[logo] FEDERATED INVESTORS
Federated
Municipal
Opportunities
Fund, Inc.
10th Semi-Annual Report
February 28, 1997
Established 1987
President's Message
Dear Shareholder:
Federated Municipal Opportunities Fund, Inc. was created in 1987, and I am
pleased to present the 10th Semi-Annual Report of the fund.
This report covers the six-month period from September 1, 1996, through
February 28, 1997. It begins with a discussion with J. Scott Albrecht, Vice
President, Federated Advisers, who co-manages the fund with Mary Jo Ochson,
Senior Vice President, Federated Advisers.
Scott's comments cover the municipal market, the fund's performance, and
investment strategy. Following his discussion are three additional items of
shareholder interest. First is a series of graphs that display the results of
lump sum and systematic investments in the fund with dividends reinvested.
Second is a complete listing of the fund's municipal bond holdings. Third is
the publication of the fund's financial statements.
Rising taxes? Taxes continue to eat away at investment income. A practical way
to try to ensure that your income remains just that your income is through
- -
municipal bonds.
Federated Municipal Opportunities Fund, Inc. is in its 10th year of
providing tax-free income from a broadly diversified portfolio of long-term
municipal bonds.* The fund's Class A Shares' 30-day current net yield on
February 28, 1997, was 4.62% based on offering price free of federal regular
-
income tax.** This is the equivalent of a 6.70% yield on a taxable investment
for an investor in the 31% federal income tax bracket and equivalent to a
-
taxable yield of more than 7% for investors in higher tax brackets.
Performance for the fund's share classes follows.+
Total Return Income Share Price Growth
Class A Shares 4.45% $0.294 $10.33 to $10.49=1.5%
Class B Shares 4.10% $0.260 $10.33 to $10.49=1.5%
Class C Shares 4.10% $0.260 $10.33 to $10.49=1.5%
Class F Shares 4.45% $0.294 $10.33 to $10.49=1.5%
*State, local, and federal alternative minimum taxes may apply.
**The 30-day current net yield is calculated by dividing the investment income
per share for the prior 30 days ended on the date of calculation by the maximum
offering price per share on that date. Then the figure is compounded and
annualized. The 30-day current net yield on February 28, 1997, was 4.08%,
4.08%, and 4.80%, based on offering price, for Class B, C and F Shares,
respectively.
+Performance quoted is based on net asset value and represents past
performance. 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. Total returns for the period based on offering price for Class A, B, C,
and F Shares were -0.28%, -1.56%, 3.11%, and 2.46%, respectively.
At the end of the reporting period, the fund's total net assets of $464.2
million were invested across 172 tax-free securities issued by municipalities
across 34 states and Washington, D.C. The fund's top holdings consisted of:
1. Indiana Indianapolis Airport Authority: $18.5 million
-
2. Utah Intermountain Power Agency: $17.8 million
-
3. Texas Houston Water & Sewer System: $16.0 million
-
4. Illinois Chicago O'Hare International Airport: $14.9 million
-
Thank you for selecting Federated Municipal Opportunities Fund, Inc. as a
convenient way to invest in a broad list of municipal securities. Of course,
you have the option of receiving any income from the fund or building your
account by reinvesting dividends and compounding tax free.
Sincerely,
/s/ Richard B. Fisher
Richard B. Fisher
President
April 15, 1997
Investment Review
J. Scott Albrecht
Vice President
Federated Advisers
Mary Jo Ochson
Senior Vice President
Federated Advisers
Please comment on the municipal Market, which seemed to be characterized by a
lack of direction during the period.
The bond market's direction over the period can best be characterized as moving
sideways. A trading range between 6.25% and 7.25% for the Treasury bond was
established. We are currently in the "Greenspan Market", as the Federal Reserve
Board increased rates by a quarter of a percent with the possibility of another
rate increase this year.
The municipal market is driven to a large degree by specific market technicals
such as the supply of municipal bonds coming to market and the demand for that
supply by the various potential buyers, i.e., individuals, insurance companies
and mutual funds. The favorable technical position of the municipal market has
allowed it to outperform the Treasury market for most of the six-month period.
The ratio of municipal bond yields to Treasury bond yields is a useful measure
of the relative performance of the municipal bond market. Currently, this
ratio is approximately 80%, which is close to the low for the previous twelve
months and reflects the municipal market's strong relative performance versus
Treasury bonds.
Did the municipal market continue to perform strongly relative to the Treasury
market?
Yes. The technical position that exists in the municipal bond market has
provided the circumstances for the relative outperformance versus the Treasury
bond market. The favorable technical position included a limited number of new
issues coming to market over the period. For example, the supply of municipal
bonds coming to market in the first two months of 1997 was 14.5% less than
during the same period in 1996. The demand for tax-exempt assets especially
-
from institutional buyers such as insurance companies and corporations was
-
relatively stable. As a result, municipal bond prices were able to exhibit less
price volatility than Treasury bond prices over the period.
In this environment, how did Federated Municipal Opportunities Fund, Inc.
perform with respect to investment return over the six-month reporting period?
For the six-month period that ended on February 28, 1997, investors in
Federated Municipal Opportunities Fund, Inc. Class A, B, C, and F Shares
received competitive total returns of 4.45%, 4.10%, 4.10% and 4.45%,
respectively based on net asset value.* In comparison, the Lipper General
Municipal Debt Fund Average total return based on net asset value for the six
month period was 4.79%.+
The fund's performance over the period was driven by its concentration in high
coupon securities trading at a premium to their par value. The price of a
premium bond tends to be impacted less by rising interest rates than do the
prices of bonds trading at par value or a discount to par value.
How did Federated Municipal Opportunities Fund, Inc. perform in terms of income
and yield?
Tax-free dividends were above-average, totaling $0.294 per share for Class A
and F Shares, and $0.260 per share for Class B and C Shares. The 30-day current
net yield on February 28, 1997 was 4.62% for Class A Shares, 4.08% for Class B
Shares, 4.08% for Class C Shares, and 4.80% for Class F Shares.**
The funds Class A Shares' yield of 4.62%, based on offering price, has taxable
yield equivalents of 7.65%, 7.22% and 6.70%, respectively, for investors in the
39.6%, 36%, and 31% federal tax brackets.***
The fund's above-average income performance is directly related to its
positions in higher yielding sectors of the municipal market. These higher
yielding sectors include health care, housing, industrial development and
electric power. The security selection process is very credit intensive and
requires diligent surveillance on an ongoing basis.
*Performance quoted reflects past performance. 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. Total returns for the period based on
offering price for Class A, B, C and F Shares were -0.28%, -1.56%, 3.11% and
2.46%, respectively.
**The 30-day current net yield is calculated by dividing the net investment
income per share for the 30 days ended on the date of calculation by the
maximum offering price per share on that date. The figure is compounded and
annualized.
***The taxable yield equivalents, based on offering price, for investors in the
39.6%, 36%, and 31% federal tax brackets are 6.75%, 6.38%, and 5.91%, for Class
B Shares, respectively; 6.75%, 6.38%, and 5.91%, for Class C Shares,
respectively; and 7.95%, 7.5%, and 6.96%, for Class F Shares, respectively.
+Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling into
the respective categories indicated. These figures do not reflect sales
charges.
With Mr. Greenspan's action in place, what is your outlook for the municipal
bond market through 1997?
The outlook for municipal bonds is mixed. Rate increases affect all bonds, and
of course, their value. However, the Federal Reserve Board's action is
short-term "negative" and long-term "positive." Historically, higher rates hurt
businesses and slow the economy. Eventually this can cause a slowdown and lower
interest rates, thereby improving bond prices. We believe bonds could end up
performing quite well relative to equities in 1997 on the basis of total
return. The U.S. economy's real growth rate is expected to slow in the second
half of the year and inflation should continue to remain submissive. Combine
this situation with a federal budget that is structured to potentially achieve
balance in the year 2002, and a powerful market environment could exist for
lower interest rates and, as a result, higher bond prices.
The municipal bond market could be among the better performing fixed-income
asset classes in 1997. The supply of municipal bonds should continue to be
somewhat constrained creating a certain measure of scarcity value. At the same
time, the demand for municipal bonds is expected to improve as investors reach
their desired equity exposure and begin to realize that taxes do matter.
Shareholder Meeting Results
A Special Meeting of the Shareholders of State Bond Municipal Funds, Inc. on
behalf of its portfolio, State Bond Tax Exempt Fund (the "Portfolio") was held
on December 9, 1996. On October 11, 1996, the record date for shareholders
voting at the meeting, there were 7,400,860 total outstanding shares. The
following items were considered by shareholders and the results of their voting
were as follows:
Abstentions Withheld
and Broker Authority
Agenda Item For Against Non-Votes to Vote
- ----------- -------- ----------- ----------- ---------
1.To approve or disapprove a proposed Agreement and Plan of
Reorganization between the State Bond Tax Exempt Fund and Federated Municipal
Opportunities Fund, Inc. (the "Fund") whereby the Fund would acquire all of
the assets of the Portfolio in exchange for Class A Shares of the Fund to be
distributed pro rata by the Portfolio to the holders of its shares in complete
liquidation of the Portfolio.
4,136,701 200,182 367,284 0
A Special Meeting of the Shareholders of State Bond Tax-Free Income Funds, Inc.
on behalf of its portfolio, State Bond Minnesota Tax-Free Income Fund (the
"Portfolio") was held on December 9, 1996. On October 11, 1996, the record date
for shareholders voting at the meeting, there were 1,758,374 total outstanding
shares. The following items were considered by shareholders and the results of
their voting were as follows:
Abstentions Withheld
and Broker Authority
Agenda Item For Against Non-Votes to Vote
- ----------- -------- ----------- ----------- ---------
1. To approve or disapprove a proposed Agreement and Plan of Reorganization
between the State Bond Minnesota Tax-Free Income Fund and Federated Municipal
Opportunities Fund, Inc. (the "Fund") whereby the Fund would acquire all of
the assets of the Portfolio in exchange for Class A Shares of the Fund to be
distributed pro rata by the Portfolio to the holders of its shares in
complete liquidation of the Portfolio.
