PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Trust for
Government Cash Reserves, which covers the six-month period ended May 31, 1995.
The Report includes the Investment Review and Financial Statements, which
contain the Portfolio of Investments.
This money market mutual fund pursues daily income with the additional
advantages of daily liquidity and stability of principal*--all through a
portfolio composed exclusively of U.S Treasury and government agency
obligations. The trust's income may be exempt from state and local taxes.
Because the trust does not invest in repurchase agreements, it is suitable for
tax-sensitive investors in states that tax the income on these securities.
At the end of the period, the trust's net assets stood at $937 million.
Dividends paid to shareholders during the period totaled $27.8 million, or $0.03
per share.
Thank you for your confidence in Trust for Government Cash Reserves. We will
continue to keep you up to date on your investment, and welcome your comments
and suggestions.
Sincerely,
[SIGNATURE]
Glen R. Johnson
President
June 15, 1995
* ALTHOUGH MONEY MARKET MUTUAL FUNDS SEEK TO MAINTAIN A STABLE NET ASSET VALUE
OF $1.00 PER SHARE, THERE IS NO ASSURANCE THAT THEY WILL BE ABLE TO DO SO.
INVESTMENTS IN MUTUAL FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.
1
INVESTMENT REVIEW
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Trust for Government Cash Reserves, which is rated AAAm by Standard & Poor's
Ratings Group and Aaa by Moody's Investors Service, Inc.,* is invested in U.S.
Treasury and U.S. government agency obligations only. The trust continues to
invest in issues of the Student Loan Marketing Association, Federal Farm Credit
Bank System, and Federal Home Loan Bank System, and maintains a small Treasury
position for liquidity purposes. The trust does not invest in repurchase
agreements, and is managed to provide distributions which are exempt from state
and local taxes. Recently, the trust has been managed within an average maturity
range of 35-45 days.
The Federal Reserve Board (the "Fed") continued to tighten monetary policy over
the semi-annual reporting period, raising the Fed funds target range on February
1, 1995, from 5.5% to 6%. The move was the seventh taken by the Fed since it
began to restrict monetary policy in February 1994, in the face of strong
economic growth. Economic reports since early February 1995, however, have
pointed to a slowing in the growth of the economy, and shortly after the end of
the reporting period in early July, the Fed eased monetary policy by 25 basis
points amid signs of restrained inflation.
Movements in short-term interest rates were mixed over the reporting period.
While the yield on the three-month Treasury bill rose modestly, from 5.7% to
5.8%, yields on the six-month and one-year Treasury bills fell rather
significantly, with the six-month bill declining from 6.2% to 5.8% and the
one-year bill from 6.8% to 5.8%. The result was a dramatic flattening in the
front end of the yield curve as expectations about the direction and magnitude
of future policy adjustments from the Fed changed.
The trust's portfolio continues to be barbelled in structure, which provides a
competitive yield. Over one-third of the trust is invested in U.S. government
agency floating rate notes, including a position in a Student Loan Marketing
Association master note, which helps to provide liquidity for the trust. This
floating rate position is combined with short-term agency discount notes to
comprise the short end of the barbell. The trust combines this short position
with Treasury and agency securities with longer maturities of six to twelve
months.
Over the reporting period, the trust's average maturity lengthened moderately,
moving from a 30-40 day average maturity target range to a 35-45 day range. The
trust is expected to maintain this posture in the near future, seeking to
maximize its performance through ongoing relative value analysis. However,
changing economic and market developments are continuously monitored to best
serve our clients attracted to the short-term U.S. government market.
* THESE RATINGS ARE OBTAINED AFTER INDEPENDENT RATING AGENCIES EVALUATE A NUMBER
OF FACTORS, INCLUDING CREDIT QUALITY, MARKET PRICE EXPOSURE AND MANAGEMENT.
THEY MONITOR THE PORTFOLIO WEEKLY FOR DEVELOPMENTS THAT COULD CAUSE CHANGES IN
THE RATINGS.
