PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Government
Cash Series, which covers the six-month period ended November 30, 1995. The
report begins with an investment review by the fund's portfolio manager, which
is followed by a complete listing of the fund's investments and its financial
statements.
During the reporting period, Government Cash Series helped its shareholders earn
a total of $0.03 in dividends per share on their ready cash, while offering the
advantages of daily liquidity and stability of principal.*
At the end of the reporting period, the fund's net assets stood at $464 million,
with 46.3% of the assets invested in securities issued by the United States
Treasury and various government agencies, including the Federal Farm Credit
Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Association, Federal
National Mortgage Association, and Student Loan Marketing Association. More than
54% of the fund's assets were invested in repurchase agreements backed by
government and/or agency securities, because repurchase agreements offered a
yield advantage over many direct government obligations.
Thank you for choosing Government Cash Series as a convenient way to put your
cash to work pursuing income from U.S. government securities. Please contact
your investment representative if you have any questions about the fund.
Sincerely,
LOGO
Richard B. Fisher
President
January 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Government Cash Series is invested in direct U.S. Treasury and U.S. government
agency obligations and in repurchase agreements which have these securities as
collateral. The fund continues to invest in issues of the Federal National
Mortgage Association, Student Loan Marketing Association, Federal Farm Credit
Bank System, Federal Home Loan Bank System, and Federal Home Loan Mortgage
Corp., and maintains a small Treasury position for liquidity purposes.
Over the six-month reporting period ended November 30, 1995, the Federal Reserve
Board (the "Fed") reversed course in monetary policy, lowering the federal funds
target rate by 25 basis points in early July, 1995 from 6% to 5.75%. This easing
in monetary policy came on the heels of seven consecutive tightenings from
February, 1994 to February, 1995, which brought the Fed funds target rate from
3% to 6%. The Fed cited receding inflationary pressures as the reason for the
ease, although weak economic reports in the second quarter of 1995 were also
thought to have had an influence.
Short-term interest rates led the Fed move downward. The rate on the three-month
Treasury bill declined by 30 basis points over the reporting period, from 5.8%
to 5.5%. The front end of the yield curve inverted over the reporting period,
with the one-year Treasury bill trading 12 basis points below the three-month
Treasury bill at the end of November, 1995. This change in shape was a result of
growing market expectations of additional Fed easing in the not too distant
future. Shortly after the end of the reporting period, at its Federal Open
Market Committee Meeting on December 19, 1995, the Fed confirmed market
expectations by voting to ease monetary policy slightly, reducing the federal
funds target rate from 5.75% to 5.5%. The Fed again cited a better-than-expected
outlook for inflation as the driving force behind the move.
Over the reporting period, the market was also influenced by the ongoing budget
negotiations in Washington, D.C. The Treasury auction schedule was disrupted in
late October and early November as the debt ceiling was temporarily reached.
Currently, the federal government is experiencing its second partial shutdown
since the negotiations began, as Congress and the White House appear to have
reached an impasse. Nevertheless, expectations of a positive outcome toward
credible deficit reduction resulting from the talks have been priced into the
market.
Recently, the fund has been managed with a 40- to 50-day average maturity target
range, a moderately bullish stance in anticipation of further gradual eases by
the Fed. In spite of third quarter GDP growth at 4.2%, recent data on the
economy has been somewhat mixed, with the retail and manufacturing sectors
relatively sluggish. Fourth quarter growth is expected to have been closer to
the 2 1/2% rate of growth considered by many to be non-inflationary. With
monetary policy still considered by many to be slightly restrictive, we would
expect to see another slight easing in the federal funds target rate by the end
of the first quarter of 1996.
The fund structure continues to be barbelled in nature, and maximizes
performance through ongoing relative value analysis. As a yield advantage
continued to exist for investments in repurchase agreements versus direct
investments in short-term Treasury and agency securities, a substantial
percentage of the fund's investments remained in repurchase agreements. The fund
continued to combine attractive yields from repurchase agreements collateralized
by U.S. government mortgage-backed securities with short-term agency floating
rate notes and Treasury and agency securities with longer maturities of 6 to 13
months.
GOVERNMENT CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------------------------------------------------------------
<C> <C> <S> <C>
SHORT-TERM OBLIGATIONS--46.3%
- ----------------------------------------------------------------------------------
(A) FEDERAL FARM CREDIT BANK, NOTE--0.6%
-----------------------------------------------------------------
$ 3,000,000 7.90%, 3/1/1996 $ 3,007,797
----------------------------------------------------------------- ------------
(A) FEDERAL FARM CREDIT BANK, DISCOUNT NOTE--0.4%
-----------------------------------------------------------------
2,000,000 6.17%, 2/23/1996 1,971,207
----------------------------------------------------------------- ------------
FEDERAL HOME LOAN BANK, NOTES--3.1%
-----------------------------------------------------------------
5,000,000 6.01%, 6/3/1996 5,006,209
-----------------------------------------------------------------
4,000,000 6.05%, 6/13/1996 4,001,854
-----------------------------------------------------------------
3,500,000 6.05%, 6/5/1996 3,497,779
-----------------------------------------------------------------
2,000,000 6.85%, 2/28/1996 2,001,095
----------------------------------------------------------------- ------------
Total 14,506,937
----------------------------------------------------------------- ------------
(A) FEDERAL HOME LOAN BANK, DISCOUNT NOTES--1.9%
-----------------------------------------------------------------
3,000,000 5.96%, 1/16/1996 2,977,153
-----------------------------------------------------------------
3,000,000 6.06%, 12/26/1995 2,987,375
-----------------------------------------------------------------
3,000,000 6.06%, 12/21/1995 2,989,900
----------------------------------------------------------------- ------------
Total 8,954,428
----------------------------------------------------------------- ------------
(B) FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--3.7%
-----------------------------------------------------------------
2,000,000 5.66%, 12/1/1995 1,998,784
-----------------------------------------------------------------
7,000,000 5.72%, 12/1/1995 6,995,481
-----------------------------------------------------------------
8,000,000 5.74%, 12/1/1995 7,998,777
----------------------------------------------------------------- ------------
Total 16,993,042
----------------------------------------------------------------- ------------
(A) FEDERAL HOME LOAN MORTGAGE ASSOCIATION, DISCOUNT NOTES--6.5%
-----------------------------------------------------------------
12,000,000 5.53%, 2/20/1996 11,850,690
-----------------------------------------------------------------
7,329,000 5.58%, 2/8/1996 7,250,616
-----------------------------------------------------------------
10,000,000 5.59%, 12/1/1995 10,000,000
-----------------------------------------------------------------
1,000,000 6.57%, 2/8/1996 987,398
----------------------------------------------------------------- ------------
Total 30,088,704
----------------------------------------------------------------- ------------
</TABLE>
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------------------------------------------------------------
<C> <C> <S> <C>
SHORT-TERM OBLIGATIONS--CONTINUED
- ----------------------------------------------------------------------------------
(A) FEDERAL NATIONAL MORTGAGE ASSOCIATION, NOTES--2.4%
-----------------------------------------------------------------
$ 3,400,000 5.41%, 12/6/1996 $ 3,394,594
-----------------------------------------------------------------
3,200,000 5.60%, 11/1/1996 3,195,447
-----------------------------------------------------------------
3,000,000 5.63%, 6/28/1996 2,998,541
-----------------------------------------------------------------
1,600,000 5.91%, 8/19/1996 1,603,251
----------------------------------------------------------------- ------------
Total 11,191,833
----------------------------------------------------------------- ------------
(A) FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--15.5%
-----------------------------------------------------------------
5,000,000 5.42%, 4/4/1996 4,905,903
-----------------------------------------------------------------
4,000,000 5.45%, 3/26/1996 3,929,755
-----------------------------------------------------------------
3,000,000 5.48%, 4/11/1996 2,939,720
-----------------------------------------------------------------
3,000,000 5.50%, 4/5/1996 2,942,250
-----------------------------------------------------------------
7,000,000 5.50%, 3/7/1996 6,896,264
-----------------------------------------------------------------
5,500,000 5.51%, 4/15/1996 5,385,514
-----------------------------------------------------------------
4,000,000 5.52%, 2/6/1996 3,958,907
-----------------------------------------------------------------
4,000,000 5.53%, 2/9/1996 3,956,989
-----------------------------------------------------------------
14,780,000 5.55%, 12/27/1995 14,720,844
-----------------------------------------------------------------
7,000,000 5.56%, 12/28/1995 6,970,810
-----------------------------------------------------------------
4,500,000 5.63%, 4/12/1996 4,406,401
-----------------------------------------------------------------
1,700,000 5.64%, 4/12/1996 1,664,578
-----------------------------------------------------------------
5,000,000 5.81%, 9/27/1996 4,998,766
-----------------------------------------------------------------
4,000,000 6.06%, 12/29/1995 3,981,147
----------------------------------------------------------------- ------------
Total 71,657,848
----------------------------------------------------------------- ------------
(B) FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES--3.7%
-----------------------------------------------------------------
3,500,000 5.43%, 12/5/1995 3,488,908
-----------------------------------------------------------------
7,000,000 5.58%, 12/5/1995 7,000,000
-----------------------------------------------------------------
6,500,000 5.79%, 12/1/1995 6,498,832
----------------------------------------------------------------- ------------
Total 16,987,740
----------------------------------------------------------------- ------------
</TABLE>
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------------------------------------------------------------
<C> <C> <S> <C>
SHORT-TERM OBLIGATIONS--CONTINUED
- ----------------------------------------------------------------------------------
STUDENT LOAN MORTGAGE ASSOCIATION, NOTE--0.4%
-----------------------------------------------------------------
$ 2,000,000 6.94%, 2/21/1996 $ 2,000,780
----------------------------------------------------------------- ------------
(B) STUDENT LOAN MORTGAGE ASSOCIATION, FLOATING RATES--4.0%
-----------------------------------------------------------------
4,500,000 5.63%, 12/5/1995 4,500,000
-----------------------------------------------------------------
8,000,000 5.73%, 12/5/1995 7,996,247
-----------------------------------------------------------------
6,150,000 5.88%, 12/5/1995 6,163,701
----------------------------------------------------------------- ------------
Total 18,659,948
----------------------------------------------------------------- ------------
(A) UNITED STATES TREASURY BILLS--1.7%
-----------------------------------------------------------------
2,500,000 5.27%, 6/27/1996 2,423,512
-----------------------------------------------------------------
3,000,000 5.30%, 5/16/1996 2,926,242
-----------------------------------------------------------------
2,600,000 5.45%, 5/30/1996 2,528,756
----------------------------------------------------------------- ------------
Total 7,878,510
----------------------------------------------------------------- ------------
UNITED STATES TREASURY NOTES--2.4%
-----------------------------------------------------------------
5,000,000 7.38%, 5/15/1996 5,032,180