1,033,766 34,909 53,264 0
Two Ways You May Seek to Invest for Success in
Federated Municipal Opportunities Fund, Inc.
Initial Investment:
If you made an initial investment of $10,000 in Federated Municipal
Opportunities Fund, Inc. Class F Shares on 4/10/87, reinvested your dividends
and capital gains, and did not redeem any shares, your account would be worth
$19,561 on 2/28/97. You would have earned a 7.21% average annual total return
for the ten-year investment life span.*
One key to investing wisely is to reinvest all tax-free distributions in fund
shares. This increases the number of shares on which you can earn future
tax-free dividends, and you gain the benefit of compounding tax-free.
As of 3/31/97, the average annual
one-year, five-year, and since inception (4/10/87) total returns for Class F
Shares were .68%, 5.62%, and 6.98%, respectively.* As of 3/31/97 the cumulative
since inception (8/5/96) total return for Class A Shares, Class B Shares and
Class C Shares were -1.41%, -2.94% and 1.72%, respectively.
SEE APPENDIX A FOR GRAPIC DESCRIPTION
*Total return represents the change in the value of an investment after
reinvesting all income and capital gains, and takes into account the 1% sales
charge and the 1% contingent deferred sales charge for Class F Shares.
Data quoted represent past performance and do not guarantee 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 Municipal Opportunities Fund, Inc.
One Step at a Time:
$1,000 invested each year for ten years (reinvesting all dividends and capital
gains) grew to $14,295.
With this approach, the key is consistency.
If you had started investing $1,000 annually in Federated Municipal
Opportunities Fund, Inc. Class F Shares, on 4/10/87, reinvested your dividends
and capital gains and did not redeem any shares, you would have invested only
$10,000, but your account would have reached a total value of $14,295* by
2/28/97. You would have earned an average annual total return of 7.21%.
A practical investment plan helps you pursue a high level of income through
tax-free municipal bonds. Through systematic investing, you buy shares on a
regular basis and reinvest all tax-free earnings. An investment plan works for
you even if you invest only $1,000 annually. You can take it one step at a
time. Put time, money, and compounding to work!
SEE APPENDIX B FOR GRAPIC DESCRIPTION
*No method of investing can guarantee a profit or protect against loss in down
markets. However, by investing regularly over time and buying shares at various
prices, investors can purchase more shares at lower prices, and all accumulated
shares have the ability to pay income to the investor.
Because such a plan involves continuous investment, regardless of changing
price levels, the investor should consider whether or not to continue purchases
through periods of low price levels.
Federated Municipal Opportunities Fund, Inc.
Investing for Tax-Free Monthly Income
Fred and Margie Potter both work, and have no children. At the peak of their
careers, this tax-sensitive couple was seeking a way to keep more of what they
earn. On April 10, 1987, they invested $5,000 in Federated Municipal
Opportunities Fund, Inc., and continue to invest $500 in the fund on the first
of every month.
As this chart shows, since that time, their investment has grown on a tax-free
-
basis to $90,941.* This represents a 7.21% average annual total return for
-
investors in the 36% Federal tax bracket.+ For the Potters, the decision to
invest tax-free has made the future worth waiting for.
*Income may be subject to the federal alternative minimum tax and state and
local taxes.
SEE APPENDIX C FOR GRAPIC DESCRIPTION
+This hypothetical scenario is provided for illustrative purposes only and does
not represent the results obtained by any particular shareholder. Past
performance does not guarantee future results.
Federated Municipal Opportunities Fund, Inc.
Portfolio of Investments
- --------------------------------------------------------------------------------
February 28, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
MUNICIPALS--3.1% --------------------------------------------------------------------
KENTUCKY--0.3%
----------------------------------------------------------------------
$ 1,200,000 Kentucky Pollution Abatement & Water Resource Finance Authority Daily
VRDNs (Toyota Motor Credit Corp.) AAA $ 1,200,000
---------------------------------------------------------------------- --------------
TEXAS--2.4%
----------------------------------------------------------------------
2,100,000 Harris County, TX HFDC Daily VRDNs (St. Luke's Episcopal Hospital) AA 2,100,000
----------------------------------------------------------------------
9,100,000 Harris County, TX HFDC, (Series 1994) Daily VRDNs (Methodist Hospital,
Harris County, TX) AA 9,100,000
---------------------------------------------------------------------- --------------
Total 11,200,000
---------------------------------------------------------------------- --------------
WYOMING--0.4%
----------------------------------------------------------------------
2,000,000 Sweetwater County, WY IDA, PCR Refunding Bonds (Series 1994) Daily
VRDNs (Pacificorp)/(AMBAC INS)/ (Bank of New York, New York LIQ) AAA 2,000,000
---------------------------------------------------------------------- --------------
TOTAL SHORT-TERM MUNICIPALS (AT AMORTIZED COST) 14,400,000
---------------------------------------------------------------------- --------------
LONG-TERM MUNICIPALS--97.2%
- -------------------------------------------------------------------------------------
ALABAMA--1.3%
----------------------------------------------------------------------
6,000,000 Courtland, AL IDB, Solid Waste Disposal Revenue Bonds (Series A),
6.375% (Champion International Corp.)/ (Original Issue Yield: 6.52%),
3/1/2029 BBB 6,017,100
---------------------------------------------------------------------- --------------
ALASKA--0.4%
----------------------------------------------------------------------
315,000 Alaska State Housing Finance Corp., Collateralized Home Mortgage
Revenue Bonds, Series A-l, 7.625%, 12/1/2013 AAA 325,713
----------------------------------------------------------------------
640,000 Alaska State Housing Finance Corp., Collateralized Home Mortgage
Revenue Bonds, Series B-1, 6.90% (GNMA LOC), 6/1/2032 AAA 663,277
----------------------------------------------------------------------
1,000,000 Valdez, AK Marine Terminal, Refunding Revenue Bonds (Series C), 5.65%
(BP Pipeline Inc.), 12/1/2028 AA- 958,130
---------------------------------------------------------------------- --------------
Total 1,947,120
---------------------------------------------------------------------- --------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
ARKANSAS--1.8%
----------------------------------------------------------------------
$ 2,920,000 Conway, AR Hospital Authority, Revenue Bonds, 7.125% (Conway Regional
Hospital), 2/1/2013 BBB $ 3,064,160
----------------------------------------------------------------------
3,000,000 Conway, AR Hospital Authority, Revenue Refunding Bonds, 8.125% (Conway
Regional Hospital), 7/1/2005 BBB 3,231,480
----------------------------------------------------------------------
1,000,000 Conway, AR Hospital Authority, Revenue Refunding Bonds, 8.375% (Conway
Regional Hospital), 7/1/2011 BBB 1,077,560
----------------------------------------------------------------------
1,000,000 Little Rock, AR Health Facilities Board, Revenue Refunding Bonds,
7.00% (Baptist Medical Center, AR),
10/1/2017 A+ 1,077,000
---------------------------------------------------------------------- --------------
Total 8,450,200
---------------------------------------------------------------------- --------------
CALIFORNIA--0.8%
----------------------------------------------------------------------
500,000 Berkeley, CA Unified School District, UT GO Bonds, Series E, 5.80%
(FGIC INS), 8/1/2020 502,515
----------------------------------------------------------------------
3,100,000 California PCFA, Exempt Facilities Revenue Bonds (Series 1996), 5.50%
(Mobil Corp.)/(Original Issue Yield: 5.72%), 12/1/2029 AA 2,966,173
---------------------------------------------------------------------- --------------
Total 3,468,688
---------------------------------------------------------------------- --------------
COLORADO--0.8%
----------------------------------------------------------------------
620,000 Colorado HFA, SFM Revenue Bonds (Series A-2), 7.70% (FHA GTD),
2/1/2023 AA 654,794
----------------------------------------------------------------------
2,645,000 Colorado HFA, SFM Revenue Bonds (Series C-2), 7.375% (FHA GTD),
8/1/2023 AA 2,781,773
----------------------------------------------------------------------
190,000 Colorado HFA, SFM Revenue Bonds, Series A, 8.00% (Original Issue
Yield: 8.133%), 3/1/2017 194,117
----------------------------------------------------------------------
250,000 El Paso County, CO HFA, SFM Revenue Bonds, 8.00% (GNMA COL), 9/1/2022 AAA 265,670
---------------------------------------------------------------------- --------------
Total 3,896,354
---------------------------------------------------------------------- --------------
DISTRICT OF COLUMBIA--0.3%
----------------------------------------------------------------------
1,250,000 District of Columbia, College and University Revenue Bonds, 6.30%
(Catholic University)/(Connie Lee INS)/ (Original Issue Yield: 6.35%),
10/1/2013 1,307,388
---------------------------------------------------------------------- --------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
IDAHO--0.8%
----------------------------------------------------------------------
$ 1,025,000 Idaho Housing Agency, SFM Revenue Bonds (Series A), 7.50% (FHA GTD),
7/1/2024 AA $ 1,079,550
----------------------------------------------------------------------
2,580,000 Idaho Housing Agency, SFM Revenue Bonds (Series F-2), 7.80% (FHA GTD),
1/1/2023 AA 2,715,063
---------------------------------------------------------------------- --------------
