LIBERTY UTILITY FUND, INC.
Class A Shares
Class B Shares
Class C Shares
SUPPLEMENT TO COMBINED PROSPECTUS DATED MAY 31, 1995
Effective March 31, 1996, the name of "Liberty Utility Fund, Inc." has been
changed to "Federated Utility Fund, Inc." Accordingly, all references to
Liberty Utility Fund, Inc. in the Combined Prospectus should reflect this
change.
Effective March 30, 1996, Liberty Utility Fund, Inc. has added a separate
class of shares known as Class F Shares. A Prospectus for Class F Shares of
the Fund is available by contacting your financial institution.
A. Please replace the last sentence of the first paragraph of the section
entitled "Synopsis" on page 7 and replace it with the following:
"With respect to the Fund, the Board of Directors has established four
classes of shares, known as Class A Shares, Class B Shares, Class C Shares
and Class F Shares (individually and collectively as the context requires,
"Shares"). This prospectus relates only to the Class A Shares, Class B
Shares and Class C Shares of the Fund."
B. Please delete the last three paragraphs of the section entitled
"Performance Information" on page 35 and replace them with the following:
"Total return and yield will be calculated separately for Class A Shares,
Class B Shares, Class C Shares, and Class F Shares. Because Class B Shares
and Class C Shares are subject to Rule 12b-1 fees, the yield for Class A
Shares and Class F Shares, for the same period, may exceed that of Class B
Shares and Class C Shares. Because Class A Shares are subject to a higher
maximum sales charge, the total return for Class B Shares, Class C Shares
and Class F Shares, for the same period, will exceed that of Class A
Shares.
From time to time, advertisements for the Class A Shares, Class B Shares,
Class C Shares and Class F Shares of the Fund may refer to ratings,
rankings, and other information in certain financial publications and/or
compare the performance of Class A Shares, Class B Shares, Class C Shares
and Class F Shares to certain indices."
C. Please add the following as a main section after the section entitled
"Performance Information" on page 35:
OTHER CLASSES OF SHARES
"The Fund also offers another class of shares called Class F Shares. Class
F Shares are sold subject to a front-end sales charge, a contingent
deferred sales charge, a Shareholder Services Agreement, and a minimum
initial investment of $1500, unless the investment is in a retirement
account in which the minimum investment is $50.
Class A Shares, Class B Shares, Class C Shares and Class F Shares are
subject to certain of the same expenses; however, the front-end sales
charge for Class F Shares is lower than that for Class A Shares. Expense
differences between Class A Shares, Class B Shares, Class C Shares and
Class F Shares may affect the performance of each class.
To obtain more information and a prospectus for Class F Shares, investors
may call 1-800-235-4669 or contact their financial institution."
D. Please delete the first sentence in the section entitled "Dividends" on
page 29 and replace it with the following:
"Dividends are declared and paid monthly to all shareholders invested in
the Fund on the record date."
Please delete the last sentence in the section entitled "Dividends" on page
29 and replace it with the following:
"If Shares are redeemed or exchanged prior to the record date or purchased
after the record date, those Shares are not entitled to that month's
dividend."
March 30, 1996
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
Federated Investors Tower
PITTSBURGH, PA 15222-3779
CUSIP 531545101
CUSIP 531545309
CUSIP 531545200