-----------------------------------------------------------------
6,000,000 7.75%, 3/31/1996 6,040,855
----------------------------------------------------------------- ------------
Total 11,073,035
----------------------------------------------------------------- ------------
TOTAL SHORT-TERM OBLIGATIONS $214,971,809
----------------------------------------------------------------- ------------
(C)REPURCHASE AGREEMENTS--54.5%
- ----------------------------------------------------------------------------------
15,000,000 BT Securities Corp., 5.92%, dated 11/30/1995, due 12/1/1995 15,000,000
-----------------------------------------------------------------
3,800,000 Barclays de Zoete Wedd Securities, Inc., 5.93%, dated 11/30/1995,
due 12/1/1995 3,800,000
-----------------------------------------------------------------
20,000,000 Deutsche Bank Government Securities, 5.95%, dated 11/30/1995, due
12/1/1995 20,000,000
-----------------------------------------------------------------
20,000,000 Fuji Securities, Inc., 5.95%, dated 11/30/1995, due 12/1/1995 20,000,000
-----------------------------------------------------------------
60,000,000 Greenwich Capital Markets, Inc., 5.95%, dated 11/30/1995, due
12/1/1995 60,000,000
-----------------------------------------------------------------
20,000,000 HSBC Securities, Inc., 5.95%, dated 11/30/1995, due 12/1/1995 20,000,000
-----------------------------------------------------------------
20,000,000 Morgan Stanley & Co., Inc., 5.93%, dated 11/30/1995, due
12/1/1995 20,000,000
-----------------------------------------------------------------
20,000,000 PaineWebber, Inc., 5.95%, dated 11/30/1995, due 12/1/1995 20,000,000
-----------------------------------------------------------------
</TABLE>
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -----------------------------------------------------------------
<C> <C> <S> <C>
REPURCHASE AGREEMENTS--CONTINUED
- ----------------------------------------------------------------------------------
$20,000,000 Smith Barney Shearson, 5.94%, dated 11/30/1995, due 12/1/1995 $ 20,000,000
-----------------------------------------------------------------
20,000,000 SBC Capital Markets, New York, 5.93%, dated 11/30/1995, due
12/1/1995 20,000,000
-----------------------------------------------------------------
20,000,000 UBS Securities, Inc., 5.94%, dated 11/30/1995, due 12/1/1995 20,000,000
-----------------------------------------------------------------
5,000,000 (d)First Union Capital Markets Corp., 5.73%, dated 10/18/1995,
due 12/18/1995 5,000,000
-----------------------------------------------------------------
7,000,000 (d)Goldman, Sachs & Co., 5.70%, dated 10/18/1995, due 12/18/1995 7,000,000
-----------------------------------------------------------------
2,000,000 (d)Goldman, Sachs & Co., 5.73%, dated 10/23/1995, due 12/26/1995 2,000,000
----------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 252,800,000
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $467,771,809
----------------------------------------------------------------- ------------
</TABLE>
(a) Each issue shows the rate of discount at time of purchase.
(b) Denotes variable rate obligations which current rate and next reset date is
shown.
(c) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($464,089,036) at November 30, 1995.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in repurchase agreements $252,800,000
- -----------------------------------------------------------------
Investments in securities 214,971,809
- ----------------------------------------------------------------- ------------
Total investments, at amortized cost and value $467,771,809
- --------------------------------------------------------------------------------
Cash 137,142
- --------------------------------------------------------------------------------
Income receivable 1,246,346
- -------------------------------------------------------------------------------- ------------
Total assets 469,155,297
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $ 3,394,594
- -----------------------------------------------------------------
Income distribution payable 1,450,423
- -----------------------------------------------------------------
Accrued expenses 221,244
- ----------------------------------------------------------------- ------------
Total liabilities 5,066,261
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 464,089,036 shares outstanding $464,089,036
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
($464,089,036 / 464,089,036 shares outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $14,763,922
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $1,239,652
- ---------------------------------------------------------------------
Administrative personnel and services fee 187,683
- ---------------------------------------------------------------------
Custodian fees 78,099
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 126,197
- ---------------------------------------------------------------------
Directors'/Trustees' fees 2,928
- ---------------------------------------------------------------------
Auditing fees 6,771
- ---------------------------------------------------------------------
Legal fees 4,941
- ---------------------------------------------------------------------
Portfolio accounting fees 49,090
- ---------------------------------------------------------------------
Distribution services fee 867,757
- ---------------------------------------------------------------------
Shareholder services fee 619,826
- ---------------------------------------------------------------------
Share registration costs 12,444
- ---------------------------------------------------------------------
Printing and postage 10,797
- ---------------------------------------------------------------------
Insurance premiums 2,562
- ---------------------------------------------------------------------
Taxes 25,986
- ---------------------------------------------------------------------
Miscellaneous 5,490
- --------------------------------------------------------------------- ----------
Total expenses 3,240,223
- ---------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------
Waiver of investment advisory fee $ (154,976)
- --------------------------------------------------------
Waiver of distribution services fee (619,826)
- -------------------------------------------------------- ----------
Total waivers (774,802)
- --------------------------------------------------------------------- ----------
Net expenses 2,465,421
- ----------------------------------------------------------------------------------- -----------
Net investment income $12,298,501
- ----------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
----------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------
Net investment income $ 12,298,501 $ 17,758,338
- ------------------------------------------------------- ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------
Distributions from net investment income (12,298,501) (17,758,338)
- ------------------------------------------------------- ----------------- ---------------
SHARE TRANSACTIONS--
- -------------------------------------------------------
Proceeds from sale of shares 1,857,546,685 3,457,947,479
- -------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 8,345,395 13,027,588
- -------------------------------------------------------
Cost of shares redeemed (1,854,898,801) (3,419,213,014)
- ------------------------------------------------------- ----------------- ---------------
Change in net assets resulting from share
transactions 10,993,279 51,762,053
- ------------------------------------------------------- ----------------- ---------------
Change in net assets 10,993,279 51,762,053
- -------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------
Beginning of period 453,095,757 401,333,704
- ------------------------------------------------------- ----------------- ---------------
End of period $ 464,089,036 $ 453,095,757
- ------------------------------------------------------- ----------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MAY 31,
NOVEMBER 30, --------------------------------------------------------------------
1995 1995 1994 1993 1992 1991 1990(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 0.02 0.03 0.04 0.07 0.06
- -------------------------
LESS DISTRIBUTIONS
- -------------------------
Distributions from net
investment income (0.03) (0.04) (0.02) (0.03) (0.04) (0.07) (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) 2.51% 4.43% 2.45% 2.54% 4.33% 6.80% 6.53%
- -------------------------
RATIOS TO AVERAGE
NET ASSETS
- -------------------------
Expenses 0.99%* 0.99% 0.99% 0.99% 0.98% 0.94% 0.73%*
- -------------------------
Net investment income 4.95%* 4.35% 2.41% 2.53% 4.25% 6.48% 7.74%*
- -------------------------
Expense waiver/
reimbursement(c) 0.31%* 0.08% 0.09% 0.06% 0.06% 0.13% 0.32%*
- -------------------------
SUPPLEMENTAL DATA
- -------------------------
Net assets, end of
period (000 omitted) $464,089 $453,096 $401,334 $400,231 $550,675 $631,718 $493,995
- -------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 23, 1989 (date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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)
GOVERNMENT CASH SERIES
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, (the "Act") as an open-end, management investment company.
The Corporation consists of three diversified portfolios and one non-diversified
portfolio (Municipal Cash Series). The financial statements included herein are
only those of Government Cash Series (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(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--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors. Risks may
arise from the potential inability of counterparties to honor the terms of
the repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
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.
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1995, there were 12,500,000,000 shares of $0.001 par value
capital stock authorized. Capital paid-in aggregated $464,089,036. Transactions
in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
- -------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Shares sold 1,857,546,685 3,457,947,479
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 8,345,395 13,027,588
- --------------------------------------------------------
Shares redeemed (1,854,898,801) (3,419,213,014)
- -------------------------------------------------------- ---------------- --------------
Net change resulting from share transactions 10,993,279 51,762,053
- -------------------------------------------------------- ---------------- --------------
</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
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive a 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, under the Administrative
Services Agreement, provides the Fund with administrative personnel and
services. This 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.
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
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .35 of 1% of the average daily net assets of the shares,
annually, to reimburse FSC. FSC may voluntarily choose to waive a portion of its
fee. FSC can modify or terminate this voluntary waiver at any time at its sole
discretion.
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also 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.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
<TABLE>
<S> <C>
DIRECTORS OFFICERS
- -------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
Wesley W. Posvar David M. Taylor
Marjorie P. Smuts Treasurer
Charles H. Field
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 fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
-----------------------------------
-----------------------------------
GOVERNMENT
-----------------------------------
CASH
-----------------------------------
TRUST
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SEMI-ANNUAL REPORT
TO SHAREHOLDERS
NOVEMBER 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 147551204
0122604 (1/96)
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PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Municipal
Cash Series, which covers the six-month period ended November 30, 1995. The
report begins with an investment review by the fund's portfolio manager, which
is followed by a complete listing of the fund's investments and its financial
statements.
During the reporting period, Municipal Cash Series helped its shareholders earn
a total of $0.02 in tax-free dividends per share on their ready cash. In
addition to tax-free income, the fund also offers the important advantages of
daily liquidity and stability of principal.* By the end of the reporting period,
shareholders had invested a total of $482.7 million in the fund's diversified
portfolio of tax-free securities issued by municipalities nationwide.