Total 3,794,613
---------------------------------------------------------------------- --------------
ILLINOIS--9.3%
----------------------------------------------------------------------
15,400,000 Chicago O'Hare International Airport, Revenue Bonds (Series A), 5.50%
(AMBAC INS)/(Original Issue Yield: 6.00%), 1/1/2016 AAA 14,899,038
----------------------------------------------------------------------
1,480,000 Chicago, IL, Gas Supply Revenue Bonds, 7.50% (Peoples Gas Light & Coke
Company), 3/1/2015 AA- 1,610,003
----------------------------------------------------------------------
1,100,000 Chicago, IL, Gas Supply Revenue Bonds, 7.50% (Peoples Gas Light & Coke
Company), 3/1/2015 AA- 1,200,441
----------------------------------------------------------------------
2,000,000 Chicago, IL, Water Revenue Bond, 7.20% (Prerefunded PRF)/(Original
Issue Yield: 7.35%), 11/15/2016 AAA 2,192,000
----------------------------------------------------------------------
500,000 Cook County, IL, GO UT Bonds (Series B), 6.00% (FGIC INS)/(Original
Issue Yield: 6.37%), 11/15/2017 AAA 508,740
----------------------------------------------------------------------
4,500,000 Granite City, IL Hospital Facilities Authority, Revenue Refunding
Bonds (Series A), 8.125% (St. Elizabeth Medical Center)/(Original
Issue Yield: 8.167%), 6/1/2008 BB+ 4,656,195
----------------------------------------------------------------------
3,000,000 Illinois Development Finance Authority, Housing Revenue Bonds, 6.10%
(Catholic Charities Housing Development Corp), 1/1/2020 NR 2,822,970
----------------------------------------------------------------------
10,000,000 Illinois Health Facilities Authority, Hospital Revenue Bonds (Series
A), 9.25% (Edgewater Hospital & Medical Center, IL), 7/1/2024 NR 11,023,300
----------------------------------------------------------------------
1,000,000 Illinois State Dedicated Tax, Revenue Bonds, Civic Center, Series A,
6.00% (AMBAC INS)/(Original Issue Yield: 7.28%), 12/15/2015 AAA 1,012,730
----------------------------------------------------------------------
1,050,000 Illinois State University, Auxilary Facilities System Revenue Bonds,
7.40% (Prerefunded PRF)/(Original Issue Yield: 7.444%), 4/1/2014 Aaa 1,153,908
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
ILLINOIS--CONTINUED
----------------------------------------------------------------------
$ 2,000,000 Rolling Meadows, IL, Multifamily Mortgage Revenue Refunding Bonds,
7.75% (Woodfield Garden Apartments)/ (Banque Paribas, Paris LOC),
2/1/2004 A- $ 2,111,300
---------------------------------------------------------------------- --------------
Total 43,190,625
---------------------------------------------------------------------- --------------
INDIANA--8.1%
----------------------------------------------------------------------
550,000 Beech Grove, IN, Economic Development Revenue Bond, 8.75% (Westvaco
Corp.), 7/1/2010 A 557,728
----------------------------------------------------------------------
1,000,000 Highland, IN School Building Corporation, First Mortgage Revenue
Bonds, 6.75% (PRF), 7/15/2012 AAA 1,113,410
----------------------------------------------------------------------
1,300,000 Indiana Municipal Power Agency, Power Supply System Revenue Refunding
Bonds, 6.00% (MBIA INS)/(Original Issue Yield: 6.15%), 1/1/2007 AAA 1,388,153
----------------------------------------------------------------------
3,000,000 Indiana Port Commission, Port Facility Revenue Refunding Bonds, 6.875%
(Cargill, Inc.), 5/1/2012 Aa3 3,269,280
----------------------------------------------------------------------
785,000 Indiana State HFA, SFM Revenue Bonds (Series A), 8.20% (GNMA COL),
7/1/2020 Aaa 828,096
----------------------------------------------------------------------
2,785,000 Indiana State HFA, SFM Revenue Home Mortgage Program (Series F-2),
7.75% (GNMA COL), 7/1/2022 Aaa 2,952,685
----------------------------------------------------------------------
1,150,000 Indiana Transportation Finance Authority, Airport Facilities Lease
Revenue Bonds, Series A, 6.25% (Original Issue Yield: 6.87%),
11/1/2016 A 1,227,234
----------------------------------------------------------------------
17,100,000 Indianapolis, IN Airport Authority, Special Facilities Revenue Bonds,
7.10% (Federal Express Corp.)/(Original Issue Yield: 7.178%),
1/15/2017 BBB 18,491,940
----------------------------------------------------------------------
5,000,000 LaPorte County, IN Hospital Authority, Hospital Facility Revenue
Refunding Bonds, 6.00% (LaPorte Hospital, Inc., IN)/(Original Issue
Yield: 6.35%), 3/1/2023 BBB 4,849,700
----------------------------------------------------------------------
3,000,000 LaPorte County, IN Hospital Authority, Hospital Facility Revenue
Refunding Bonds, 6.25% (LaPorte Hospital, Inc., IN)/(Original Issue
Yield: 6.35%), 3/1/2012 BBB 3,007,470
---------------------------------------------------------------------- --------------
Total 37,685,696
---------------------------------------------------------------------- --------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
IOWA--0.2%
----------------------------------------------------------------------
$ 1,000,000 Davenport, IA PCA, PCR Refunding Bonds, Nicols-Homeshield Project,
8.375% (Quanex Corp.), 12/1/2005 NR $ 1,044,670
---------------------------------------------------------------------- --------------
KENTUCKY--0.8%
----------------------------------------------------------------------
3,500,000 Kenton County, KY Airport Board, Special Facilities Revenue Bonds
(Series A), 7.50% (Delta Air Lines, Inc.)/ (Original Issue Yield:
7.60%), 2/1/2020 Ba3 3,788,225
---------------------------------------------------------------------- --------------
LOUISIANA--5.8%
----------------------------------------------------------------------
3,000,000 De Soto Parish, LA Environmental Improvement Authority, Revenue Bonds,
7.70% (International Paper Co.),
11/1/2018 A3 3,429,030
----------------------------------------------------------------------
5,000,000 Lake Charles, LA Harbor & Terminal District, Port Facilities Revenue
Refunding Bond, Trunkline Lining Co Project, 7.75% (Panhandle Eastern
Corp.), 8/15/2022 Baa3 5,686,350
----------------------------------------------------------------------
750,000 Rapides Parish, LA Housing & Mortgage Finance Authority, SFM Revenue
Bonds, 7.25% (United States Treasury PRF), 8/1/2010 Aaa 862,658
----------------------------------------------------------------------
5,645,000 St. Charles Parish, LA, PCR Bonds, 7.50% (Louisiana Power & Light
Co.)/(Original Issue Yield: 7.542%), 6/1/2021 BBB+ 6,145,203
----------------------------------------------------------------------
1,400,000 St. Charles Parish, LA, PCR Bonds, 8.00% (Louisiana Power & Light
Co.), 12/1/2014 Baa3 1,535,128
----------------------------------------------------------------------
2,100,000 St. Charles Parish, LA, PCR Bonds, 8.25% (Louisiana Power & Light
Co.)/(Original Issue Yield: 8.273%), 6/1/2014 Baa3 2,288,853
----------------------------------------------------------------------
3,650,000 St. Charles Parish, LA, Solid Waste Disposal Revenue Bonds (Series A),
7.00% (Louisiana Power & Light Co.)/ (Original Issue Yield: 7.04%),
12/1/2022 Baa3 3,821,952
----------------------------------------------------------------------
3,000,000 St. James Parish, LA, Solid Waste Disposal Revenue Bonds, 7.70%
(Freeport McMoRan, Inc.)/(Original Issue Yield: 7.75%), 10/1/2022 NR 3,092,250
---------------------------------------------------------------------- --------------
Total 26,861,424
---------------------------------------------------------------------- --------------
MAINE--0.4%
----------------------------------------------------------------------
1,740,000 Maine State Housing Authority, Revenue Bonds
(Series D-3), 8.20%, 11/15/2019 A+ 1,832,672
---------------------------------------------------------------------- --------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
MASSACHUSETTS--2.4%
----------------------------------------------------------------------
$ 21,000,000 (a)Massachusetts IFA, Solid Waste Disposal Sr. Lien
Revenue Bonds (Series A), 9.00% (Massachusetts
Recycling Association), 8/1/2016 NR $ 9,292,500
----------------------------------------------------------------------
1,000,000 Massachusetts State HFA, Revenue Refunding Bonds (Series A), 6.30%,
10/1/2013 A+ 1,035,120
----------------------------------------------------------------------
1,000,000 Massachusetts State HFA, Revenue Refunding Bonds, Series A, 6.10%
(MBIA INS), 12/1/2016 AAA 1,023,650
---------------------------------------------------------------------- --------------
Total 11,351,270
---------------------------------------------------------------------- --------------
MICHIGAN--0.6%
----------------------------------------------------------------------
145,000 Michigan State Housing Development Authority, Single Family Housing
Revenue Bonds, Series A, 7.55% (FHA/VA mtgs GTD)/(Original Issue
Yield: 7.55%), 12/1/2014 AA+ 145,974
----------------------------------------------------------------------
935,000 Michigan State Housing Development Authority, Single Family Mortgage
Revenue Bonds (Series B), 6.95%,
12/1/2020 AA+ 983,854
----------------------------------------------------------------------
1,500,000 Western Townships MI, Utilities Authority, LT GO Sewer Disposal System
Bonds, 8.20%, 1/1/2018 BBB+ 1,624,260
---------------------------------------------------------------------- --------------
Total 2,754,088
---------------------------------------------------------------------- --------------
MINNESOTA--9.7%
----------------------------------------------------------------------
235,000 Albany, MN Independent School District No. 745, UT GO Bonds, Series A,
6.00%, 2/1/2009 Aa1 248,111
----------------------------------------------------------------------
900,000 Burnsville, MN, Multifamily Housing Revenue Refunding Bonds, Coventry
Court Apartments, 7.50% (FHA/VA mtgs COL)/(Original Issue Yield:
