. At October 31, 2000, these securities amounted to $28,629,739 which represents 14.7% of net assets.
3 The cost of investments for federal tax purposes amounts to $201,432,864. The net unrealized depreciation of investments on a federal tax basis amounts to $2,790,733 which is comprised of $363,197 appreciation and $3,153,930 depreciation at October 31, 2000.
Note: The categories of investments are shown as a percentage of net assets ($194,946,396) at October 31, 2000.
The following acronym is used throughout this portfolio:
|
IO |
--Interest Only |
See Notes which are an integral part of the Financial Statements
October 31, 2000 (unaudited)
|
Assets: |
|
|
|
|
|
|
|
|
Total investments in securities, at value (identified and tax cost $201,432,864) |
|
|
|
|
$ |
198,642,131 |
|
|
Income receivable |
|
|
|
|
|
1,228,765 |
|
|
Receivable for investments sold |
|
|
|
|
|
118,827 |
|
|
Receivable for shares sold |
|
|
|
|
|
20,154 |
|
|
Other assets |
|
|
|
|
|
9,200 |
|
|
|
|||||||
|
TOTAL ASSETS |
|
|
|
|
|
200,019,077 |
|
|
|
|||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
Payable for investments purchased |
|
$ |
3,999,462 |
|
|
|
|
|
Income distribution payable |
|
|
1,073,219 |
|
|
|
|
|
|
|||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
5,072,681 |
|
|
|
|||||||
|
Net assets for 22,710,167 shares outstanding |
|
|
|
|
$ |
194,946,396 |
|
|
|
|||||||
|
Net Assets Consist of: |
|
|
|
|
|
|
|
|
Paid in capital |
|
|
|
|
$ |
218,040,026 |
|
|
Net unrealized depreciation of investments |
|
|
|
|
|
(2,790,733 |
) |
|
Accumulated net realized loss on investments |
|
|
|
|
|
(20,022,507 |
) |
|
Distributions in excess of net investment income |
|
|
|
|
|
(280,390 |
) |
|
|
|||||||
|
TOTAL NET ASSETS |
|
|
|
|
$ |
194,946,396 |
|
|
|
|||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
|
$185,353,941 ÷ 21,592,687 shares outstanding |
|
|
|
|
|
$8.58 |
|
|
|
|||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
|
$9,592,455 ÷ 1,117,480 shares outstanding |
|
|
|
|
|
$8.58 |
|
|
|
|||||||
See Notes which are an integral part of the Financial Statements
Six Months Ended October 31, 2000 (unaudited)
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
7,053,525 |
|
|
|
||||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
399,034 |
|
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
77,480 |
|
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
7,183 |
|
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
36,312 |
|
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
5,287 |
|
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
6,385 |
|
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
1,796 |
|
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
33,519 |
|
|
|
|
|
|
Distribution services fee--Institutional Service Shares |
|
|
|
|
|
|
13,690 |
|
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
235,706 |
|
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
13,690 |
|
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
9,577 |
|
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
19,353 |
|
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
599 |
|
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
1,895 |
|
|
|
|
|
|
|
||||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
861,506 |
|
|
|
|
|
|
|
||||||||||||
|
Waivers and Reimbursements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(35,381 |
) |
|
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Institutional Service Shares |
|
|
(13,143 |
) |
|
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(235,706 |
) |
|
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(548 |
) |
|
|
|
|
|
|
|
|
|
Reimbursement of investment adviser fee |
|
|