Thank you for choosing Municipal Cash Series as a convenient way to put your
cash to work pursuing tax-free income. Please contact your investment
representative if you have any questions about the fund.
Sincerely,
LOGO
Richard B. Fisher
President
January 15, 1996
* Income may be subject to the federal alternative minimum tax and state and
local taxes. 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Municipal Cash Series invests in high quality, short-term tax-exempt debt
securities and seeks to maintain a constant net asset value of $1.00 per share.
For the six-month reporting period ended November 30, 1995, the fund paid
shareholders a total return of 1.56%.* This is equivalent to a taxable money
market fund return of 2.58% for an investor in the highest federal tax bracket
of 39.6%. The seven-day net yield for the six-month period ended November 30,
1995, was 3.12%.*
During the reporting period, there was a change in the course of monetary policy
by the Federal Reserve Board ("the Fed"). On July 6, 1995, the Fed lowered the
federal funds target rate, a practice known as "easing," by 25 basis points from
6.00% to 5.75%. This easing came on the heels of seven consecutive tightenings
from February, 1994 to February, 1995, which brought the fed funds target rate
from 3.00% to 6.00%. In easing, the Fed cited receding inflationary pressures as
the reason for the cut, although weak economic growth in the first and second
quarters was also thought to have an influence. The Fed then held monetary
policy steady until shortly after the end of the reporting period at its Open
Market Committee Meeting. At the December 19, 1995, meeting, the Fed voted to
ease monetary policy slightly by reducing the federal funds target rate an
additional 25 basis points to 5.50%. The Fed again cited a better-than-expected
outlook for inflation as the driving force behind the move.
As a result of both anticipation that the Fed would lower interest rates and a
gradually eroding economic outlook, money market rates declined from May, 1995
through the end of November, 1995. Municipal money market rates were also
affected by seasonal supply and demand imbalances throughout the reporting
period. The yield on one-year Treasury bills declined from 5.92% in May, 1995 to
a period low of 5.40% in November, 1995. Short-term municipal note rates
declined as well, but to a lesser degree. Yield levels on the Bond Buyer Index,
a proxy for one-year municipal notes offered in the marketplace, declined from
3.85% in May, 1995 to 3.60% in November, 1995.**
Over the reporting period, the market was also influenced by the ongoing budget
negotiations in Washington, D.C. The Treasury auction schedule was disrupted in
late October and early November as the debt ceiling was temporarily reached.
Currently, the federal government is experiencing its second partial shutdown
since the negotiations began, as Congress and the White House appear to have
reached an impasse. Nevertheless, expectations of a positive outcome toward
credible deficit reduction resulting from the talks have been priced into the
market.
In this interest rate environment, the fund has been managed with a 50- to
55-day average maturity target range, a moderately bullish stance in
anticipation of further eases by the Fed. Looking ahead to the first half of
1996, it seems likely that the Fed will seek additional cuts in the federal
funds target rate if the economic data remain soft and inflation is restrained.
However, changing economic and market developments are continuously monitored to
best serve our clients attracted to the short-term municipal market.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
** The Bond Buyer Index measures municipal bond yields.
MUNICIPAL CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--101.2%
- ------------------------------------------------------------------------
ALABAMA--2.5%
--------------------------------------------------------
$ 485,000 Hoover, AL IDA Weekly VRDNs (Bud's Best Cookies, Inc.)/
(SouthTrust Bank of Alabama, Birmingham LOC) P-1 $ 485,000
--------------------------------------------------------
4,600,000 Mobile, AL IDB, (1994 Series A), 4.05% TOBs
(International Paper Co.), Mandatory Tender 12/1/1995 A-2 4,600,000
--------------------------------------------------------
5,725,000 Mobile, AL IDB, IDRB (Series 1989) Weekly VRDNs (Newark
Group Industries, Inc.)/(First Fidelity Bank, NA, New
Jersey LOC) VMIG1 5,725,000
--------------------------------------------------------
345,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 345,000
--------------------------------------------------------
370,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 370,000
--------------------------------------------------------
325,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 325,000
--------------------------------------------------------
395,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 395,000
-------------------------------------------------------- ------------
Total 12,245,000
-------------------------------------------------------- ------------
ARKANSAS--4.7%
--------------------------------------------------------
3,000,000 Hope, AR , Solid Waste Disposal Revenue Bonds (Series
1994), 3.90% CP (Temple-Inland Forest Products
Corporation Project)/(Temple-Inland, Inc. GTD),
Mandatory Tender 2/27/1996 P-1 3,000,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
ARKANSAS--CONTINUED
--------------------------------------------------------
$ 3,000,000 Hope, AR , Solid Waste Disposal Revenue Bonds (Series
1994), 4.05% CP (Temple-Inland Forest Products
Corporation Project)/(Temple-Inland, Inc. GTD),
Mandatory Tender 12/14/1995 P-1 $ 3,000,000
--------------------------------------------------------
1,000,000 Sheridan, AR IDA, (Series B) Weekly VRDNs (H.H.
Robertson Co.)/(PNC Bank, N.A. LOC) P-1 1,000,000
--------------------------------------------------------
7,500,000 Siloam Springs, AR, IDRB (Series 1994) Weekly VRDNs
(La-Z Boy Chair Co.)/(NBD Bank, N.A., Detroit, MI LOC) P-1 7,500,000
--------------------------------------------------------
8,000,000 Springdale, AR, IDA Weekly VRDNs (Newlywed Food)/
(Mellon Bank NA, Pittsburgh LOC) VMIG1 8,000,000
-------------------------------------------------------- ------------
Total 22,500,000
-------------------------------------------------------- ------------
CALIFORNIA--2.5%
--------------------------------------------------------
5,000,000 California HFA, Home Mortgage Revenue Bonds (1995 Series
E), 4.60% TOBs (FGIC INS), Mandatory Tender 2/1/1996 A-1+ 5,000,000
--------------------------------------------------------
2,520,000 Los Angeles County, CA Housing Authority, Single Family
Mortgage Revenues, 4.50% TOBs (GNMA COL)/(Meridian Bank,
Reading, PA LIQ), Optional Tender 6/1/1996 NR(1) 2,520,000
--------------------------------------------------------
4,500,000 Pomona, CA, 4.70% TRANs, 6/28/1996 SP-1+ 4,509,897
-------------------------------------------------------- ------------
Total 12,029,897
-------------------------------------------------------- ------------
COLORADO--1.0%
--------------------------------------------------------
4,750,000 Adams County, CO IDB, (Series 1993) Weekly VRDNs (Bace
Manufacturing, Inc.)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 4,750,000
-------------------------------------------------------- ------------
DELAWARE--1.5%
--------------------------------------------------------
7,400,000 Sussex County, DE IDA Weekly VRDNs (Perdue Farms)/
(Rabobank Nederland, Utrecht LOC) P-1 7,400,000
-------------------------------------------------------- ------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
FLORIDA--0.1%
--------------------------------------------------------
$ 400,000 Hillsborough County, FL IDA, (Series 1992) Weekly VRDNs
(SIFCO Turbine Component Service)/(National City Bank,
Cleveland, OH LOC) P-1 $ 400,000
--------------------------------------------------------
100,000 Jacksonville, FL Weekly VRDNs (Metal Sales)/(National
City Bank, Kentucky LOC) P-1 100,000
-------------------------------------------------------- ------------
Total 500,000
-------------------------------------------------------- ------------
GEORGIA--6.6%
--------------------------------------------------------
500,000 Columbus, GA IDA Industrial & Port Development
Commission, (Series 1992) Weekly VRDNs (Maine Street
Village Partnership)/(Columbus Bank and Trust Co., GA
LOC) A-1 500,000
--------------------------------------------------------
8,240,000 Franklin County, GA Industrial Building Authority,
(Series 1995) Weekly VRDNs (Bosal Industries, Inc.)/(ABN
AMRO Bank N.V., Amsterdam LOC) A-1+ 8,240,000
--------------------------------------------------------
7,550,000 Georgia State HFA, (Series 1990C), 4.05% TOBs (First
National Bank of Chicago LIQ), Optional Tender 12/1/1995 NR(2) 7,550,000
--------------------------------------------------------
3,800,000 Gwinnett County, GA IDA Daily VRDNs (Volvo)/(Union Bank
of Switzerland, Zurich LOC) P-1 3,800,000
--------------------------------------------------------
4,000,000 Richmond County, GA Development Authority, Solid Waste
Disposal Revenue Bonds, (Series 1995) Weekly VRDNs
(Federal Paper Board Co., Inc.)/(Wachovia Bank of
Georgia NA, Atlanta LOC) A-1+ 4,000,000
--------------------------------------------------------
8,000,000 Savannah, GA EDA, (Series 1995A) Weekly VRDNs (Home
Depot, Inc.) A-1 8,000,000
-------------------------------------------------------- ------------
Total 32,090,000
-------------------------------------------------------- ------------
IDAHO--0.3%
--------------------------------------------------------
1,340,000 Idaho Housing Agency, (Series 1988C), 4.25% TOBs,
(Meridian Bank, Reading, PA) Optional Tender 1/1/1996 NR(2) 1,340,000
-------------------------------------------------------- ------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
ILLINOIS--1.8%
--------------------------------------------------------
$ 3,700,000 Chicago, IL, Gas Supply Revenue Bonds (1993 Series B),
3.85% TOBs (Peoples Gas Light & Coke Company), Optional
Tender 12/1/1996 VMIG1 $ 3,700,000
--------------------------------------------------------
3,700,000 Chicago, IL, Gas Supply Revenue Bonds (1993 Series B),
4.95% TOBs (Peoples Gas Light & Coke Company), Optional
Tender 12/1/1995 VMIG1 3,700,000
--------------------------------------------------------
1,200,000 Illinois Development Finance Authority Weekly VRDNs
(Technisand, Inc.)/(National City Bank, Cleveland, OH
LOC) P-1 1,200,000