7.56%), 9/1/2027 AAA 941,589
----------------------------------------------------------------------
250,000 Centennial Independent School District No. 012, MN, UT GO Bonds,
Series A, 7.15% (FSA INS)/(PRF), 2/1/2011 AAA 270,225
----------------------------------------------------------------------
150,000 Dakota County, MN Housing & Redevelopment Authority, SFM Revenue
Bonds, 7.20% (GNMA GTD), 12/1/2009 AAA 154,516
----------------------------------------------------------------------
285,000 Duluth, MN, UT GO Special Assessment Bonds, 6.25% (Original Issue
Yield: 6.25%), 2/1/2007 A 298,004
----------------------------------------------------------------------
$ 300,000 Eden Prairie, MN Housing & Redevelopment Authority, Lease Revenue
Bonds, Series B, 6.20% (Eden Prairie, MN City Hall), 2/1/2008 A $ 316,914
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
MINNESOTA--CONTINUED
----------------------------------------------------------------------
100,000 Eden Prairie, MN Multifamily Housing, Multifamily Mortgage Revenue
Bonds, 7.875% (Preserve Place Apartments)/ (FHA/VA mtgs GTD), 7/1/2017 AAA 103,546
----------------------------------------------------------------------
165,000 Hennepin Co. MN, Lease Revenue Certificates of Participation, Series
A, 6.80%, 5/15/2017 AA 178,723
----------------------------------------------------------------------
2,400,000 Minneapolis Special School District No. 001, MN, Certificate
Participation (Series A), 5.90% (MBIA INS)/ (Original Issue Yield:
5.95%), 2/1/2011 AAA 2,500,368
----------------------------------------------------------------------
200,000 Minneapolis, MN Multifamily Housing Authority, Multifamily Housing
Revenue Bonds, 7.125% (Seward Towers)/ (GNMA COL), 12/20/2010 AAA 211,786
----------------------------------------------------------------------
300,000 Minneapolis, MN Multifamily Housing Authority, Multifamily Housing
Revenue Bonds, Churchill Project, 7.05% (FHA GTD), 10/1/2022 AAA 313,932
----------------------------------------------------------------------
250,000 Minneapolis, MN, UT GO Sales Tax Refunding Bonds, 6.25% (Original
Issue Yield: 6.45%), 4/1/2012 AAA 267,012
----------------------------------------------------------------------
250,000 Minnesota Public Facilities Authority, Water Pollution Control Revenue
Bonds, Series A, 6.95% (PRF), 3/1/2013 AAA 278,517
----------------------------------------------------------------------
250,000 Minnesota Public Facilities Authority, Water Pollution Control Revenue
Bonds, Series A, 6.50%, 3/1/2014 AAA 271,090
----------------------------------------------------------------------
1,620,000 Minnesota State HFA, Multi-family Housing Revenue Bonds, Series E,
6.00%, 2/1/2014 AA 1,646,665
----------------------------------------------------------------------
1,600,000 Minnesota State HFA, SFM Revenue Bonds (Series A), 7.95% (FHA GTD),
7/1/2022 AA+ 1,689,872
----------------------------------------------------------------------
530,000 Minnesota State HFA, SFM Revenue Bonds (Series D), 8.05% (FHA GTD),
8/1/2018 AA+ 546,085
----------------------------------------------------------------------
3,000,000 Minnesota State HFA, SFM Revenue Bonds (Series E), 6.85%, 1/1/2024 AA+ 3,131,250
----------------------------------------------------------------------
$ 40,000 Minnesota State HFA, Single Family Mortgage Revenue Bonds, Series B,
7.25% (Original Issue Yield: 7.311%),
7/1/2016 AA+ $ 40,909
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
MINNESOTA--CONTINUED
----------------------------------------------------------------------
220,000 Minnesota State HFA, Single Family Mortgage Revenue Bonds, Series B,
7.30% (FHA/VA mtgs LOC)/(Original Issue Yield: 7.342%), 1/1/2017 AA+ 231,746
----------------------------------------------------------------------
195,000 Minnesota State HFA, Single Family Mortgage Revenue Bonds, Series C,
7.10% (FHA/VA mtgs COL), 7/1/2011 AA+ 205,898
----------------------------------------------------------------------
85,000 Minnesota State HFA, Single Family Mortgage Revenue Bonds, Series C,
7.65% (FHA/VA mtgs COL), 7/1/2008 AA+ 89,888
----------------------------------------------------------------------
325,000 Minnesota State HFA, Single Family Mortgage Revenue Bonds, Series D-2,
5.85%, 7/1/2011 AA+ 327,957
----------------------------------------------------------------------
1,260,000 Minnesota State HFA, Single Family Mortgage Revenue Bonds, Series I,
6.25%, 1/1/2015 AA+ 1,296,805
----------------------------------------------------------------------
300,000 Minnesota State Higher Education Facility Authority, Revenue Bonds,
Series Three-J, 6.30% (MacAlester College)/ (Original Issue Yield:
6.385%), 3/1/2014 AA- 316,614
----------------------------------------------------------------------
300,000 Minnesota State University Board, State University System Revenue
Bonds, Series A, 6.00%, 6/30/2013 A 308,157
----------------------------------------------------------------------
100,000 Minnetonka, MN, Multifamily Housing Revenue Bonds, Cedare Hills East
Project, 7.50% (FHA COL), 12/1/2017 AA 103,217
----------------------------------------------------------------------
800,000 Minnetonka, MN, Multifamily Mortgage Revenue Bonds, 7.25% (Minnetonka
Hills Apartments)/(Midwest Fed Minneapolis LOC), 12/1/2002 AAA 825,824
----------------------------------------------------------------------
500,000 Rochester, MN Health Care Facility Authority, Revenue Bonds, Series F,
6.25% (Mayo Foundation)/(Original Issue Yield: 6.35%), 11/15/2021 AA+ 529,870
----------------------------------------------------------------------
10,000,000 Southern Minnesota Municipal Power Agency, Supply
System Revenue Bonds (Series A), 4.75% (MBIA INS)/ (Original Issue
Yield: 5.52%), 1/1/2016 AAA 8,884,200
----------------------------------------------------------------------
9,000,000 St. Paul, MN Housing & Redevelopment Authority, Hospital Revenue
Refunding Bonds (Series A), 6.625% (Healtheast, MN)/(Original Issue
Yield: 6.687%), 11/1/2017 BBB 9,237,510
----------------------------------------------------------------------
$ 400,000 St. Paul, MN Independent School District No. 625, Certificates of
Participation, Series C, 6.05% (Original Issue Yield: 6.10%), 2/1/2012 AA $ 417,536
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
MINNESOTA--CONTINUED
----------------------------------------------------------------------
8,000,000 VRDC/IVRC Trust, GO Inverse Variable Rate Certificates, 7.623%
(Regents of University of Minnesota), 5/18/2012 NR 8,580,000
----------------------------------------------------------------------
200,000 Western Minnesota Municipal Power Agency, MN, Transmission Revenue
Refunding Bonds, 6.75% (AMBAC INS)/ (Original Issue Yield: 7.00%),
1/1/2016 AAA 217,846
---------------------------------------------------------------------- --------------
Total 44,982,182
---------------------------------------------------------------------- --------------
MONTANA--0.3%
----------------------------------------------------------------------
1,120,000 Montana State Board of Housing, SFM Revenue Bonds (Series B-2), 7.50%
(FHA GTD), 4/1/2023 Aa 1,174,298
---------------------------------------------------------------------- --------------
NEVADA--0.7%
----------------------------------------------------------------------
350,000 Clark County, NV Improvement District, Special Assessment Bonds, No.
97A-Las Vegas Boulevard, 5.85% (FSA INS)/(Original Issue Yield:
5.90%), 10/1/2015 356,870
----------------------------------------------------------------------
1,000,000 Humboldt County, NV, Pollution Control Revenue Bonds, 8.30% (Idaho
Power Co.), 12/1/2014 A+ 1,171,140
----------------------------------------------------------------------
800,000 Lyon County, NV School District, LT GO Bonds, 6.75% (AMBAC INS)/(PRF),
6/1/2011 AAA 910,368
----------------------------------------------------------------------
585,000 Washoe County, NV, LT GO Bonds, Series B, 6.00% (Reno-Sparks
Convention Center)/(FGIC INS), 7/1/2009 AAA 618,123
---------------------------------------------------------------------- --------------
Total 3,056,501
---------------------------------------------------------------------- --------------
NEW HAMPSHIRE--4.9%
----------------------------------------------------------------------
9,000,000 New Hampshire Higher Educational & Health Facilities Authority,
Hospital Revenue Bonds, 6.00% (Nashua Memorial Hospital, NH)/(Original
Issue Yield: 6.40%), 10/1/2023 A- 8,835,300
----------------------------------------------------------------------
1,080,000 New Hampshire Municipal Bond Bank, UT GO Bonds, Series J, 6.90%
(PRF)/(Original Issue Yield: 6.95%),
1/15/2012 AAA 1,192,104
----------------------------------------------------------------------
1,245,000 New Hampshire State HFA, SFM Revenue Bonds (Series B), 7.75%, 7/1/2023 A+ 1,317,870
----------------------------------------------------------------------
$ 6,325,000 New Hampshire State HFA, SFM Revenue Bonds (Series D), 7.25%, 7/1/2015 A+ $ 6,620,630
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
NEW HAMPSHIRE--CONTINUED
----------------------------------------------------------------------
2,865,000 New Hampshire State IDA, PCR Bonds (Series A), 8.00% (United
Illuminating Co.), 12/1/2014 BBB- 3,050,824
----------------------------------------------------------------------
1,500,000 New Hampshire State IDA, PCR Bonds (Series B), 10.75% (United
Illuminating Co.), 10/1/2012 BBB- 1,587,705
---------------------------------------------------------------------- --------------
Total 22,604,433
---------------------------------------------------------------------- --------------
NEW MEXICO--0.4%
----------------------------------------------------------------------
2,000,000 Farmington, NM, PCR Refunding Bonds (Series 1997), 6.375% (Public
Service Co. New Mexico), 4/1/2022 BB+ 2,034,440
---------------------------------------------------------------------- --------------
NEW YORK--2.6%
----------------------------------------------------------------------
