Limited Term Municipal Fund
(A Portfolio of Fixed Income Securities, Inc.)
Class A Shares
Supplement to Prospectus dated January 31, 1995
A.Please delete the Summary of Fund Expenses table on page 1, and insert the
following table in its place:
Summary of Fund Expenses
Class A Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)
1.00%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)
None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable)(1)
0.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)
None
Exchange Fee None
Annual Class A Shares Operating Expenses
(As a percentage of average net assets)
Management Fee (after waiver)(2) 0.00%
12b-1 Fee
0.25%
Total Other Expenses (after expense reimbursement)
0.25%
Shareholder Services Fee 0.25%
Total Class A Shares Operating Expenses (3)
0.50%
(1) Class A Shares purchased with proceeds of a redemption of shares of an
unaffiliated investment company purchased or redeemed with a sales load and
not distributed by Federated Securities Corp. may be charged a contingent
deferred sales charge of .50 of 1.00% for redemptions made within one full
year of purchase. See "Contingent Deferred Sales Charge."
(2) The management fee has been reduced to reflect the voluntary waiver of
the management fee. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.40%.
(3) The total Class A Shares operating expenses in the table above are
based on expenses expected during the fiscal year ending November 30, 1995.
The total Class A Shares operating expenses were 0.63% for the fiscal year
ended November 30, 1994, and would have been 1.57% absent the voluntary
waiver of the management fee and the voluntary reimbursement of certain
other operating expenses.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class A Shares of the Fund
will bear, either directly or indirectly. For more complete descriptions of
the various costs and expenses, see "Investing in Class A Shares" and "Fixed
Income Securities, Inc.". Wire--transferred redemptions of less than
$5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.
EXAMPLE 1 year 3 years 5
years 10 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and
(2) redemption at the end of each time period.....
$20 $26 $38 $72
You would pay the following expenses on the same
investment, assuming no redemption.....
$15 $26 $38 $72
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
The information set forth in the foregoing table and example relates only
to Class A Shares of the Fund. The Fund also offers another class of shares
called Fortress Shares. Class A Shares and Fortress Shares are subject to
certain of the same expenses; however, Fortress Shares can be subject to a
12b-1 fee of up to 0.15% and a contingent deferred sales charge of 1.00%,
but are not subject to a sales load. See "Other Classes of Shares".
B.Please delete the second sentence of the first paragraph of the section
entitled "Other Classes of Shares" on page 27, and replace it with the
following:
"The Fortress Shares are sold at net asset value and are subject to a
contingent deferred sales charge."
July 14, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
338319505
G00140-06 (7/95)
Limited Term Municipal Fund
(A Portfolio of Fixed Income Securities, Inc.)
Fortress Shares
Supplement to Prospectus dated January 31, 1995
A.Please delete the Summary of Fund Expenses table on page 1 and insert the
following table in its place:
Summary of Fund Expenses
Fortress Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)
None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)
None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable) (1)
1.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)
None
Exchange Fee None
Annual Fortress Shares Operating Expenses
(As a percentage of average net assets)
Management Fee (after waiver)(2) 0.00%
12b-1 Fee (3)
0.00%
Total Other Expenses (after expense reimbursement)
0.25%
Shareholder Services Fee 0.25%
Total Fortress Shares Operating Expenses (4)
0.25%
(1) The contingent deferred sales charge of 1.00% is the lesser of the
original purchase price or the net asset value of shares redeemed within
four years of their purchase date. For a more complete description see
"Redeeming Fortress Shares".
(2) The management fee has been reduced to reflect the voluntary waiver
of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is
0.40%.
(3) The Fortress Shares has no present intention of paying or accruing
the 12b-1 fee during the fiscal year ending November 30, 1995. If the
Fortress Shares were paying or accruing the 12b-1, the Fortress Shares
would be able to pay up to 0.15% of its average daily net assets for the
12b-1 fee. See "Fund Information".
(4) The total Fortress Shares operating expenses in the table above are
based on expenses expected during the fiscal year ending November 30,
1995. The total Fortress Shares operating expenses were 0.44% for the
fiscal year ended November 30, 1994, and would have been 1.38% absent
the voluntary waiver of the management fee and the voluntary
reimbursement of certain other operating expenses.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Fortress Shares of the
Fund will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Investing in
Fortress Shares" and "Fixed Income Securities, Inc.". Wire--transferred
redemptions of less than $5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the
National Association of Securities Dealers, Inc.
EXAMPLE 1 year 3 years 5
years 10 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and
(2) redemption at the end of each time period.....
$13 $20 $14 $32
You would pay the following expenses on the same
investment, assuming no redemption..... $3 $8
$14 $32
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those
shown.
The information set forth in the foregoing table and example relates
only to Fortress Shares of the Fund. The Fund also offers another class
of shares called Class A Shares. Fortress Shares and Class A Shares are
subject to certain of the same expenses; however, Class A Shares are
subject to a 12b-1 fee of up to 0.25% and a sales load of 1.00% but are
not subject to a contingent deferred sales charge. See "Other Classes
of Shares".
B.Please delete the first sentence of the third paragraph of the section
entitled "General Information" on page 3, and replace it with the following:
"Shares are sold at net asset value and are redeemed at net asset value."
C.Please delete the first paragraph of the section entitled "What Shares
Cost" on page 15, and replace it with the following:
"Shares are sold at their net asset value next determined after an order is
received. Financial institutions may charge fees for services provided
which may relate to ownership of Fund Shares. This prospectus should,
therefore, be read together with any agreement between the customer and the
institution with regard to services provided and the fees charged for these
services."
D. Please delete the sub-section entitled "Dealer Concession" on page 15.
E.Please delete the section entitled "Eliminating the Sales Load" which
begins on page 16 and includes the following sub-sections:
"Quantity Discounts and Accumulated Purchases", "Letter of Intent",
"Reinvestment Privilege", and "Concurrent Purchases." In addition,
please delete the heading "Eliminating the Sales Load" from the Table of
Contents.
F.Please delete the second sentence of the section entitled "Systematic
Investment Program" on page 17, and replace it with the following:
"Under this program, funds may be automatically withdrawn monthly from the
shareholder's checking account maintained at an Automated Clearing House
("ACH") member institution, and invested in Shares at the net asset value
next determined after an order is received by Federated Services Company."
G.Please delete the second paragraph of the section entitled "Exchange
Privilege" on page 18, and replace it with the following:
"The ability to exchange Shares is available to shareholders residing in any
state in which the shares being acquired may be legally sold. Shareholders
using this privilege must exchange Shares having a net asset value which at
least meets the minimum investment required for the fund into which the
exchange is being made. A shareholder may obtain further information on the
exchange privilege, and may obtain prospectuses for other Fortress
Funds and Federated Funds by calling Federated Securities Corp. or
his financial institution.
Before making an exchange, a shareholder must receive a prospectus of the
fund for which the exchange is being made.
Exercise of the exchange privilege is treated as a sale for federal income
tax purposes. Depending on the circumstances, a short or long-term capital
gain or loss may be realized."
H.Please delete the section entitled "Exchanges for Shares of Other Funds"
on page 21. Additionally, please delete the heading "Exchanges for Shares
of Other Funds" from the Table of Contents.
I.Please delete the fourth paragraph of the section entitled "Performance
Information" on page 27, and replace it with the following:
"The performance information reflects the effect of the contingent deferred
sales charge which, if excluded, would increase the total return, yield,
and tax-equivalent yield."
July 14, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
338319403
G00140-05(7/95)