-------------------------------------------------------- ------------
Total 8,600,000
-------------------------------------------------------- ------------
INDIANA--6.1%
--------------------------------------------------------
1,595,000 Avilla, IN, IDR Weekly VRDNs (Group Dekko
International)/(Bank One, Indianapolis, IN LOC) P-1 1,595,000
--------------------------------------------------------
2,275,000 Crown Point, IN, IDA Weekly VRDNs (D & M
Manufacturing)/(National City Bank, Kentucky LOC) P-1 2,275,000
--------------------------------------------------------
2,600,000 Franklin, IN, Adjustable Rate Economic Development
Revenue Refunding Bonds (Series 1994) Weekly VRDNs
(Pedcor Investments L.P.)/(Federal Home Loan Bank of
Indianapolis LOC) VMIG1 2,600,000
--------------------------------------------------------
2,735,000 Huntingburg, IN, (Series 1994) Weekly VRDNs (DMI
Furniture, Inc.)/(Bank One, Indianapolis, IN LOC) P-1 2,735,000
--------------------------------------------------------
2,850,000 Huntingburg, IN, Adjustable Rate EDRB (Series 1993)
Weekly VRDNs (DMI Furniture, Inc.)/(Bank One,
Indianapolis, IN LOC) P-1 2,850,000
--------------------------------------------------------
700,000 Indiana Economic Development Commission, (Series 1989)
Weekly VRDNs (O'Neal Steel, Inc.)/(SouthTrust Bank of
Alabama, Birmingham LOC) P-1 700,000
--------------------------------------------------------
4,885,000 Indiana State HFA, Single Family Mortgage Revenue Bonds
(Series 1995 D-2), 3.95% TOBs (FGIC GIC), Mandatory
Tender 11/1/1996 VMIG1 4,885,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
INDIANA--CONTINUED
--------------------------------------------------------
$ 2,915,000 Indianapolis, IN, (Series 1991) Weekly VRDNs (Cantor &
Coleman II Project)/(Bank One, Indianapolis, IN LOC) P-1 $ 2,915,000
--------------------------------------------------------
2,145,000 Lebanon, IN IDA, (Series 1991) Weekly VRDNs (White
Castle System)/(Bank One, Columbus, N.A. LOC) A-1+ 2,145,000
--------------------------------------------------------
3,000,000 Tippecanoe County, IN Economic Development Revenue
Weekly VRDNs (Lafayette Venetian Blind)/(PNC Bank, Ohio,
N.A. LOC) P-1 3,000,000
--------------------------------------------------------
3,780,000 Westfield, IN, IDR, (Series 1994) Weekly VRDNs (Standard
Locknut & Lockwasher, Inc.)/(Bank One, Indianapolis, IN
LOC) P-1 3,780,000
-------------------------------------------------------- ------------
Total 29,480,000
-------------------------------------------------------- ------------
IOWA--0.5%
--------------------------------------------------------
2,330,000 Iowa Finance Authority, Variable Rate Demand IDRB Weekly
VRDNs (V-T Industries, Inc. Project)/(Norwest Bank
Minnesota, Minneapolis LOC) P-1 2,330,000
-------------------------------------------------------- ------------
KENTUCKY--7.7%
--------------------------------------------------------
1,180,000 Caldwell County, KY, (Series 1990) Weekly VRDNs
(Thompson Steel Pipe)/(Corestates Bank N.A.,
Philadelphia, PA LOC) A-1+ 1,180,000
--------------------------------------------------------
3,945,000 Glasgow, KY, (Series 1994) Weekly VRDNs (Ply Tech
Corp.)/(Liberty National Bank & Trust Co. LOC) P-1 3,945,000
--------------------------------------------------------
1,800,000 Jefferson County, KY Weekly VRDNs (Gateway Press, Inc.)/
(PNC Bank, Kentucky LOC) P-1 1,800,000
--------------------------------------------------------
2,040,000 Jefferson County, KY, IDR (Series 1991) Weekly VRDNs
(Findley Adhesives)/(Bank One, Columbus, N.A. LOC) P-1 2,040,000
--------------------------------------------------------
2,000,000 Jefferson County, KY, IDR Weekly VRDNs (O'Neal Steel,
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 2,000,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
KENTUCKY--CONTINUED
--------------------------------------------------------
$18,000,000 Kentucky Pollution Abatement & Water Resource Finance
Authority Daily VRDNs (Toyota Motor Credit Corp.) A-1+ $ 18,000,000
--------------------------------------------------------
2,000,000 Kentucky Rural EDA, (Series 1990) Weekly VRDNs (Thompson
Steel Pipe)/(NBD Bank, N.A., Detroit, MI LOC) A-1+ 2,000,000
--------------------------------------------------------
6,000,000 Scottsville, KY, 4.15% TOBs (Sumitomo Electric Wiring
Systems)/(Sumitomo Bank Ltd., Osaka LOC), Optional
Tender 5/1/1996 A-1 6,000,000
-------------------------------------------------------- ------------
Total 36,965,000
-------------------------------------------------------- ------------
MARYLAND--4.0%
--------------------------------------------------------
2,860,000 Anne Arundel County, MD, EDRB (Series 1988), 3.85% CP
(Baltimore Gas & Electric Co.), Mandatory Tender
2/12/1996 A-1 2,860,000
--------------------------------------------------------
1,645,000 Baltimore, MD, (Series 1988) Weekly VRDNs (Cherill
Associated Facility)/(Nationsbank of Maryland, N.A. LOC) P-1 1,645,000
--------------------------------------------------------
2,800,000 Maryland State Community Development Administration,
(Series 1990B) Weekly VRDNs (Cherry Hill Apartment
Ltd.)/(Nationsbank of Maryland, N.A. LOC) P-1 2,800,000
--------------------------------------------------------
3,000,000 Maryland State Energy Financing Administration, IDRB
(Series 1988) Weekly VRDNs (Morningstar Foods, Inc.)/
(Nationsbank of Texas, N.A. LOC) P-1 3,000,000
--------------------------------------------------------
5,000,000 Montgomery County, MD Housing Opportunities Commission,
Multifamily Housing Revenue Bonds (1995 Series B), 3.90%
BANs, 11/14/1996 MIG1 5,000,000
--------------------------------------------------------
4,000,000 Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs
(Field Container Co. L.P.)/(Northern Trust Co., Chicago,
IL LOC) A-1+ 4,000,000
-------------------------------------------------------- ------------
Total 19,305,000
-------------------------------------------------------- ------------
MASSACHUSETTS--3.0%
--------------------------------------------------------
4,000,000 Attleboro, MA, (Lot A), 4.10% BANs, 12/14/1995 NR(4) 4,000,140
--------------------------------------------------------
6,475,000 Attleboro, MA, 4.10% BANs, 12/14/1995 NR(4) 6,475,210
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
--------------------------------------------------------
$ 3,900,000 Springfield, MA, 4.50% BANs (Fleet National Bank,
Providence, R.I. LOC), 2/9/1996 P-1 $ 3,904,386
-------------------------------------------------------- ------------
Total 14,379,736
-------------------------------------------------------- ------------
MICHIGAN--3.9%
--------------------------------------------------------
600,000 Bedford Township, MI Economic Development Corp., EDRB
(Series 1985) Weekly VRDNs (Form-Tech Steel Inc.
Project)/(Society National Bank, Cleveland, OH LOC) P-1 600,000
--------------------------------------------------------
2,000,000 Michigan State Housing Development Authority, Series
1990 B CR-71, 3.90% TOBs, Optional Tender 12/1/1995 NR(2) 2,000,000
--------------------------------------------------------
6,215,000 Michigan State, Strategic Fund (Series 1991) Weekly
VRDNs (AGA Gas, Inc.)/(Svenska Handelsbanken, Inc. LOC) P-1 6,215,000
--------------------------------------------------------
2,000,000 Michigan State, Strategic Fund Variable Rate Demand
Limited Obligation Revenue Bonds (Series 1994) Weekly
VRDNs (Tesco Engineering)/(Bank of Tokyo Ltd., Tokyo
LOC) VMIG1 2,000,000
--------------------------------------------------------
4,300,000 Michigan State, Strategic Fund Weekly VRDNs (Tesco
Engineering)/(Bank of Tokyo Ltd., Tokyo LOC) VMIG1 4,300,000
--------------------------------------------------------
470,000 Michigan Strategic Fund, (Series 1995) Weekly VRDNs
(Rood Industries, Inc. Project)/(NBD Bank, N.A.,
Detroit, MI LOC) A-1+ 470,000
--------------------------------------------------------
475,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (series 1995) Weekly VRDNs (RSR Project)/(Old Kent
Bank & Trust Co., Grand Rapids LOC) A-1 475,000
--------------------------------------------------------
500,000 Michigan Strategic Fund, Obligation Revenue Bonds
(Series 1995) Weekly VRDNs (Rowe Thomas Company
Project)/(Comerica Bank, Detroit, MI LOC) P-1 500,000
--------------------------------------------------------
2,500,000 Michigan Strategic Fund, Variable Rate Demand Limited
Obligation Revenue Bonds (Series 1995) Weekly VRDNs
(Bear Lake Associates Project)/(Old Kent Bank & Trust
Co., Grand Rapids LOC) P-1 2,500,000
-------------------------------------------------------- ------------
Total 19,060,000
-------------------------------------------------------- ------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
MINNESOTA--2.0%
--------------------------------------------------------
$ 5,715,000 Byron, MN IDB Weekly VRDNs (Schmidt Printing)/ (Norwest
Bank Minnesota, Minneapolis LOC) A-1+ $ 5,715,000
--------------------------------------------------------
700,000 Minnesota State Higher Education Coordinating Board,
(Series 1992A) Weekly VRDNs (First Bank NA, Minneapolis
LIQ) VMIG1 700,000
--------------------------------------------------------
895,000 Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) P-1 895,000
--------------------------------------------------------
2,420,000 St. Paul, MN Port Authority Weekly VRDNs (H.M. Smyth
Co., Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 2,420,000
-------------------------------------------------------- ------------
Total 9,730,000
-------------------------------------------------------- ------------
MISSISSIPPI--2.6%
--------------------------------------------------------
2,000,000 Mississippi Business Finance Corp. Weekly VRDNs (O'Neal
Steel, Inc.)/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 2,000,000
--------------------------------------------------------
5,000,000 Mississippi Business Finance Corp., (Series 1995) Weekly
VRDNs (Mississippi Baking Company L.L.C. Project)/(First
National Bank of Maryland, Baltimore LOC) P-1 5,000,000
--------------------------------------------------------
2,925,000 Mississippi Business Finance Corp., IDRB (Series 1994)
Weekly VRDNs (Flexsteel Industries, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) A-1+ 2,925,000
--------------------------------------------------------
2,700,000 Olive Branch, MS, (Series 1986) Weekly VRDNs (First
Union National Bank, Charlotte, N.C.)/(First Union
National Bank, Charlotte, N.C. LOC) VMIG1 2,700,000
-------------------------------------------------------- ------------