2,500,000 New York State Energy Research & Development Authority, Electric
Facilities Revenue Bonds (Series A), 7.50% (Consolidated Edison
Co.)/(Original Issue Yield: 7.65%),
1/1/2026 AA- 2,678,425
----------------------------------------------------------------------
2,900,000 New York State Environmental Facilities Corp., PCR State Water
Revolving Fund, 7.25% (Original Issue Yield: 7.344%), 6/15/2010 A 3,222,596
----------------------------------------------------------------------
5,000,000 New York State Environmental Facilities Corp., Solid Waste Disposal
Revenue Bonds, 6.10% (Occidental Petroleum Corp.)/(Original Issue
Yield: 6.214%), 11/1/2030 BBB 4,984,550
----------------------------------------------------------------------
1,000,000 New York State Local Government Assistance Corp., Revenue Bonds,
Series A, 6.00% (Original Issue Yield: 6.106%), 4/1/2016 A 1,024,650
---------------------------------------------------------------------- --------------
Total 11,910,221
---------------------------------------------------------------------- --------------
NORTH CAROLINA--0.7%
----------------------------------------------------------------------
3,000,000 Martin County, NC IFA, (Series 1995) Solid Waste Disposal Revenue
Bonds, 6.00% (Weyerhaeuser Co.), 11/1/2025 A 3,019,680
---------------------------------------------------------------------- --------------
NORTH DAKOTA--0.9%
----------------------------------------------------------------------
2,490,000 North Dakota State HFA, SFM Revenue Bonds (Series C), 7.30%, 7/1/2024 A+ 2,598,738
----------------------------------------------------------------------
$ 1,480,000 North Dakota State HFA, SFM Revenue Bonds, Series A, 6.75% (FHA/VA
mtgs COL), 7/1/2012 A+ $ 1,551,514
---------------------------------------------------------------------- --------------
Total 4,150,252
---------------------------------------------------------------------- --------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
OHIO--0.4%
----------------------------------------------------------------------
500,000 Ohio State Water Development Authority, PCR Bonds (Series A), 8.10%
(Ohio Edison Co.)/(Original Issue Yield: 8.142%), 10/1/2023 BBB- 530,960
----------------------------------------------------------------------
1,250,000 Ohio State Water Development Authority, PCR Bonds (Series A-1), 9.75%
(Cleveland Electric Illuminating Co.), 11/1/2022 BB 1,277,513
---------------------------------------------------------------------- --------------
Total 1,808,473
---------------------------------------------------------------------- --------------
OKLAHOMA--2.7%
----------------------------------------------------------------------
4,585,000 Jackson County, OK Hospital Authority, Hospital Revenue Refunding
Bonds, 7.30% (Jackson County Memorial Hospital, OK)/(Original Issue
Yield: 7.40%), 8/1/2015 BB 4,675,233
----------------------------------------------------------------------
1,250,000 Tulsa, OK Municipal Airport, Revenue Bonds, 7.375% (American
Airlines), 12/1/2020 BB+ 1,333,500
----------------------------------------------------------------------
6,200,000 Tulsa, OK Municipal Airport, Revenue Bonds, 7.60% (American
Airlines)/(Original Issue Yield: 7.931%),
12/1/2030 BB+ 6,711,438
---------------------------------------------------------------------- --------------
Total 12,720,171
---------------------------------------------------------------------- --------------
PENNSYLVANIA--11.1%
----------------------------------------------------------------------
3,000,000 Allegheny County, PA HDA, Health & Education Revenue Bonds, 7.00%
(Rehabilitation Institute of Pittsburgh)/ (Original Issue Yield:
7.049%), 6/1/2010 BBB 3,146,220
----------------------------------------------------------------------
2,500,000 Allegheny County, PA HDA, Health & Education Revenue Bonds, 7.00%
(Rehabilitation Institute of Pittsburgh)/(Original Issue Yield:
7.132%), 6/1/2022 BBB 2,614,400
----------------------------------------------------------------------
5,370,000 Allegheny County, PA Higher Education, Bldg Auth Revenue Bonds, 7.375%
(La Roche College), 7/15/2012 NR 5,562,461
----------------------------------------------------------------------
1,625,000 Allegheny County, PA IDA, Revenue Bonds, 8.75% (United Parcel
Service), 2/15/2009 NR 1,711,986
----------------------------------------------------------------------
$ 665,000 Allegheny County, PA Residential Finance Agency, Mortgage Revenue
Bonds (Series G), 9.50% (GNMA COL),
12/1/2018 Aaa $ 690,769
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
PENNSYLVANIA--CONTINUED
----------------------------------------------------------------------
3,000,000 Delaware County Authority, PA, College Revenue Bonds, 7.25% (Eastern
College)/(United States Treasury PRF)/ (Original Issue Yield: 7.875%),
3/1/2012 NR 3,412,980
----------------------------------------------------------------------
2,055,000 Erie County, PA Hospital Authority, Revenue Bonds, 7.50% (Erie Infants
& Youth Home, Inc.), 10/1/2011 NR 2,141,598
----------------------------------------------------------------------
400,000 Erie County, PA IDA, Pollution Control Revenue Refunding Bonds, 7.15%
(International Paper Co.), 9/1/2013 BBB 427,072
----------------------------------------------------------------------
1,730,000 Northeastern, PA Hospital & Education Authority, College Revenue
Refunding Bonds (Series B), 6.00% (Kings College, PA)/(Original Issue
Yield: 6.174%), 7/15/2018 BBB 1,688,169
----------------------------------------------------------------------
8,000,000 Pennsylvania EDFA, Wastewater Treatment Revenue Bonds (Series A),
7.60% (Sun Co., Inc.)/(Original Issue Yield: 7.653%), 12/1/2024 BBB 8,936,160
----------------------------------------------------------------------
6,000,000 Pennsylvania Housing Finance Authority, SFM Revenue Bonds (Series
34-B), 7.00% (FHA and FHA GTDs), 4/1/2024 AA 6,289,140
----------------------------------------------------------------------
2,260,000 Pennsylvania Housing Finance Authority, SFM Revenue Bonds (Series 28),
7.65% (FHA GTD), 10/1/2023 AA 2,379,803
----------------------------------------------------------------------
1,740,000 Pennsylvania State Higher Education Facilities Authority, College &
University Revenue Bonds, 6.75% (Thiel
College), 9/1/2017 NR 1,820,649
----------------------------------------------------------------------
3,250,000 Pennsylvania State Higher Education Facilities Authority, College &
University Revenue Refunding Bonds (Series A), 6.10% (Allegheny
College, Meadville, PA)/(Original Issue Yield: 6.23%), 11/1/2008 BBB+ 3,257,248
----------------------------------------------------------------------
1,200,000 Pennsylvania State Higher Education Facilities Authority, Revenue
Bonds (Series 1996), 7.15% (Thiel College),
5/15/2015 NR 1,224,384
----------------------------------------------------------------------
$ 3,875,000 Pennsylvania State Higher Education Facilities Authority, Revenue
Bonds (Series A), 7.375% (Medical College of Pennsylvania)/(United
States Treasury PRF)/(Original Issue Yield: 7.45%), 3/1/2021 AAA $ 4,337,443
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
PENNSYLVANIA--CONTINUED
----------------------------------------------------------------------
1,750,000 Pennsylvania State Higher Education Facilities Authority, Revenue
Bonds (Series A), 8.375% (Medical College of Pennsylvania)/(United
States Treasury PRF)/(Original Issue Yield: 8.448%), 3/1/2011 AAA 1,927,013
---------------------------------------------------------------------- --------------
Total 51,567,495
---------------------------------------------------------------------- --------------
RHODE ISLAND--0.4%
----------------------------------------------------------------------
1,675,000 Rhode Island Depositors Economic Protection Corp., Special Obligation
Revenue Bonds, Series A, 6.625% (FSA INS)/(United States Treasury
PRF)/(Original Issue Yield: 6.745%), 8/1/2019 AAA 1,870,891
---------------------------------------------------------------------- --------------
SOUTH CAROLINA--0.2%
----------------------------------------------------------------------
810,000 South Carolina State Housing Finance & Development Authority,
Homeownership Mortgage Revenue Bonds (Series A), 7.40% (FHA GTD),
7/1/2023 AA 848,580
---------------------------------------------------------------------- --------------
TENNESSEE--3.2%
----------------------------------------------------------------------
3,100,000 Springfield, TN Health & Educational Facilities Board, Hospital
Revenue Bonds, 8.25% (NorthCrest Medical Center)/(Original Issue
Yield: 8.50%), 4/1/2012 NR 3,331,446
----------------------------------------------------------------------
7,800,000 Springfield, TN Health & Educational Facilities Board, Hospital
Revenue Bonds, 8.50% (NorthCrest Medical Center)/(Original Issue
Yield: 8.875%), 4/1/2024 NR 8,425,326
----------------------------------------------------------------------
2,775,000 Tennessee Housing Development Agency, Homeownership Program, Issue V
Revenue Bonds, 7.65%, 7/1/2022 Aa 2,911,364
---------------------------------------------------------------------- --------------
Total 14,668,136
---------------------------------------------------------------------- --------------
TEXAS--14.0%
----------------------------------------------------------------------
2,500,000 Brazos River Authority, TX, PCR Revenue Bonds (Series A), 7.875%
(Texas Utilities Electric Co.), 3/1/2021 BBB 2,741,450
----------------------------------------------------------------------
$ 1,800,000 Brazos River Authority, TX, PCR Revenue Bonds (Series A), 8.125%
(Texas Utilities Electric Co.), 2/1/2020 BBB $ 1,967,256
----------------------------------------------------------------------
1,000,000 Brownsville, TX Utility System, Revenue Bonds, 6.875% (AMBAC
INS)/(PRF)/(Original Issue Yield: 7.10%), 9/1/2020 AAA 1,102,840
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
TEXAS--CONTINUED