(399 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
TOTAL WAIVERS AND REIMBURSEMENTS |
|
|
|
|
|
|
(285,177 |
) |
|
|
|
|
|
|
||||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
576,329 |
|
|
|
||||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
6,477,196 |
|
|
|
||||||||||||
|
Realized and Unrealized Gain (Loss) on Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized loss on investments |
|
|
|
|
|
|
|
|
|
|
(76,869 |
) |
|
Net change in unrealized depreciation of investments |
|
|
|
|
|
|
|
|
|
|
1,648,862 |
|
|
|
||||||||||||
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
|
|
|
|
1,571,993 |
|
|
|
||||||||||||
|
Change in net assets resulting from operations |
|
|
|
|
|
|
|
|
|
$ |
8,049,189 |
|
|
|
||||||||||||
See Notes which are an integral part of the Financial Statements
|
|
|
|
Six Months |
|
|
|
Year Ended |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
6,477,196 |
|
|
$ |
13,428,467 |
|
|
Net realized gain (loss) on investments ($(76,869) and $(496,189), respectively, as computed for federal tax purposes) |
|
|
(76,869 |
) |
|
|
26,733 |
|
|
Net change in unrealized appreciation/depreciation |
|
|
1,648,862 |
|
|
|
(3,957,814 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS |
|
|
8,049,189 |
|
|
|
9,497,386 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(6,144,990 |
) |
|
|
(11,980,899 |
) |
|
Institutional Service Shares |
|
|
(342,753 |
) |
|
|
(1,334,302 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(6,487,743 |
) |
|
|
(13,315,201 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
25,386,259 |
|
|
|
84,879,137 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
1,948,817 |
|
|
|
4,703,745 |
|
|
Cost of shares redeemed |
|
|
(37,343,393 |
) |
|
|
(95,927,697 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(10,008,317 |
) |
|
|
(6,344,815 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(8,446,871 |
) |
|
|
(10,162,630 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
203,393,267 |
|
|
|
213,555,897 |
|
|
|
||||||||
|
End of period |
|
$ |
194,946,396 |
|
|
$ |
203,393,267 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
(For a Share Outstanding Throughout Each Period)
|
|
|
Six Months |
|
|
Year Ended April 30, |
|||||||||||||
|
|
|
10/31/2000 |
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 8.52 |
|
|
$ 8.67 |
|
|
$ 8.74 |
|
|
$ 8.68 |
|
|
$ 8.68 |
|
|
$ 8.61 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.28 |
|
|
0.53 |
|
|
0.52 |
|
|
0.52 |
|
|
0.54 |
|
|
0.57 |
|
|
Net realized and unrealized gain (loss) on investments |
|
0.06 |
|
|
(0.15 |
) |
|
(0.07 |
) |
|
0.06 |
|
|
0.01 |
|
|
0.07 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
0.34 |
|
|
0.38 |
|
|
0.45 |
|
|
0.58 |
|
|
0.55 |
|
|
0.64 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.28 |
) |
|
(0.53 |
) |
|
(0.52 |
) |
|
(0.52 |
) |
|
(0.54 |
) |
|
(0.57 |
) |
|
Distributions in excess of net investment income1 |
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
(0.01 |
) |
|
-- |
|
|
|
||||||||||||||||||
|
TOTAL DISTRIBUTIONS |
|
(0.28 |
) |
|
(0.53 |
) |
|
(0.52 |
) |
|
(0.52 |
) |
|
(0.55 |
) |
|
(0.57 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 8.58 |
|
|
$ 8.52 |
|
|
$ 8.67 |
|
|
$ 8.74 |
|
|
$ 8.68 |
|
|
$ 8.68 |
|
|
|
||||||||||||||||||
|
Total Return2 |
|
4.06 |
% |
|
4.52 |
% |
|
5.25 |
% |
|
6.88 |
% |
|
6.53 |
% |
|
7.51 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
0.56 |
%3 |
|
0.56 |
% |
|
0.56 |
% |
|
0.56 |
% |
|
0.56 |
% |
|
0.56 |
% |
|
|
||||||||||||||||||
|
Net investment income |
|
6.51 |
%3 |
|
6.23 |
% |
|
5.88 |
% |
|
5.96 |
% |
|
6.21 |
% |
|
6.43 |
% |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement4 |
|
0.29 |
%3 |
|
0.28 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.29 |