Total 12,625,000
-------------------------------------------------------- ------------
MISSOURI--1.0%
--------------------------------------------------------
1,050,000 Missouri Export & Infrastructure Board Weekly VRDNs
(Ex-L-Tube, Inc.)/(Norwest Bank Minnesota, Minneapolis
LOC) P-1 1,050,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
MISSOURI--CONTINUED
--------------------------------------------------------
$ 4,000,000 Missouri State Housing Development Community Meeting,
Single Family Mortgage Revenue Bonds (Series 1995 D),
4.20% TOBs (FGIC GIC), Mandatory Tender 11/1/1996 A-1+ $ 4,000,000
-------------------------------------------------------- ------------
Total 5,050,000
-------------------------------------------------------- ------------
MONTANA--1.0%
--------------------------------------------------------
4,970,000 Montana State Board of Housing, Single Family Mortgage
(Series 1990-C), 4.375% TOBs (FHA INS)/(Meridian Bank,
Reading, PA LIQ), Optional Tender 12/1/1995 NR(1) 4,970,000
-------------------------------------------------------- ------------
NEBRASKA--1.2%
--------------------------------------------------------
5,600,000 Douglas County, NE, (Series 1991) Weekly VRDNs (Malhove,
Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 5,600,000
-------------------------------------------------------- ------------
NEVADA--3.7%
--------------------------------------------------------
8,000,000 Clark County, NV, Industrial Development Refunding
Revenue Bonds (Series 1995B) Weekly VRDNs (Nevada Power
Co.)/(Societe Generale, Paris LOC) A-1+ 8,000,000
--------------------------------------------------------
10,000,000 Clark County, NV, Industrial Development Revenue Bonds
(Series 1995A) Weekly VRDNs (Nevada Power Co.)/(Barclays
Bank PLC, London LOC) A-1+ 10,000,000
-------------------------------------------------------- ------------
Total 18,000,000
-------------------------------------------------------- ------------
NEW HAMPSHIRE--5.8%
--------------------------------------------------------
8,000,000 New Hampshire Business Finance Authority, PCR Bonds
(Series A), 4.00% CP (New England Power Co.), Mandatory
Tender 1/11/1996 P-1 8,000,000
--------------------------------------------------------
7,000,000 New Hampshire Business Finance Authority, PCR Bonds
(Series A), 4.00% CP (New England Power Co.), Mandatory
Tender 2/13/1996 A-1 7,000,000
--------------------------------------------------------
6,750,000 New Hampshire Business Finance Authority, PCR Bonds
(Series A), 4.05% CP (New England Power Co.), Mandatory
Tender 1/26/1996 A-1 6,750,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
NEW HAMPSHIRE--CONTINUED
--------------------------------------------------------
$ 4,010,000 New Hampshire State IDA, (Series 1991), 4.05% TOBs
(International Paper Co.), Optional Tender 10/15/1996 P-2 $ 4,005,990
--------------------------------------------------------
2,000,000 Portsmouth, N.H., 4.48% TANs, 12/29/1995 NR(3) 2,000,344
-------------------------------------------------------- ------------
Total 27,756,334
-------------------------------------------------------- ------------
NEW JERSEY--0.4%
--------------------------------------------------------
2,000,000 New Jersey Housing & Mortgage Financing Authority,
(Series 1989-D), 4.00% TOBs (MBIA Insurance Corporation
INS)/(Citibank NA, New York LIQ), Optional Tender
4/1/1996 NR(1) 2,000,000
-------------------------------------------------------- ------------
NEW MEXICO--1.6%
--------------------------------------------------------
4,400,000 (a) New Mexico Educational Assistance Foundation, Student
Loan Revenue Bonds (Series 1992-B) PT-67 Weekly VRDNs
(AMBAC INS)/(Credit Suisse, Zurich LIQ) VMIG1 4,400,000
--------------------------------------------------------
3,300,000 Santa Fe, NM, Single Family Mortgage Revenue Bonds
(Series 1995B), 4.00% TOBs (FGIC GIC), Mandatory Tender
11/15/1996 VMIG1 3,300,000
-------------------------------------------------------- ------------
Total 7,700,000
-------------------------------------------------------- ------------
NEW YORK--6.1%
--------------------------------------------------------
7,000,000 Brentwood Union Free School District, NY, 4.375% TANs,
6/28/1996 NR(4) 7,010,582
--------------------------------------------------------
4,000,000 Longwood Central School District, NY, 4.50% TANs,
6/26/1996 NR(3) 4,009,833
--------------------------------------------------------
12,000,000 New York City Housing Development Corp., Multi-Family
Mortgage Revenue Bonds (1995 Series A-1) Weekly VRDNs
(400 West 59th Street Development)/(Bayerische
Hypotheken-Und Wechsel-Bank Ag LOC) A-1 12,000,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
NEW YORK--CONTINUED
--------------------------------------------------------
$ 6,300,000 Niagara County, NY IDA, Solid Waste Disposal Facility
Revenue Bonds (Series 1994B), 4.00% CP (American Ref-
Fuel Company)/(Air Products & Chemicals, Inc. and
Browning-Ferris Industries, Inc. GTDs), Mandatory Tender
12/8/1995 A-1 $ 6,300,000
-------------------------------------------------------- ------------
Total 29,320,415
-------------------------------------------------------- ------------
NORTH CAROLINA--2.9%
--------------------------------------------------------
1,825,000 Guilford County, NC Industrial Facilities & PCFA,
(Series 1989) Weekly VRDNs (Culp, Inc.)/(Wachovia Bank
of NC, NA, Winston-Salem LOC) P-1 1,825,000
--------------------------------------------------------
3,500,000 New Hanover County, NC PCFA Weekly VRDNs (Efson,
Inc.)/(Branch Banking & Trust Co, Wilson LOC) P-1 3,500,000
--------------------------------------------------------
1,040,000 Orange County, NC Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Mebane
Packaging Corp)/(First Union National Bank, Charlotte,
N.C. LOC) A-1+ 1,040,000
--------------------------------------------------------
2,400,000 Rutherford County, NC, Industrial Facilities Pollution
Control Financing Authority Weekly VRDNs (Spring-Ford
Knitting Co.)/(Branch Banking & Trust Co, Wilson LOC) P-1 2,400,000
--------------------------------------------------------
5,100,000 Wilson County, NC PCA, (Series 1994) Weekly VRDNs
(Granutec, Inc.)/(Branch Banking & Trust Co, Wilson LOC) P-1 5,100,000
-------------------------------------------------------- ------------
Total 13,865,000
-------------------------------------------------------- ------------
OHIO--0.1%
--------------------------------------------------------
400,000 Defiance County, OH, IDR Weekly VRDNs (Dietrich
Industries, Inc.)/(PNC Bank, N.A. LOC) A-1 400,000
-------------------------------------------------------- ------------
OKLAHOMA--3.9%
--------------------------------------------------------
2,300,000 Adair County, OK IDA, (Series B) Weekly VRDNs (Baldor
Electric Co.)/(Wachovia Bank of NC, NA, Winston-Salem
LOC) P-1 2,300,000
--------------------------------------------------------
3,000,000 Broken Arrow, OK EDA Weekly VRDNs (Blue Bell
Creameries)/(Banque Nationale de Paris LOC) VMIG1 3,000,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
OKLAHOMA--CONTINUED
--------------------------------------------------------
$ 5,500,000 Oklahoma Development Finance Authority, 4.00% TOBs
(Simmons Poultry Farms)/(Rabobank Nederland, Utrecht
LOC), Mandatory Tender 2/1/1996 P-1 $ 5,500,000
--------------------------------------------------------
8,000,000 Southeastern Oklahoma Industries Authority Weekly VRDNs
(Weyerhaeuser Co.) A-1 8,000,000
-------------------------------------------------------- ------------
Total 18,800,000
-------------------------------------------------------- ------------
PENNSYLVANIA--7.5%
--------------------------------------------------------
3,000,000 Carbon County, PA IDA, Resource Recovery Revenue Bonds,
(Series B), 3.90% CP (Panther Creek)/(National
Westminster Bank, PLC, London LOC), Mandatory Tender
1/24/1996 A-1+ 3,000,000
--------------------------------------------------------
2,375,000 Pennsylvania Education Development Authority Weekly
VRDNs (Stone and Lime Co.)/(PNC Bank, N.A. LOC) P-1 2,375,000
--------------------------------------------------------
700,000 Pennsylvania Education Development Authority Weekly
VRDNs (Tamaqua Cable Company)/(PNC Bank, N.A. LOC) P-1 700,000
--------------------------------------------------------
1,000,000 Pennsylvania Education Development Authority, (1995
Series D2) Weekly VRDNs (ARCO Enterprises, Inc./ Ronald
L. Repasky, Sr. Project)/(PNC Bank, N.A. LOC) A-1 1,000,000
--------------------------------------------------------
1,500,000 Pennsylvania Education Development Authority, (1995
Series D9) Weekly VRDNs (North American Communications,
Inc. Project)/(PNC Bank, N.A. LOC) A-1 1,500,000
--------------------------------------------------------
5,500,000 Philadelphia, PA IDA, 4.25% TOBs (Suite Hotel)/(First
National Bank of Boston, MA LOC), Optional Tender
6/1/1996 P-1 5,500,000
--------------------------------------------------------
5,500,000 Philadelphia, PA IDA, Commercial Development Revenue
Bonds (Series A), 4.00% TOBs (Economy Inn)/(First
National Bank of Boston, MA LOC), Optional Tender
7/1/1996 P-1 5,500,000
--------------------------------------------------------
5,850,000 Venango, PA IDA, (Series A), 3.90% CP (Scrubgrass Power
Corp.)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 12/13/1995 A-1+ 5,850,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$10,700,000 Washington County, PA IDA, Solid Waste Disposal Revenue
Bonds (Series 1995) Weekly VRDNs (American Iron Oxide
Company Project)/(Bank of Tokyo Ltd., Tokyo LOC) P-1 $ 10,700,000
-------------------------------------------------------- ------------
Total 36,125,000
-------------------------------------------------------- ------------
RHODE ISLAND--1.8%
--------------------------------------------------------
5,750,000 Rhode Island Housing & Mortgage Finance Corp,
Homeownership Opportunity Bonds (Series 17-C), 4.40%
TOBs (Bayerische Landesbank Girozentrale LOC), Mandatory
Tender 2/1/1996 A-1+ 5,750,000
--------------------------------------------------------
3,100,000 Rhode Island Public Transit Authority, (Series 1995),
4.375% RANs, 7/8/1996 MIG-2 3,103,143
-------------------------------------------------------- ------------
Total 8,853,143
-------------------------------------------------------- ------------
SOUTH CAROLINA--0.6%
--------------------------------------------------------
2,885,000 South Carolina Job Development Authority, EDRB (Series
1994) Weekly VRDNs (Carolina Cotton Works, Inc.