----------------------------------------------------------------------
7,320,000 Dallas-Fort Worth, TX International Airport Facilities, Revenue Bonds,
7.125% (Delta Air Lines, Inc.)/(Original Issue Yield: 7.55%),
11/1/2026 BB+ 7,682,999
----------------------------------------------------------------------
3,000,000 Dallas-Fort Worth, TX International Airport Facilities, Revenue Bonds,
7.25% (American Airlines)/(Original Issue Yield: 7.428%), 11/1/2030 BB+ 3,233,310
----------------------------------------------------------------------
2,370,000 Dallas-Fort Worth, TX International Airport Facilities, Revenue Bonds,
7.50% (American Airlines)/(Original Issue Yield: 8.20%), 11/1/2025 BB+ 2,536,682
----------------------------------------------------------------------
2,500,000 Dallas-Fort Worth, TX International Airport Facilities, Revenue Bonds,
7.625% (Delta Air Lines, Inc.)/(Original Issue Yield: 7.65%),
11/1/2021 BB+ 2,712,500
----------------------------------------------------------------------
1,000,000 Guadalupe-Blanco River Authority TX, Industrial Development Corp PCR
Bonds, 8.60% (A.P. Green Industries),
4/1/2009 NR 1,056,300
----------------------------------------------------------------------
2,500,000 Guadalupe-Blanco River Authority TX, Industrial Development Corp., PCR
Bonds, 8.60% (A.P. Green Industries),
4/1/2009 NR 2,732,325
----------------------------------------------------------------------
5,000,000 Gulf Coast, TX Waste Disposal Authority, Revenue Bonds (Series A),
6.875% (Champion International Corp.)/ (Original Issue Yield: 7.15%),
12/1/2028 BBB 5,244,450
----------------------------------------------------------------------
17,000,000 Houston, TX Water & Sewer System, Junior Lien Refunding Revenue Bonds
(Series A), 5.25% (FGIC INS)/ (Original Issue Yield: 5.60%), 12/1/2025 AAA 16,002,950
----------------------------------------------------------------------
10,000 Houston, TX Water & Sewer System, Revenue Bonds (Series B), 6.40%
(Original Issue Yield: 6.45%), 12/1/2002 (@102) A 11,089
----------------------------------------------------------------------
1,535,000 Houston, TX Water & Sewer System, Revenue Bonds, 6.40% (Original Issue
Yield: 6.45%), 12/1/2009 A 1,642,465
----------------------------------------------------------------------
$ 7,630,000 Richardson, TX Hospital Authority, Hospital Refunding & Improvement
Bonds, 6.75% (Richardson Medical Center, TX)/(Original Issue Yield:
6.82%), 12/1/2023 BBB- $ 7,891,175
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
TEXAS--CONTINUED
----------------------------------------------------------------------
1,000,000 Texas Water Development Board, State Revolving Fund Senior Lien
Revenue Bond, 6.40% (Original Issue Yield: 6.50%), 7/15/2007 AAA 1,083,310
----------------------------------------------------------------------
7,500,000 West Side Calhoun County, TX Navigation District, Solid Waste Revenue
Bond, 6.40% (Union Carbide Corp.)/ (Original Issue Yield: 6.437%),
5/1/2023 BBB 7,566,975
---------------------------------------------------------------------- --------------
Total 65,208,076
---------------------------------------------------------------------- --------------
UTAH--5.2%
----------------------------------------------------------------------
1,000,000 Hildale, UT, Electric Revenue Bonds (Series 1995), 7.00%, 9/1/2002 NR 1,007,960
----------------------------------------------------------------------
20,000,000 Intermountain Power Agency, UT, Refunding Revenue Bonds (Series A),
5.00% (Original Issue Yield: 5.687%),
7/1/2023 A+ 17,790,000
----------------------------------------------------------------------
895,000 Utah State HFA, SFM Revenue Bonds (Series B-3), 7.10%, 7/1/2024 AA 936,465
----------------------------------------------------------------------
1,280,000 Utah State HFA, SFM Revenue Bonds (Series E-2), 7.15% (FHA
GTD)/(Original Issue Yield: 7.169%), 7/1/2024 AA 1,341,734
----------------------------------------------------------------------
1,660,000 Utah State HFA, Single Family Mortgage Revenue Bonds, 7.55% (FHA GTD),
7/1/2023 AA 1,751,931
----------------------------------------------------------------------
395,000 Utah State HFA, Single Family Mortgage Revenue Bonds, 7.75% (FHA GTD),
1/1/2023 AA 412,404
----------------------------------------------------------------------
1,000,000 Utah State Municipal Finance Cooperative, Local Government Pooled
Capital Improvement Financing Program, 6.40%, 8/1/2009 A 1,025,430
---------------------------------------------------------------------- --------------
Total 24,265,924
---------------------------------------------------------------------- --------------
VIRGINIA--0.1%
----------------------------------------------------------------------
500,000 Virginia State Housing Development Authority, Commonwealth Mortgage,
Series C, Subseries C-10, 6.50%, 7/1/2007 AA+ 526,690
---------------------------------------------------------------------- --------------
WASHINGTON--5.0%
----------------------------------------------------------------------
$ 4,250,000 Pierce County, WA Economic Development Corp., Solid Waste Revenue
Bond, 5.80% (Occidental Petroleum Corp.)/ (Original Issue Yield:
5.90%), 9/1/2029 BBB $ 3,966,993
----------------------------------------------------------------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
WASHINGTON--CONTINUED
----------------------------------------------------------------------
4,075,000 Pilchuck Development Public Corp., WA, Special Facilities Airport
Revenue Bonds (Series 1993), Tramco, Inc. Project, 6.00% (Goodrich
(B.F.) Co.), 8/1/2023 BBB+ 3,993,867
----------------------------------------------------------------------
4,300,000 Port of Camas-Washougal, Washington, PCR Refunding Bonds (Series
1993), 6.70% (James River Project, WA)/ (Original Issue Yield: 6.75%),
4/1/2023 BBB+ 4,403,845
----------------------------------------------------------------------
1,000,000 Skagit County, WA Consolidated School District Pound320, UT GO Bonds,
6.70% (MBIA INS)/(Original Issue Yield: 6.75%), 12/1/2007 AAA 1,133,190
----------------------------------------------------------------------
10,000,000 Washington State, UT GO (Series A), 5.375% (Original Issue Yield:
6.00%), 7/1/2021 AAA 9,631,500
---------------------------------------------------------------------- --------------
Total 23,129,395
---------------------------------------------------------------------- --------------
WEST VIRGINIA--0.5%
----------------------------------------------------------------------
5,000,000 (a)Marion County, WV County Commission, Solid Waste Facility Revenue
Bonds (Series 1993), 7.75% (American Power Paper Recycling), 12/1/2011 NR 2,312,650
---------------------------------------------------------------------- --------------
WISCONSIN--0.4%
----------------------------------------------------------------------
985,000 Wisconsin Housing & Economic Development Authority, Homeownership
Revenue Bond, Series A, 7.10%, 3/1/2023 AA 1,039,510
----------------------------------------------------------------------
435,000 Wisconsin Housing & Economic Development Authority, Homeownership
Revenue Bonds (Series E), 8.00% (FHA GTD)/(Original Issue Yield:
8.044%), 3/1/2021 AA 445,018
----------------------------------------------------------------------
550,000 Wisconsin Housing & Economic Development Authority, Homeownership
Revenue Bonds, Series A, 6.00%, 9/1/2015 AA 556,177
---------------------------------------------------------------------- --------------
Total 2,040,705
---------------------------------------------------------------------- --------------
TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $445,076,371) 451,289,326
---------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $459,476,371)(B) $ 465,689,326
---------------------------------------------------------------------- --------------
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $459,476,371.
The net unrealized appreciation of investments on a federal tax basis
amounts to $6,212,955 which is comprised of $21,630,928 appreciation and
$15,417,973 depreciation at February 28, 1997.
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($464,191,782) at February 28, 1997.
The following acronyms are used throughout this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation
COL -- Collateralized
EDFA -- Economic Development Financing Authority
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHA/VA -- Federal Housing Administration/
Veterans Administration
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
GO -- General Obligation
GTD -- Guaranty
HDA -- Hospital Development Authority
HFA -- Housing Finance Authority
HFDC -- Health Facility Development Corporation
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IFA -- Industrial Finance Authority
INS -- Insured
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
LT -- Limited Tax
LYON -- Liquid Yield Option Note
MBIA -- Municipal Bond Investors Assurance
PCA -- Pollution Control Authority
PCR -- Pollution Control Revenue
PCFA -- Pollution Control Finance Authority
PRF -- Prerefunded
SFM -- Single Family Mortgage
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
MASSACHUSETTS IFA, SOLID WASTE DISPOSAL SR. LIEN REVENUE BONDS (SERIES A), 9.00%
(MASSACHUSETTS RECYCLING ASSOCIATION)
Currently, the obligor is in technical default of certain covenants of the
Series A revenue bonds. The obligor is in negotiations with its bondholders and
is evaluating its financing options. The investment adviser is unable to predict
the outcome of these proceedings and is closely monitoring the situation.
MARION COUNTY, WV COUNTY COMMISSION, SOLID WASTE FACILITY REVENUE BONDS (SERIES
1993), 7.75% (AMERICAN POWER PAPER RECYCLING)
Currently, the obligor is in technical default of certain covenants of the
Series 1993 revenue bonds. The obligor is in negotiations with its bondholders
and is evaluating its financing options. The investment adviser is unable to
predict the outcome of these proceedings and is closely monitoring the
situation.