% |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$185,354 |
|
$189,395 |
|
$188,773 |
|
$197,610 |
|
$214,438 |
|
$216,675 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
10 |
% |
|
44 |
% |
|
54 |
% |
|
49 |
% |
|
55 |
% |
|
77 |
% |
|
|
||||||||||||||||||
1 Distributions in excess of net investment income for the year ended April 30, 1997 was the result of certain book and tax timing differences. This distribution did not represent a return of capital for federal income tax purposes for the year ended April 30, 1997.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(For a share outstanding throughout each period)
|
|
|
Six Months |
|
Year Ended April 30, |
||||||||||||||
|
|
|
10/31/2000 |
|
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 8.52 |
|
|
$ 8.67 |
|
|
$ 8.74 |
|
|
$ 8.68 |
|
|
$ 8.68 |
|
|
$ 8.61 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.27 |
|
|
0.51 |
|
|
0.50 |
|
|
0.50 |
|
|
0.53 |
|
|
0.54 |
|
|
Net realized and unrealized gain (loss) on investments |
|
0.06 |
|
|
(0.15 |
) |
|
(0.07 |
) |
|
0.06 |
|
|
-- |
|
|
0.07 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
0.33 |
|
|
0.36 |
|
|
0.43 |
|
|
0.56 |
|
|
0.53 |
|
|
0.61 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.27 |
) |
|
(0.51 |
) |
|
(0.50 |
) |
|
(0.50 |
) |
|
(0.53 |
) |
|
(0.54 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 8.58 |
|
|
$ 8.52 |
|
|
$ 8.67 |
|
|
$ 8.74 |
|
|
$ 8.68 |
|
|
$ 8.68 |
|
|
|
||||||||||||||||||
|
Total Return1 |
|
3.93 |
% |
|
4.26 |
% |
|
4.99 |
% |
|
6.61 |
% |
|
6.27 |
% |
|
7.25 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
0.81 |
%2 |
|
0.81 |
% |
|
0.81 |
% |
|
0.81 |
% |
|
0.81 |
% |
|
0.81 |
% |
|
|
||||||||||||||||||
|
Net investment income |
|
6.24 |
%2 |
|
5.94 |
% |
|
5.63 |
% |
|
5.73 |
% |
|
5.96 |
% |
|
6.17 |
% |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.29 |
%2 |
|
0.28 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.29 |
% |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$9,592 |
|
$13,999 |
|
$24,783 |
|
$14,783 |
|
$17,586 |
|
$16,346 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
10 |
% |
|
44 |
% |
|
54 |
% |
|
49 |
% |
|
55 |
% |
|
77 |
% |
|
|
||||||||||||||||||
1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
2 Computed on annualized basis.
3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000 (unaudited)
Federated Income Securities Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of two portfolios. The financial statements included herein are only those of Federated Short-Term Income Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolio is presented separately. The assets of each portfolio are segregated, and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to seek to provide current income. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
U.S. government securities, listed corporate bonds, other fixed income and asset backed securities, unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end registered investment companies are valued at net asset value.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund/Trust based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At April 30, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $19,945,494, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2002 |
|
$ 669,532 |
|
|
||
|
2003 |
|
5,572,713 |
|
|
||
|
2004 |
|
10,784,773 |
|
|
||
|
2005 |
|
1,566,031 |
|
|
||
|
2006 |
|
696,886 |
|
|
||
|
2007 |
|
159,370 |
|
|
||
|
2008 |
|
496,189 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund 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. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair market value as determined by the Fund's pricing committee.