Project)/(Branch Banking & Trust Co, Wilson LOC) A-1 2,885,000
-------------------------------------------------------- ------------
SOUTH DAKOTA--1.2%
--------------------------------------------------------
6,000,000 South Dakota Housing Development Authority,
Homeownership Mortgage Bonds (Series 1995E), 4.05% TOBs,
Mandatory Tender 10/24/1996 A-1+ 6,000,000
-------------------------------------------------------- ------------
TENNESSEE--1.1%
--------------------------------------------------------
2,310,000 Cocke County, TN IDB, (Series 1988) Weekly VRDNs (GLI,
Inc.)/(Sanwa Bank Ltd, Osaka LOC) P-1 2,310,000
--------------------------------------------------------
3,000,000 Jackson, TN IDB , Solid Waste Facility Bonds (Series
1995) Weekly VRDNs (Florida Steel Corp.)/(Nationsbank of
Florida, N.A. LOC) A-1 3,000,000
-------------------------------------------------------- ------------
Total 5,310,000
-------------------------------------------------------- ------------
TEXAS--1.9%
--------------------------------------------------------
4,400,000 Galveston, TX IDC Weekly VRDNs (Mitchell Interest
Projects)/(National Westminster Bank, PLC, London LOC) A-1+ 4,400,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
TEXAS--CONTINUED
--------------------------------------------------------
$ 5,000,000 San Antonio, TX, Special Facilities Airport Revenue
Bonds (Series 1995) Weekly VRDNs (Cessna Aircraft
Company Project)/(Nationsbank of Texas, N.A. LOC) A-1 $ 5,000,000
-------------------------------------------------------- ------------
Total 9,400,000
-------------------------------------------------------- ------------
UTAH--1.3%
--------------------------------------------------------
1,690,000 Utah State HFA, (Series A), 4.25% TOBs (Meridian Bank,
Reading, PA LIQ), Optional Tender 1/1/1996 NR(2) 1,690,000
--------------------------------------------------------
2,145,000 Utah State HFA, (Series C-2), 4.25% TOBs (Meridian Bank,
Reading, PA LIQ), Optional Tender 1/1/1996 NR(2) 2,145,000
--------------------------------------------------------
2,445,000 Utah State HFA, (Series C-3), 4.25% TOBs (Meridian Bank,
Reading, PA LIQ), Optional Tender 1/1/1996 NR(2) 2,445,000
-------------------------------------------------------- ------------
Total 6,280,000
-------------------------------------------------------- ------------
VIRGINIA--1.9%
--------------------------------------------------------
2,300,000 Alexandria, VA Redevelopment and Housing Authority
Weekly VRDNs (Crystal City Apartments)/(Safeco Insurance
Co. of America INS)/(Sumitomo Bank Ltd., Osaka LIQ) A-1 2,300,000
--------------------------------------------------------
1,600,000 Franklin County, VA IDA Weekly VRDNs (American
Graphics)/(Nationsbank of Virginia, N.A. LOC) P-1 1,600,000
--------------------------------------------------------
3,000,000 Halifax, VA IDA, MMMs, PCR, 3.95% CP (Virginia Electric
Power Co.), Mandatory Tender 1/18/1996 A-1 3,000,000
--------------------------------------------------------
2,170,000 Virginia Beach, VA IDA, (Series 1993) Weekly VRDNs
(Ocean Ranch Motel Corp.)/(Nationsbank of Virginia, N.A.
LOC) A-1 2,170,000
-------------------------------------------------------- ------------
Total 9,070,000
-------------------------------------------------------- ------------
WASHINGTON--1.9%
--------------------------------------------------------
3,500,000 Pierce County, WA Economic Development Corp., (Series
1995) Weekly VRDNs (Simpson-Tacoma Kraft Company
Project)/(Seattle-First Bank, Seattle LOC) P-1 3,500,000
--------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
WASHINGTON--CONTINUED
--------------------------------------------------------
$ 5,540,000 Washington State Housing Finance Commission, (1995
Series 1A-S), 4.10% TOBs (FGIC INS), Mandatory Tender
6/1/1996 A-1+ $ 5,540,000
-------------------------------------------------------- ------------
Total 9,040,000
-------------------------------------------------------- ------------
WISCONSIN--3.5%
--------------------------------------------------------
2,550,000 Marshfield, WI, IDR (Series 1993) Weekly VRDNs (Building
Systems, Inc.)/(Bank One, Milwaukee, WI N.A. LOC) P-1 2,550,000
--------------------------------------------------------
1,860,000 Plover, WI Weekly VRDNs (Sirco Manufacturing, Inc.)/
(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 1,860,000
--------------------------------------------------------
1,050,000 Shell Lake, WI Weekly VRDNs (Doboy Packaging)/(Union
Bank of Switzerland, Zurich LOC) P-1 1,050,000
--------------------------------------------------------
2,200,000 Waukesha, WI, Adjustable Rate IDRB (Series 1995) Weekly
VRDNs (Weldall Manufacturing Inc. Project)/(Bank One,
Milwaukee, WI N.A. LOC) P-1 2,200,000
--------------------------------------------------------
9,130,000 (a) Wisconsin Housing & Economic Development Authority,
(Series B), 4.55% TOBs (FSA INS)/(Meridian Bank,
Reading, PA LIQ), Optional Tender 3/1/1996 NR(1) 9,130,000
-------------------------------------------------------- ------------
Total 16,790,000
-------------------------------------------------------- ------------
TOTAL INVESTMENTS(AT AMORTIZED COST)(B) $488,544,525
-------------------------------------------------------- ------------
</TABLE>
(a) Denotes a restricted security which is subject to restrictions or resale
under Federal Securities laws. These securities have been determined to be
liquid under criteria established by the Board of Directors at the end of
the period, these securities amounted to $13,530,000 which represents 2.8%
of net assets.
(b) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 19. Current credit ratings are
unaudited.
Note: The categories of investments are shown as a percentage of net assets
($482,749,030) at November 30, 1995.
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
BANs -- Bond Anticipation Notes
COL -- Collateralized
CP -- Commercial Paper
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bonds
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GTD -- Guaranty
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDC -- Industrial Development Corporation
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bond
INS -- Insured
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
MMMs -- Money Market Municipals
PCA -- Pollution Control Authority
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
RANs -- Revenue Anticipation Notes
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
STANDARD & POOR'S RATINGS GROUP
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus sign (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
VARIABLE RATE DEMAND NOTES (VRDNS) AND TENDER OPTION BONDS (TOBS) RATINGS
Standard & Poor's Ratings Group ("S&P") assigns dual ratings to all long-term
debt issues that have as part of their provisions a variable rate demand
feature. The first rating (long-term rating) addresses the likelihood of
repayment of principal and interest when due, and the second rating (short-term
rating) describes the demand characteristics. Several examples are AAA/A-1+,
AA/A-1+, A/A-1. (The definitions for the long-term and the short-term ratings
are provided below.)
COMMERCIAL PAPER (CP) RATINGS
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
LONG-TERM DEBT RATINGS
AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rate "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG)
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS) AND TENDER OPTION BONDS (TOBS) RATINGS
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG rating can be
assigned a 1 or 2 designation using the same definitions described above for the
MIG rating.
COMMERCIAL PAPER (CP) RATINGS
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
PRIME-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection,
broad margins in earning coverage of fixed financial charges and high
internal cash generation, well-established access to a range of financial
markets and assured sources of alternate liquidity
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to
a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
LONG-TERM DEBT RATINGS
AAA Bonds which are rated AAA are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes is can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
AA Bonds which are rated AA are judged to be of high quality by all
standards. Together with the AAA group, they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in AAA securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in AAA securities.
A Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in
the future.
NR Indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to
securities rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" by Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
NR(4) The underlying issuer/obligor/guarantor has other outstanding debt rated
"BBB" by S&P or "Baa" by Moody's.