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
February 28, 1997 (unaudited)
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $459,476,371) $465,689,326
- ---------------------------------------------------------------------------------------------------
Income receivable 7,867,614
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 6,284,826
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 106,679
- --------------------------------------------------------------------------------------------------- -----------
Total assets 479,948,445
- --------------------------------------------------------------------------------------------------- -----------
LIABILITIES:
- ---------------------------------------------------------------------------------------
Payable for investments purchased $15,037,099
- ---------------------------------------------------------------------------------------
Payable for shares redeemed 520,313
- ---------------------------------------------------------------------------------------
Payable to Bank 48,822
- ---------------------------------------------------------------------------------------
Accrued expenses 150,429
- --------------------------------------------------------------------------------------- ----------
Total liabilities 15,756,663
- --------------------------------------------------------------------------------------------------- -----------
NET ASSETS for 44,252,712 shares outstanding $464,191,782
- --------------------------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $466,548,067
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 6,212,955
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (8,728,797)
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 159,557
- --------------------------------------------------------------------------------------------------- -----------
Total Net Assets $464,191,782
- --------------------------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------------------------
CLASS A SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($96,863,344 / 9,232,510 shares outstanding) $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/95.50 of $10.49)* $ 10.98
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
CLASS B SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($8,922,000 / 850,556 shares outstanding) $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (94.50/100 of $10.49)** $ 9.91
- --------------------------------------------------------------------------------------------------- -----------
CLASS C SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($1,631,197 / 155,526 shares outstanding) $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (99.00/100 of $10.49)** $ 10.39
- --------------------------------------------------------------------------------------------------- -----------
CLASS F SHARES:
- ---------------------------------------------------------------------------------------------------
Net Asset Value Per Share ($356,775,241 / 34,014,120 shares outstanding) $ 10.49
- --------------------------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/99.00 of $10.49)* $ 10.60
- --------------------------------------------------------------------------------------------------- -----------
Redemption Proceeds Per Share (99.00/100 of $10.49)** $ 10.39
- --------------------------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** See "Contingent Deferred Sales Charge" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Statement of Operations
- --------------------------------------------------------------------------------
Six Months Ended February 28, 1997 (unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 13,222,003
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 1,253,756
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 157,847
- ---------------------------------------------------------------------------------------
Custodian fees 34,718
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 137,888
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 7,938
- ---------------------------------------------------------------------------------------
Auditing fees 7,887
- ---------------------------------------------------------------------------------------
Legal fees 2,895
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 64,901
- ---------------------------------------------------------------------------------------
Distribution services fee--Class B Shares 15,640
- ---------------------------------------------------------------------------------------
Distribution services fee--Class C Shares 2,789
- ---------------------------------------------------------------------------------------
Shareholder services fee--Class A Shares 51,744
- ---------------------------------------------------------------------------------------
Shareholder services fee--Class B Shares 5,213
- ---------------------------------------------------------------------------------------
Shareholder services fee--Class C Shares 930
- ---------------------------------------------------------------------------------------
Shareholder services fee--Class F Shares 464,207
- ---------------------------------------------------------------------------------------
Share registration costs 42,985
- ---------------------------------------------------------------------------------------
Printing and postage 47,348
- ---------------------------------------------------------------------------------------
Insurance premiums 4,854
- ---------------------------------------------------------------------------------------
Taxes 28,306
- ---------------------------------------------------------------------------------------
Miscellaneous 6,708
- --------------------------------------------------------------------------------------- -----------
Total expenses 2,338,554
- ---------------------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------------------------
Waiver of shareholder services fee--Class F Shares (18,568)
- --------------------------------------------------------------------------------------- -----------
Net expenses 2,319,986
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 10,902,017
- ---------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain on investments 1,611,653
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 9,731,100
- ---------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 11,342,753
- ---------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 22,244,770
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------
Operations--
- ---------------------------------------------------------------------
Net investment income $ 10,902,017 $ 24,378,361
- ---------------------------------------------------------------------
Net realized gain (loss) on investments ($1,611,653 and ($3,794,684),
respectively, as computed for federal tax purposes) 1,611,653 (116,813)
- ---------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 9,731,100 (13,721,871)
- --------------------------------------------------------------------- ---------------------- -------------------
Change in net assets resulting from operations 22,244,770 10,539,677
- --------------------------------------------------------------------- ---------------------- -------------------
NET EQUALIZATION CREDITS (DEBITS)-- 77,406 (42,870)
- --------------------------------------------------------------------- ---------------------- -------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------
Distributions from net investment income
- ---------------------------------------------------------------------
Class A Shares (899,697) --
- ---------------------------------------------------------------------
Class B Shares (87,315) --
- ---------------------------------------------------------------------
Class C Shares (24,645 ) --
- ---------------------------------------------------------------------
Class F Shares (10,581,771 ) (24,971,054 )
- --------------------------------------------------------------------- ---------------------- -------------------
Change in net assets resulting from
distributions to shareholders (11,593,428 ) (24,971,054 )
- --------------------------------------------------------------------- ---------------------- -------------------
SHARE TRANSACTIONS (EXCLUSIVE OF AMOUNTS ALLOCATED TO NET INVESTMENT
INCOME)--
- ---------------------------------------------------------------------
Proceeds from sale of shares 22,404,924 20,142,447
- ---------------------------------------------------------------------
Proceeds from shares issued in connection with the acquisition 93,815,812 --
- ---------------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 6,955,880 14,912,188
- ---------------------------------------------------------------------
Cost of shares redeemed (52,742,760 ) (63,560,851 )
- --------------------------------------------------------------------- ---------------------- -------------------
Change in net assets resulting from share
transactions 70,433,856 (28,506,216 )
- --------------------------------------------------------------------- ---------------------- -------------------
Change in net assets 81,162,604 (42,980,463 )
- ---------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------
Beginning of period 383,029,178 426,009,641
- --------------------------------------------------------------------- ---------------------- -------------------
End of period (including undistributed net investment income of
$159,557 and $773,562, respectively) $ 464,191,782 $ 383,029,178
- --------------------------------------------------------------------- ---------------------- -------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Financial Highlights--Class A Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
FEBRUARY 28, AUGUST 31,
1997 1996(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.33 $ 10.42
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------
Net investment income 0.30 0.08
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.15 (0.12)
- ------------------------------------------------------------------------------- ------- -------
Total from investment operations 0.45 (0.04)
- ------------------------------------------------------------------------------- ------- -------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------
Distributions from net investment income (0.29) (0.05)
- ------------------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 10.49 $ 10.33
- ------------------------------------------------------------------------------- ------- -------
TOTAL RETURN (B) 4.45% (0.36%)
- -------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------
Expenses 1.11%* 0.84%*
- -------------------------------------------------------------------------------
Net investment income 5.27%* 6.15%*
- -------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $96,863 $296
- -------------------------------------------------------------------------------
Portfolio turnover 6% 22%
- -------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 5, 1996 (date of initial
public offering) to August 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Financial Highlights--Class B Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
FEBRUARY 28, AUGUST 31,
1997 1996(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.33 $ 10.42
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------
Net investment income 0.26 0.08
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.16 (0.12)
- ------------------------------------------------------------------------------- ------- -------
Total from investment operations 0.42 (0.04)
- ------------------------------------------------------------------------------- ------- -------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------
Distributions from net investment income (0.26) (0.05)
- ------------------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 10.49 $ 10.33
- ------------------------------------------------------------------------------- ------- -------
TOTAL RETURN (B) 4.10% (0.36%)
- -------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------
Expenses 1.87%* 0.84%*
- -------------------------------------------------------------------------------
Net investment income 4.57%* 6.15%*
- -------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $8,922 $296
- -------------------------------------------------------------------------------
Portfolio turnover 6% 22%
- -------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 5, 1996 (date of initial
public offering) to August 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Financial Highlights--Class C Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
FEBRUARY 28, AUGUST 31,
1997 1996(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.33 $ 10.42
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------
Net investment income 0.27 0.08
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.15 (0.12)
- ------------------------------------------------------------------------------- ------- -------
Total from investment operations 0.42 (0.04)
- ------------------------------------------------------------------------------- ------- -------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------
Distributions from net investment income (0.26) (0.05)
- ------------------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 10.49 $ 10.33
- ------------------------------------------------------------------------------- ------- -------
TOTAL RETURN (B) 4.10% (0.36%)
- -------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------
Expenses 1.60%* 0.84%*
- -------------------------------------------------------------------------------
Net investment income 4.77%* 4.77%*
- -------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $1,631 $296
- -------------------------------------------------------------------------------
Portfolio turnover 6% 22%
- -------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 5, 1996 (date of initial
public offering) to August 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(See Notes which are an integral part of the Financial Statements)
Federated Municipal Opportunities Fund, Inc.
Financial Highlights--Class F Shares
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
FEBRUARY 28, YEAR ENDED AUGUST 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 10.33 $ 10.71 $ 10.56 $ 11.28 $ 10.78 $ 10.39 $ 10.00 $ 10.23 $ 9.76
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.26 0.69 0.63 0.61 0.62 0.66 0.70 0.72 0.74
- ---------------------------
Net realized and
unrealized gain (loss) on
investments 0.19 (0.42) 0.15 (0.73) 0.51 0.39 0.40 (0.23) 0.49
- --------------------------- ----- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 0.45 0.27 0.78 (0.12) 1.13 1.05 1.10 0.49 1.23
- --------------------------- ----- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- ---------------------------
Distributions from net
investment income (0.29) (0.65) (0.63) (0.60) (0.63) (0.66) (0.71) (0.72) (0.76)
- --------------------------- ----- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 10.49 $ 10.33 $ 10.71 $ 10.56 $ 11.28 $ 10.78 $ 10.39 $ 10.00 $ 10.23
- --------------------------- ----- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (A) 4.45% 2.47% 7.73% (1.06%) 10.86% 10.45% 11.37% 4.98% 13.09%
- ---------------------------
RATIOS TO AVERAGE NET
ASSETS
- ---------------------------
Expenses 1.10%* 1.08% 1.08% 1.09% 1.09% 1.05% 1.02% 1.01% 0.90%
- ---------------------------
Net investment income 5.22%* 5.91% 6.18% 5.56% 5.65% 6.18% 6.86% 7.07% 7.27%
- ---------------------------
Expense waiver/
reimbursement (b) 0.01%* 0.01% 0.00% 0.00% 0.00% 0.14% 0.33% 0.39% 0.83%
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
Net assets, end of period
(000 omitted) $356,775 $383,028 $426,010 $472,232 $458,331 $248,768 $135,628 $89,907 $62,501
- ---------------------------
Portfolio turnover 6 % 22% 13% 27% 7% 14% 18% 24% 24%
- ---------------------------
<CAPTION>
1988
<S> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 10.07
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.78
- ---------------------------
Net realized and
unrealized gain (loss) on
investments (0.36)
- --------------------------- ---------
Total from investment
operations 0.42
- --------------------------- ---------
LESS DISTRIBUTIONS
- ---------------------------
Distributions from net
investment income (0.73)
- --------------------------- ---------
NET ASSET VALUE, END OF
PERIOD $ 9.76
- --------------------------- ---------
TOTAL RETURN (A) 4.43%
- ---------------------------
RATIOS TO AVERAGE NET
ASSETS
- ---------------------------
Expenses 1.02%
- ---------------------------
Net investment income 8.03%
- ---------------------------
Expense waiver/
reimbursement (b) 0.70%
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
Net assets, end of period
(000 omitted) $25,151
- ---------------------------
Portfolio turnover 34%
- ---------------------------
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) 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)
Federated Municipal Opportunities Fund, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
February 28, 1997 (unaudited)
(1) ORGANIZATION
Federated Municipal Opportunities Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund offers 4 classes of shares:
Class A Shares, Class B Shares, Class C Shares and Class F Shares. The
investment objective is to provide a high level of current income which is
generally exempt from federal regular income tax.