2
TRUST FOR GOVERNMENT CASH RESERVES
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
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<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ----------------- ------------------------------------------------------------ ------------
<C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--102.4%
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$111,730,000 (a) Federal Farm Credit Bank, Discount Notes, 5.30%-6.38%,
6/5/1995-2/22/1996 $110,916,446
------------------------------------------------------------
23,600,000 Federal Home Loan Bank Notes, 6.05%-6.85%,
2/28/1996-6/13/1996 23,607,840
------------------------------------------------------------
479,075,000 (a) Federal Home Loan Bank, Discount Notes, 5.35%-6.55%,
6/1/1995-1/5/1996 475,851,331
------------------------------------------------------------
78,000,000 (b) Federal Home Loan Bank, Floating Rate Notes, 5.78%-6.11%,
6/1/1995-6/6/1995 77,991,576
------------------------------------------------------------
5,000,000 Student Loan Marketing Assoc., 6.943%, 2/21/1996 5,006,301
------------------------------------------------------------
78,000,000 (b) Student Loan Marketing Assoc., Floating Rate Master Notes,
5.77%, 6/6/1995 78,000,000
------------------------------------------------------------
153,105,000 (b) Student Loan Marketing Assoc., Floating Rate Notes,
5.97%-6.245%, 6/6/1995 153,219,240
------------------------------------------------------------
35,000,000 (a) Tennessee Valley Authority, Discount Notes, 5.89%-5.92%,
6/1/1995-6/21/1995 34,967,278
------------------------------------------------------------ ------------
TOTAL SHORT-TERM U.S. GOVERNMENT OBLIGATIONS 959,560,012
------------------------------------------------------------ ------------
U.S. TREASURY OBLIGATIONS--1.6%
- --------------------------------------------------------------------------------
15,000,000 (a) U.S. Treasury Bills, 5.24%-6.505%, 6/29/1995-8/24/1995 14,850,044
------------------------------------------------------------ ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (C) $974,410,056
------------------------------------------------------------ ------------
------------
<FN>
(a) Each issue shows the rate of discount at time of purchase.
(b) Denotes variable rate securities which show current rate and next demand
date.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($936,956,357) at May 31, 1995.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
3
TRUST FOR GOVERNMENT CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------
Investments in securities, at amortized cost and
value $974,410,056
- -----------------------------------------------------------------
Income receivable 3,578,478
- -----------------------------------------------------------------
Receivable for shares sold 72,906
- ----------------------------------------------------------------- ------------
Total assets 978,061,440
- -----------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------
Payable for investments purchased $18,098,639
- ---------------------------------------------------
Payable for shares redeemed 18,489,621
- ---------------------------------------------------
Income distribution payable 4,275,263
- ---------------------------------------------------
Accrued expenses 82,508
- ---------------------------------------------------
Payable to Bank 159,052
- --------------------------------------------------- -----------
Total liabilities 41,105,083
- ----------------------------------------------------------------- ------------
NET ASSETS for 936,956,357 shares outstanding $936,956,357
- ----------------------------------------------------------------- ------------
------------
NET ASSET VALUE, Offering Price and Redemption
Proceeds Per Share:
($936,956,357 DIVIDED BY 936,956,357 shares
outstanding) $ 1.00
- ----------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
4
TRUST FOR GOVERNMENT CASH RESERVES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------
Interest $30,112,805
- ------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------
Investment advisory fee $2,017,168
- -----------------------------------------------------
Administrative personnel and services fee 381,749
- -----------------------------------------------------
Custodian fees 90,772
- -----------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 10,086
- -----------------------------------------------------
Directors'/Trustees' fees 10,556
- -----------------------------------------------------
Auditing fees 8,008
- -----------------------------------------------------
Legal fees 8,554
- -----------------------------------------------------
Portfolio accounting fees 60,515
- -----------------------------------------------------
Shareholder services fee 252,146
- -----------------------------------------------------
Share registration costs 10,192
- -----------------------------------------------------
Printing and postage 3,276
- -----------------------------------------------------
Insurance premiums 10,010
- -----------------------------------------------------
Taxes 182
- -----------------------------------------------------
Miscellaneous 4,550
- ----------------------------------------------------- ----------
Total expenses 2,867,764
- -----------------------------------------------------
Deduct--Waiver of investment advisory fee 598,451
- ----------------------------------------------------- ----------
Net expenses 2,269,313
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Net investment income $27,843,492
- ------------------------------------------------------------------ -----------
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
5
TRUST FOR GOVERNMENT CASH RESERVES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, 1995 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1994