MUNICIPAL CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $488,544,525
- --------------------------------------------------------------------------------
Income receivable 3,588,934
- -------------------------------------------------------------------------------- ------------
Total assets 492,133,459
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $3,700,000
- -------------------------------------------------------------------
Income distribution payable 954,156
- -------------------------------------------------------------------
Payable to Bank 4,549,976
- -------------------------------------------------------------------
Accrued expenses 180,297
- ------------------------------------------------------------------- ----------
Total liabilities 9,384,429
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 482,749,030 shares outstanding $482,749,030
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
($482,749,030 / 482,749,030 shares outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest $9,705,180
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $1,183,084
- ----------------------------------------------------------------------
Administrative personnel and services fee 179,119
- ----------------------------------------------------------------------
Custodian fees 37,859
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 117,362
- ----------------------------------------------------------------------
Directors'/Trustees' fees 2,562
- ----------------------------------------------------------------------
Auditing fees 5,673
- ----------------------------------------------------------------------
Legal fees 5,490
- ----------------------------------------------------------------------
Portfolio accounting fees 44,957
- ----------------------------------------------------------------------
Distribution services fee 828,159
- ----------------------------------------------------------------------
Shareholder services fee 591,542
- ----------------------------------------------------------------------
Share registration costs 16,653
- ----------------------------------------------------------------------
Printing and postage 12,627
- ----------------------------------------------------------------------
Insurance premiums 5,673
- ----------------------------------------------------------------------
Taxes 30,012
- ----------------------------------------------------------------------
Miscellaneous 4,758
- ---------------------------------------------------------------------- ----------
Total expenses 3,065,530
- ----------------------------------------------------------------------
Waivers--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $(121,070)
- ----------------------------------------------------------
Waiver of distribution services fee (591,542)
- ---------------------------------------------------------- ---------
Total waivers (712,612)
- ---------------------------------------------------------------------- ----------
Net expenses 2,352,918
- ------------------------------------------------------------------------------------ ----------
Net investment income $7,352,262
- ------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
----------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------
OPERATIONS--
- ----------------------------------------------------
Net investment income $ 7,352,262 $ 14,471,528
- ---------------------------------------------------- ----------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------
Distributions from net investment income (7,352,262) (14,471,528)
- ---------------------------------------------------- ---------------- --------------
SHARE TRANSACTIONS--
- ----------------------------------------------------
Proceeds from sale of shares 1,039,017,453 2,187,590,706
- ----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 6,491,943 12,592,729
- ----------------------------------------------------
Cost of shares redeemed (1,007,924,166) (2,329,820,910)
- ---------------------------------------------------- ----------------- --------------
Change in net assets resulting from share
transactions 37,585,230 (129,637,475)
- ---------------------------------------------------- ----------------- --------------
Change in net assets 37,585,230 (129,637,475)
- ----------------------------------------------------
NET ASSETS:
- ----------------------------------------------------
Beginning of period 445,163,800 574,801,275
- ---------------------------------------------------- ----------------- --------------
End of period $ 482,749,030 $ 445,163,800
- ---------------------------------------------------- ----------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MAY 31,
NOVEMBER 30, ------------------------------------------------------------
1995 1995 1994 1993 1992 1991 1990(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 0.02 0.03 0.02 0.03 0.04 0.05 0.04
- -----------------------------
LESS DISTRIBUTIONS
- -----------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.03) (0.04) (0.05) (0.04)
- ----------------------------- ------- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------- ------- ----- ----- ----- ----- ----- -----
TOTAL RETURN(B) 1.56% 2.84% 1.83% 2.11% 3.53% 5.24% 4.68%
- -----------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------
Expenses 0.99%* 0.99% 0.99% 0.99% 0.98% 0.94% 0.73%*
- -----------------------------
Net investment income 3.10%* 2.76% 1.81% 2.10% 3.42% 5.02% 5.76%*
- -----------------------------
Expense waiver/
reimbursement(c) 0.30%* 0.05% 0.06% 0.03% 0.03% 0.17% 0.45%*
- -----------------------------
SUPPLEMENTAL DATA
- -----------------------------
Net assets, end of period
(000 omitted) $482,749 $445,164 $574,801 $456,205 $516,814 $403,151 $195,897
- -----------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 25, 1989 (date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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)
MUNICIPAL CASH SERIES
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940 (the "Act") as an open-end, management investment company.
The Corporation consists of three diversified portfolios and one non-diversified
portfolio (Municipal Cash Series). The financial statements included herein are
only those of Municipal Cash Series (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(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--The Fund uses the amortized cost method to value its
portfolio securities 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 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.
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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In some cases, the restricted securities may be resold without registration
upon exercise of a demand feature. Such restricted securities may be
determined to be liquid under criteria established by the Board of
Directors. The Fund will not incur any registration costs upon such
resales. Restricted
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
securities are valued at amortized cost in accordance with Rule 2a-7 under
the Investment Company Act of 1940.
Additional information on each restricted security held at November 30,
1995 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Mexico Educational Assistance Foundation, Student
Loan Revenue Bonds (Series 1992-B) PT-67 Weekly
VRDNs (AMBAC INS)/(Credit Suisse, Zurich LIQ) 11/30/95 $4,400,000
Wisconsin Housing & Economic Development Au-
thority, (Series B), 4.55% TOBs (FSA INS)/(Me-
ridian Bank, Reading, PA LIQ), Optional Tender
3/1/1996 8/28/95 $9,130,000
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1995, there were 12,500,000,000 shares of $ 0.001 par value
capital stock authorized. Capital paid-in aggregated $482,749,030. Transactions
in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
- --------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Shares sold 1,039,017,453 2,187,590,706
- ---------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 6,491,943 12,592,729
- ---------------------------------------------------------
Shares redeemed (1,007,924,166) (2,329,820,910)
- --------------------------------------------------------- ---------------- --------------
Net change resulting from share transactions 37,585,230 (129,637,475)
- --------------------------------------------------------- ---------------- --------------
</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
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services, under the Administrative
Services Agreement, provides the Fund with administrative personnel and
services. This fee is based on the level of average aggregate daily net assets
of all funds advised by subsidiaries of Federated Investors for the
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
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.
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
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .35 of 1% of the average daily net assets, annually, to reimburse
FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify
or terminate this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), serves as transfer and dividend disbursing agent for the Fund. This
fee 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 November 30, 1995, 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 purchase and sale transactions
were made at current market value pursuant to Rule 17a-7 under the Act amounting
to $373,040,000 and $442,915,000, respectively.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
<TABLE>
<S> <C>
DIRECTORS OFFICERS
- -----------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and
Wesley W. Posvar Secretary
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
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 fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
-----------------------------------
-----------------------------------
MUNICIPAL
-----------------------------------
CASH
-----------------------------------
SERIES
-----------------------------------
-----------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
NOVEMBER 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 147551303
0122605 (1/96)
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Prime Cash
Series, which covers the six-month period ended November 30, 1995. The report
begins with an investment review by the fund's portfolio manager, which is
followed by a complete listing of the fund's investments and its financial
statements.
During the reporting period, Prime Cash Series helped its shareholders earn a
total of $0.03 in dividends per share on their ready cash, while offering the
advantages of daily liquidity and stability of principal.* During the reporting
period, more and more investors placed their confidence in the fund, which
helped its assets soar by more than $300 million to total $1.3 billion at the
reporting period's end.
At the end of the reporting period, fund assets stood at $1.3 billion, which was
invested in a diversified, high-quality portfolio of money market securities
that included commercial paper (55.2%), variable rate obligations (29.6%),
certificates of deposit (5.8%), repurchase agreements (4.2%), corporate notes
(3.3%), and bank notes (1.9%).
Thank you for choosing Prime Cash Series as a convenient way to put your cash to
work. Please contact your investment representative if you have any questions
about the fund.
Sincerely,
LOGO
Richard B. Fisher
President
January 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Short-term interest rates initially declined throughout June and into July of
1995, with the biggest drop of 25 basis points coming on July 6, 1995, following
a Federal Reserve Board (the "Fed") rate cut. At that time, the Fed cut the
federal funds target rate from 6% to 5.75%. Subsequently, expectations of
additional rate cuts waned, and short-term rates backed up 10-15 basis points
through the end of November, 1995. The Fed, in fine-tuning the interest rate
environment, seems to have successfully guided the economy through a "soft
landing."
During the six-month reporting period ended November 30, 1995, the net assets of
Prime Cash Series increased from $1 billion to $1.3 billion while the seven-day
net yield decreased from 5.28% at the beginning of the period to 4.87% on
November 30, 1995.* The effective average maturity of the fund on November 30,
1995, was 59 days.
During the reporting period, the fund's average maturity target range was
lengthened from 35-45 days to 40-50 days. This reflects our bias toward a
neutral to modestly easing Fed throughout the coming months. In addition, we
continue to invest the fund in a barbelled style with 25-30% of the investments
in variable rate demand notes, 10-15% in overnight securities and the remainder
of the portfolio laddered out to the six-month to twelve-month area of the yield
curve.
Our outlook is for a modestly easing to neutral Fed for the beginning of 1996.