Effective December 13, 1996 the assets of State Bond Minnesota Tax-Free Income
Fund and State Bond Tax Exempt Fund (the "Funds") were acquired by the Fund.
These Funds had net assets of approximately $19,208,906 and $80,622,957,
respectively.
(2) SIGNIFICANT ACCOUNTING POLICIES
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.
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. 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. Short-term securities are valued at the prices
provided by an independent pricing service. However, short-term securities
with remaining maturities of sixty days or less at the time of purchase may
be valued at amortized cost, which approximates fair market value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--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").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--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
provisions for federal tax are necessary. At August 31, 1996, the Fund, for
federal tax purposes, had a capital loss carryforward of $10,340,451, 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:
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
<S> <C>
1998 $ 168,972
1999 47,025
2000 68,565
2001 57,182
2002 556,193
2003 5,647,830
2004 3,794,684
</TABLE>
EQUALIZATION--The Fund follows the accounting practice known as
equalization. With equalization, a portion of the proceeds from sales and
costs of redemptions of fund shares equivalent (on a per share basis) to
the amount of undistributed net investment income on the date of the
transaction is credited or charged to undistributed net investment income.
As a result, undistributed net investment income per share is unaffected by
sales or redemptions of fund shares.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--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.
USE OF ESTIMATES--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.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At February 28, 1997, par value shares ($0.001 per share) authorized were as
follows.
<TABLE>
<CAPTION>
NUMBER OF PAR VALUE
SHARE CLASS NAME CAPITAL STOCK AUTHORIZED
<S> <C>
Class A Shares 500,000,000
Class B Shares 500,000,000
Class C Shares 500,000,000
Class F Shares 500,000,000
</TABLE>
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, 1997 AUGUST 31, 1996
(A)SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS A SHARES
- ------------------------------------------------------
Shares sold 424,786 $ 4,328,941 28.662 $ 299.97
- ------------------------------------------------------
Shares issued in connection with the
acquisition 9,405,099 93,815,812 -- --
- ------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 61,273 639,296 0.049 0.51
- ------------------------------------------------------
Shares redeemed (658,677) (6,874,478) (0.048 ) (0.50 )
- ------------------------------------------------------ ---------- ------------- ----------- -----------
Net change resulting from Class A
share transactions 9,232,481 $ 91,909,571 28.663 $ 299.98
- ------------------------------------------------------ ---------- ------------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
FEBRUARY 28, 1997 AUGUST 31, 1996
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS B SHARES
- ---------------------------------------------------------
Shares sold 870,013 $ 9,085,708 28.662 $ 299.97
- ---------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 4,640 48,460 0.049 0.51
- ---------------------------------------------------------
Shares redeemed (24,126) (250,916) (0.048) (0.50)
- --------------------------------------------------------- --------- ------------ --------- -----------
Net change resulting from Class B
share transactions 850,527 $ 8,883,252 28.663 $ 299.98
- --------------------------------------------------------- --------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
FEBRUARY 28, 1997 AUGUST 31, 1996(A)
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS C SHARES
- ---------------------------------------------------------
Shares sold 153,433 $ 1,602,556 28.662 $ 299.97
- ---------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 2,171 22,667 0.049 0.51
- ---------------------------------------------------------
Shares redeemed (106) (1,112) (0.048) (0.50)
- --------------------------------------------------------- --------- ------------ --------- -----------
Net change resulting from Class C
share transactions 155,498 $ 1,624,111 28.663 $ 299.98
- --------------------------------------------------------- --------- ------------ --------- -----------
</TABLE>
(a) For the period from August 5, 1996 to August 31, 1996.
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEBRUARY 28, 1997 AUGUST 31, 1996
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS F SHARES
- -----------------------------------------------
Shares sold 707,452 $ 7,387,719 1,882,962 $ 20,141,547
- -----------------------------------------------
Shares issued to shareholders in
payment of distributions declared 599,582 6,245,457 1,401,501 14,912,186
- -----------------------------------------------
Shares redeemed (4,368,155) (45,616,254) (5,975,778) (63,560,849)
- ----------------------------------------------- ----------- -------------- ------------- --------------
Net change resulting from Class F
share transactions (3,061,121) $ (31,983,078) (2,691,315) $ (28,507,116)
- ----------------------------------------------- ----------- -------------- ------------- --------------
Net change resulting from share transactions 7,177,385 70,433,856 (2,691,229) (28,506,216)
- ----------------------------------------------- ----------- -------------- ------------- --------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.60% of the Fund's average daily net assets.
ADMINISTRATIVE FEE--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 the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of average daily net assets of the Fund shares for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
DISTRIBUTION SERVICES FEE--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., the principal distributor, from the net
assets of the Fund to finance activities intended to result in the sale of the
Fund's Class B and Class C shares. The Plan provides that the Fund may incur
distribution expenses according to the following schedule annually, to
compensate Federated Securities Corp.
Federated Municipal Opportunities Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF AVG. DAILY NET
SHARE CLASS NAME ASSETS OF CLASS
<S> <C>
Class B Shares 0.75%
Class C Shares 0.75%
</TABLE>
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("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.
PORTFOLIO ACCOUNTING FEES--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.
INTERFUND TRANSACTIONS--During the period ended February 28, 1997, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchases and sale
transactions were made at current market value pursuant to Rule 17a-7 under the
Act amounting to $52,850,000 and $43,842,500, respectively.
GENERAL--Certain of the Officers and Directors of the Fund are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term for the period ended
February 28, 1997, were as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
PURCHASES $ 39,320,055
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 22,893,324
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(6) INVESTMENT RISK
INVESTMENT RISK--Although the Fund has a diversified portfolio, the Fund has 34%
of its portfolio invested in lower rated and comparable quality unrated high
yield securities. Investments in higher yield securities are accomplished by a
greater degree of credit risk and the risk tends to be more sensitive to
economic conditions than higher rated securities. The risk of loss due to
default by the issuer may be significantly greater for the holders of high
yielding securities because such securities are generally unsecured and are
often subordinated to other creditors of the issuer. The Fund held defaulted
securities with a value aggregating $11,605,150, representing 2.50% of the
Fund's net assets at February 28, 1997.
Directors Officers
- --------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Richard B. Fisher Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President,
John E. Murray, Jr. Treasurer and Secretary
Wesley W. Posvar S. Elliott Cohan
Marjorie P. Smuts 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 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.
[logo] FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
FEDERATED SECURITIES CORP. IS THE DISTRIBUTOR OF THE FUND
AND IS A SUBSIDIARY OF FEDERATED INVESTORS.
Cusip 313910200
Cusip 313910309
Cusip 313910408
Cusip 313910101
8040407 (4/97)
FEDERATED MUNICIPAL OPPORTUNITIES FUND, INC.
APPENDIX
A. The graphic representation here displayed consists of a boxed legend
in the upper left quadrant indicating the components of the corresponding
mountain chart. The gray shaded portion represents the value of reinvested
income for the fund. The orange shaded portion reflects the principal
value of $10,000 investment in the fund. The color-coded mountain chart is
a visual representation of the narrative text above it, which shows that an
initial investment of $10,000 in the fund on April 10, 1987 would have
grown to $19,561 on February 28, 1997. The "x" axis reflects computation
periods from April 10, 1987 to February 28, 1997. The right margin of the
chart reflects the ending value of a hypothetical investment of $10,000 in
the fund measured in increments of $2,000 ranging from $0 to $20,000.
B. The graphic representation here displayed consists of a boxed legend
in the upper left quadrant indicating the components of the corresponding
mountain chart. The gray shaded portion represents the value of reinvested
income for the fund. The orange shaded portion reflects the value of
annual investments of $1,000 in the fund from April 10, 1987 to February
28, 1997. The color-coded mountain chart is a visual representation of the
narrative text above it, which shows that annual investments of $1,000 in
the fund from April 10, 1987 to February 28, 1997 would have grown to
$14,295 on February 28, 1997. The "x" axis reflects computation periods
from April 10, 1987 to February 28, 1997. The right margin of the chart
reflects the ending value of a hypothetical annual investments of $1,000 in
the fund from April 10, 1987 to February 28, 1997 measured in increments of
$3,000 ranging from $0 to $15,000.
C. The graphic representation here displayed consists of a boxed legend
in the upper left quadrant indicating the components of the corresponding
mountain chart. The gray shaded portion represents the value of reinvested
income for the fund. The orange shaded portion reflects the principal
value of $5,000 investment in the fund combined with monthly investments of
$500. The color-coded mountain chart is a visual representation of the
narrative text above it, which shows that an initial investment of $5,000
investment in the fund combined with monthly investments of $500 in the
fund begininng on April 10, 1987 would have grown to $90,941 on February
28, 1997. The "x" axis reflects computation periods from April 10, 1987 to
February 28, 1997. The right margin of the chart reflects the ending value
of a hypothetical investment of $5,000 in the fund combined with monthly
investments of $500 begininng on April 10, 1987 and ending on February 28,
1997, this is measured in increments of $10,000 ranging from $0 to
$100,000.