--------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------
OPERATIONS--
- ---------------------------------------------
Net investment income $ 27,843,492 $ 36,565,085
- --------------------------------------------- --------------- ------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------
Distributions from net investment income (27,843,492) (36,565,085)
- --------------------------------------------- --------------- ------------------
SHARE TRANSACTIONS--
- ---------------------------------------------
Proceeds from sale of Shares 1,778,991,416 3,126,914,918
- ---------------------------------------------
Net asset value of Shares issued to
shareholders in payment of distributions
declared 2,296,588 3,033,072
- ---------------------------------------------
Cost of Shares redeemed (1,823,022,983) (3,211,611,415)
- --------------------------------------------- --------------- ------------------
Change in net assets resulting from share
transactions (41,734,979) (81,663,425)
- --------------------------------------------- --------------- ------------------
Change in net assets (41,734,979) (81,663,425)
- ---------------------------------------------
NET ASSETS:
- ---------------------------------------------
Beginning of period 978,691,336 1,060,354,761
- --------------------------------------------- --------------- ------------------
End of period $ 936,956,357 $ 978,691,336
- --------------------------------------------- --------------- ------------------
--------------- ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
6
TRUST FOR GOVERNMENT CASH RESERVES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MAY YEAR ENDED NOVEMBER 30,
31, 1995 ---------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989(a)
- -------------------------------------------------- ----------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------
Net investment income 0.03 0.04 0.03 0.04 0.06 0.08 0.06
- --------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------
Distributions from net investment income (0.03) (0.04) (0.03) (0.04) (0.06) (0.08) (0.06)
- -------------------------------------------------- ----------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------- ----------- -------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- -------- --------
TOTAL RETURN (b) 2.79% 3.74% 2.87% 3.58% 5.95% 7.94% 5.93%
- --------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------
Expenses 0.45%(c) 0.45% 0.45% 0.47% 0.47% 0.45% 0.43%(c)
- --------------------------------------------------
Net investment income 5.52%(c) 3.68% 2.83% 3.54% 5.76% 7.65% 8.34%(c)
- --------------------------------------------------
Expense waiver/reimbursement (d) 0.12%(c) 0.10% 0.03% 0.02% 0.02% 0.08% 0.19%(c)
- --------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------
Net assets, end of period (000 omitted) $936,956 $978,691 $1,060,355 $1,145,009 $1,251,692 $880,997 $331,860
- --------------------------------------------------
<FN>
(a) Reflects operations for the period from March 30, 1989 (date of initial
public investment) to November 30, 1989. For the period from start of
business, March 20, 1989, to March 29, 1989, the net invetment income was
distributed to the Trust's adviser.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
7
TRUST FOR GOVERNMENT CASH RESERVES
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Trust for Government Cash Reserves (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
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 Trust'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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust 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.
OTHER--Investment transactions are accounted for on the trade date.
8
TRUST FOR GOVERNMENT CASH RESERVES
- ---------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
At May 31, 1995, capital paid-in aggregated $936,956,357. Transactions in shares
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1995 NOVEMBER 30, 1994
- ---------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Shares sold 1,778,991,416 3,126,914,918
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 2,296,588 3,033,072
- ----------------------------------------------------
Shares redeemed (1,823,022,983) (3,211,611,415)
- ---------------------------------------------------- ------------------ ------------------
Net change resulting from share transactions (41,734,979) (81,663,425)
- ---------------------------------------------------- ------------------ ------------------
------------------ ------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Trust's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The FAS fee 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 Trust will pay FSS up to .25 of
1% of average daily net assets of the Trust for the period. The fee is to obtain
certain personal services for shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Trust. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting records
for which it receives a fee. The fee is based on the level of the Trust's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
9
<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
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. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the Trust's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
10
- --------------------------------------------------------------------------------
TRUST FOR
- --------------------------------------------------------------------------------
GOVERNMENT
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
RESERVES
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
MAY 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED
INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 89833H108
0062905 (7/95) --------------------------------------
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