Additional information on each restricted security held at October 31, 2000 is as follows:
|
Security |
|
Acquisition |
|
Acquisition |
|
Banco Nacional de Mexico S.A., Credit Card Merchant Voucher Receivables Master Trust Series 1996-A, Class A1 |
|
01/09/1997 |
|
$2,148,973 |
|
|
||||
|
Bayview Financial Acquisition Trust, 1998-1, Class MF2 |
|
05/14/1998 |
|
720,016 |
|
|
||||
|
Bayview Financial Acquisition Trust 1998-1, Class MII1 |
|
03/12/1999 |
|
601,108 |
|
|
||||
|
Bayview Financial Acquisition Trust 1998-1, Class MI1 |
|
12/08/1998 |
|
1,695,969 |
|
|
||||
|
Bosque Asset Corp., Series 1, Class 1, 7.66%, 6/5/2002 |
|
06/19/1997 |
|
619,238 |
|
|
||||
|
C-BASS ABS, LLC, Series 1997-1, Class A-1 |
|
02/25/1997 |
|
3,717,340 |
|
|
||||
|
Circuit City Credit Card Master Trust 2000-1, Class CTF |
|
02/23/2000 |
|
1,300,000 |
|
|
||||
|
ContiMortgage Home Equity Loan Trust 1993-3, Class A2 |
|
02/07/2000 |
|
1,301,589 |
|
|
||||
|
FMAC Loan Receivables Trust 1997-A, Class A-X |
|
06/16/1997 |
|
1,072,954 |
|
|
||||
|
Greenwich Capital Acceptance Corp. 1991-4 |
|
01/07/1993 |
|
2,128,745 |
|
|
||||
|
K Mart CMBS Financing, Inc., Series 1997-1, Class C |
|
02/27/1997 |
|
4,000,000 |
|
|
||||
|
Long Beach Federal Savings Bank, 1992-3 |
|
06/29/1992 |
|
186,744 |
|
|
||||
|
Merit Securities Corp., 12-1, Class B |
|
05/18/1999 |
|
3,904,276 |
|
|
||||
|
Merrill Lynch Mortgage Investors, Inc., Class BB |
|
04/13/2000 |
|
1,922,782 |
|
|
||||
|
Nomura Depositor Trust Commercial Mortgage Pass-Thru, 1998-ST I, Class A-3 |
|
02/03/1998 |
|
1,000,000 |
|
|
||||
|
125 Home Loan Owner Trust, 1998-1A, Class M2 |
|
07/30/1998 |
|
1,999,062 |
|
|
||||
|
Option One Mortgage Securities, Series C 1999-4, Class CTF |
|
11/10/1999 |
|
2,598,831 |
|
|
||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
Transactions in shares were as follows:
|
|
|
Six Months Ended |
|
Year Ended |
|||||||||||
|
Institutional Shares: |
|
Shares |
|
|
|
Amount |
|
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
2,801,421 |
|
|
$ |
23,929,507 |
|
|
|
8,911,953 |
|
|
$ |
76,361,992 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
212,159 |
|
|
|
1,812,410 |
|
|
|
444,065 |
|
|
|
3,796,683 |
|
|
Shares redeemed |
|
(3,659,520 |
) |
|
|
(31,264,542 |
) |
|
|
(8,900,987 |
) |
|
|
(76,116,228 |
) |
|
|
|||||||||||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(645,940 |
) |
|
$ |
(5,522,625 |
) |
|
|
455,031 |
|
|
$ |
4,042,447 |
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Year Ended |
|||||||||||
|
Institutional Service Shares: |
|
Shares |
|
|
|
Amount |
|
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
170,255 |
|
|
$ |
1,456,752 |
|
|
|
992,483 |
|
|
$ |
8,517,145 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
15,984 |
|
|
|
136,407 |
|
|
|
106,036 |
|
|
|
907,062 |
|
|
Shares redeemed |
|
(712,480 |
) |
|
|
(6,078,851 |
) |
|
|
(2,314,778 |
) |
|
|
(19,811,469 |
) |
|
|
|||||||||||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
(526,241 |
) |
|
$ |
(4,485,692 |
) |
|
|
(1,216,259 |
) |
|
$ |
(10,387,262 |
) |
|
|
|||||||||||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(1,172,181 |
) |
|
$ |
(10,008,317 |
) |
|
|
(761,228 |
) |
|
$ |
(6,344,815 |
) |
|
|
|||||||||||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in Prime Value Obligations Fund, which is managed by the Adviser. The Adviser has agreed to reimburse certain adviser fees as a result of these transactions.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.150% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of Institutional Service Shares annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund's shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the reporting period ended October 31, 2000, were as follows:
|
Purchases |
|
$18,029,943 |
|
|
||
|
Sales |
|
$27,746,845 |
|
|
||
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
JOHN F. CUNNINGHAM
J. CHRISTOPHER DONAHUE
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
CHARLES F. MANSFIELD, JR.
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
JOHN S. WALSH
JOHN F. DONAHUE
Chairman
J. CHRISTOPHER DONAHUE
President
WILLIAM D. DAWSON III
Chief Investment Officer
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD B. FISHER
Vice President
RICHARD J. THOMAS
Treasurer
C. GRANT ANDERSON
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information.
Federated
World-Class Investment Manager
Federated Short-Term Income
Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Cusip 31420C209
Cusip 31420C308
8112901 (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
|
|