The structure of a barbell should allow the fund to maintain the higher yields
of longer-dated securities. In addition, the longer average maturity should also
be beneficial in a declining rate environment.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
PRIME CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
BANK NOTES--1.9%
- --------------------------------------------------------------------------------
BANKING--1.9%
---------------------------------------------------------------
$ 5,000,000 Bank of New York, New York, 5.570%, 5/30/1996 $ 4,998,778
---------------------------------------------------------------
1,000,000 Comerica Bank, Detroit, MI, 5.650%, 9/23/1996 999,532
---------------------------------------------------------------
19,000,000 Mellon Bank NA, Pittsburgh, 5.750%-5.810%, 2/28/1996-10/16/1996 18,998,119
--------------------------------------------------------------- --------------
TOTAL BANK NOTES 24,996,429
--------------------------------------------------------------- --------------
CERTIFICATES OF DEPOSIT--5.8%
- ----------- --------------------------------------------------------------------
BANKING--5.8%
---------------------------------------------------------------
19,000,000 Banque Nationale de Paris, 5.620%-5.630%, 1/8/1996-1/12/1996 19,000,123
---------------------------------------------------------------
12,000,000 Bayerische Hypotheken-Und Wechsel-Bank Ag, 5.750%, 4/12/1996 12,001,094
---------------------------------------------------------------
8,000,000 Lloyds Bank PLC, London, 5.720%, 8/16/1996 8,012,155
---------------------------------------------------------------
15,000,000 MBNA America Bank, NA, 6.000%, 12/11/1995 15,000,000
---------------------------------------------------------------
12,000,000 Societe Generale, Paris, 5.800%, 1/22/1996 12,000,251
---------------------------------------------------------------
11,000,000 Swiss Bank Corp., Basle, 5.770%, 2/2/1996 11,000,000
--------------------------------------------------------------- --------------
TOTAL CERTIFICATES OF DEPOSIT 77,013,623
--------------------------------------------------------------- --------------
(A) COMMERCIAL PAPER--55.2%
- ----------- --------------------------------------------------------------------
BANKING--18.3%
---------------------------------------------------------------
15,000,000 ABN AMRO N.A., Finance, Inc., (Guaranteed by ABN AMRO Bank
N.V., Amsterdam), 5.640%-5.785%, 4/25/1996 14,662,983
---------------------------------------------------------------
20,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank
PLC, London), 5.790%-5.797%, 1/5/1996-1/16/1996 19,871,525
---------------------------------------------------------------
36,000,000 Barclays Bank of Canada, (Guaranteed by Barclays Bank PLC,
London), 5.767%-5.837%, 2/12/1996-3/1/1996 35,540,608
---------------------------------------------------------------
25,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce, Toronto), 5.783%-5.810%, 1/22/1996-
1/26/1996 24,786,506
---------------------------------------------------------------
28,000,000 Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank AG,
Frankfurt), 5.723%-5.781%, 1/12/1996-1/22/1996 27,790,506
---------------------------------------------------------------
20,000,000 Dresdner US Finance, 5.890%-5.975%, 12/7/1995-12/12/1995 19,972,744
---------------------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
(A) COMMERCIAL PAPER--CONTINUED
- --------------------------------------------------------------------------------
BANKING--CONTINUED
---------------------------------------------------------------
$17,000,000 National Australia Funding, Inc., (Guaranteed by National
Australia Bank, Ltd., Melbourne), 5.741%-5.771%,
12/1/1995-12/12/1995 $ 16,987,979
---------------------------------------------------------------
10,000,000 Republic New York Corp., 5.717%, 1/25/1996 9,915,208
---------------------------------------------------------------
10,000,000 Royal Bank of Canada, Montreal, 5.636%, 1/11/1996 9,937,589
---------------------------------------------------------------
55,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.605%-5.860%, 2/6/1996-5/29/1996 54,153,594
---------------------------------------------------------------
10,000,000 Toronto Dominion Holdings (USA), Inc., (Guaranteed by Toronto-
Dominion Bank), 5.777%, 1/8/1996 9,940,783
--------------------------------------------------------------- --------------
Total 243,560,025
--------------------------------------------------------------- --------------
FINANCE-AUTOMOTIVE--1.2%
---------------------------------------------------------------
16,000,000 General Motors Acceptance Corp., 5.611%-5.696%,
5/10/1996-5/24/1996 15,589,458
--------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--23.1%
---------------------------------------------------------------
38,000,000 Asset Securitization Cooperative Corp., 5.748%-5.837%,
1/8/1996-2/9/1996 37,669,725
---------------------------------------------------------------
62,045,000 Beta Finance, Inc., 5.675%-5.851%, 1/30/1996-3/15/1996 61,285,052
---------------------------------------------------------------
10,000,000 CIESCO, Inc., 5.715%-5.820%, 2/8/1996-2/9/1996 9,890,650
---------------------------------------------------------------
38,000,000 CIT Group Holdings, Inc., 5.760%-5.780%, 12/5/1995-2/2/1996 37,834,426
---------------------------------------------------------------
10,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.731%, 12/11/1995 9,984,306
---------------------------------------------------------------
33,500,000 Falcon Asset Securitization Corp., 5.742%-5.753%, 2/13/1996-
4/18/1996 32,975,932
---------------------------------------------------------------
43,000,000 General Electric Capital Corp., 5.634%-5.845%,
12/4/1995-4/26/1996 42,640,845
---------------------------------------------------------------
5,000,000 Greenwich Funding Corp., 5.749%, 2/15/1996 4,940,150
---------------------------------------------------------------
65,000,000 PREFCO-Preferred Receivables Funding Co., 5.730%-5.816%,
12/13/1995-2/26/1996 64,560,979
---------------------------------------------------------------
5,000,000 Sheffield Receivables Corp., 5.744%, 2/16/1996 4,939,469
--------------------------------------------------------------- --------------
Total 306,721,534
--------------------------------------------------------------- --------------
FINANCE-RETAIL--7.5%
---------------------------------------------------------------
40,000,000 American Express Credit Corp., 5.675%-5.779%, 3/4/1996-5/3/1996 39,251,825
---------------------------------------------------------------
10,000,000 Avco Financial Services, Inc., 5.828%, 1/18/1996 9,923,600
---------------------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
(A) COMMERCIAL PAPER--CONTINUED
- --------------------------------------------------------------------------------
FINANCE-RETAIL--CONTINUED
---------------------------------------------------------------
$34,000,000 Ford Credit Receivables Funding, Inc., 5.761%-5.791%,
12/4/1995-1/17/1996 $ 33,845,372
---------------------------------------------------------------
17,000,000 New Center Asset Trust, A1+/P1 Series, 5.752%-5.777%,
1/12/1996-2/28/1996 16,813,275
--------------------------------------------------------------- --------------
Total 99,834,072
--------------------------------------------------------------- --------------
INSURANCE--0.6%
---------------------------------------------------------------
3,000,000 Marsh & McLennan Cos., Inc., 5.944%, 12/1/1995 3,000,000
---------------------------------------------------------------
4,409,000 Prospect Street Senior Portfolio, L.P., (Guaranteed by
Financial Security Assurance, Inc.), 5.817%, 1/2/1996 4,386,504
--------------------------------------------------------------- --------------
Total 7,386,504
--------------------------------------------------------------- --------------
OIL & OIL FINANCE--1.5%
---------------------------------------------------------------
5,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.), 5.699%,
12/12/1995 4,991,414
---------------------------------------------------------------
10,000,000 Chevron U.K. Investment PLC, (Guaranteed by Chevron Corp.),
5.792%, 1/24/1996 9,914,350
---------------------------------------------------------------
5,000,000 Koch Industries, Inc., 5.901%, 12/1/1995 5,000,000
--------------------------------------------------------------- --------------
Total 19,905,764
--------------------------------------------------------------- --------------
PHARMACEUTICALS AND HEALTH CARE--0.7%
---------------------------------------------------------------
10,000,000 Sherwood Medical, American Home Subsidiary, (Guaranteed by
American Home Products Corp.), 5.746%, 12/18/1995 9,973,272
--------------------------------------------------------------- --------------
TELECOMMUNICATIONS--2.3%
---------------------------------------------------------------
10,000,000 AT&T Capital Corp., 5.775%, 2/5/1996 9,895,500
---------------------------------------------------------------
5,000,000 AT&T Corp., 5.598%, 5/10/1996 4,877,908
---------------------------------------------------------------
16,000,000 Ameritech Capital Funding Corp., (Guaranteed by Ameritech
Corp.), 5.781%-5.801%, 12/1/1995-1/22/1996 15,951,293
--------------------------------------------------------------- --------------
Total 30,724,701
--------------------------------------------------------------- --------------
TOTAL COMMERCIAL PAPER 733,695,330
--------------------------------------------------------------- --------------
CORPORATE NOTES--3.3%
- --------------------------------------------------------------------------------
BANKING--1.0%
---------------------------------------------------------------
1,259,010 Banc One Auto Trust 1995-A, 6.363%, 4/15/1996 1,259,010
--------------------------------------------------------------- --------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
CORPORATE NOTES--CONTINUED
- --------------------------------------------------------------------------------
FINANCE-EQUIPMENT--2.0%
---------------------------------------------------------------
$ 9,882,837 Case Equipment Loan Trust 1995-B Class A-1, 5.825%, 9/15/1996 $ 9,882,837
---------------------------------------------------------------
16,315,376 Navistar Financial 1995-A OWNER TRUST, 5.750%, 11/15/1996 16,315,124
--------------------------------------------------------------- --------------
Total 26,197,961
--------------------------------------------------------------- --------------
FOOD & BEVERAGE--1.2%
---------------------------------------------------------------
16,000,000 PepsiCo, Inc., 5.750%-5.830%, 8/27/1996-9/6/1996 16,000,580
--------------------------------------------------------------- --------------
TOTAL CORPORATE NOTES 43,457,551
--------------------------------------------------------------- --------------
(B) VARIABLE RATE OBLIGATIONS--29.6%
- --------------------------------------------------------------------------------
BANKING--23.1%
---------------------------------------------------------------
2,225,000 Alabama State IDA, NICHOLS RESEARCH CORP., (SouthTrust Bank of
Alabama, Birmingham LOC), 5.868%, 12/1/1995 2,225,000
---------------------------------------------------------------
4,885,000 Aurora, IL City of, SERIES 1995, (First of America
Bank--Illinois LOC), 6.160%, 11/30/1995 4,885,000
---------------------------------------------------------------
2,050,000 Athens-Clarke County, GA, IDA SERIES 1995 BARRETT PROJECT,
(Columbus Bank and Trust Co., GA LOC), 6.013%, 11/30/1995 2,050,000
---------------------------------------------------------------
1,175,000 Avalon Hotel Associates, (Meridian Bank, Reading, PA LOC),
5.944%, 11/30/1995 1,175,000
---------------------------------------------------------------
10,000,000 Azdel, Inc., (PNC Bank, Kentucky LOC), 5.826%, 12/4/1995 10,000,000
---------------------------------------------------------------
3,000,000 Boardwalk Villas Ltd., SERIES 1995, (SouthTrust Bank of
Alabama, Birmingham LOC), 5.863%, 11/30/1995 3,000,000
---------------------------------------------------------------
8,450,000 College-Kent L.P., (Society National Bank, Cleveland, OH LOC),
5.943%, 12/1/1995 8,450,000
---------------------------------------------------------------
13,655,000 Congregate Care Corp., (Union Bank LOC), 6.063%, 12/6/1995 13,655,000
---------------------------------------------------------------
6,300,000 Dewberry III, L.P., (First National Bank of Maryland, Baltimore
LOC), 6.010%, 11/30/1995 6,300,000
---------------------------------------------------------------
7,900,000 Euclid Superior Parking, (Society National Bank, Cleveland, OH
LOC), 5.943%, 12/1/1995 7,900,000
---------------------------------------------------------------
11,760,000 HJH Associates of Alabama, Hilton Hotel, Huntsville,
(SouthTrust Bank of Alabama, Birmingham LOC), 5.858%,
11/30/1995 11,760,000
---------------------------------------------------------------
10,315,000 I.D.B. City of Pelham, (Columbus Bank and Trust Co., GA LOC),
6.013%, 11/30/1995 10,315,000
---------------------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B) VARIABLE RATE OBLIGATIONS--CONTINUED
- --------------------------------------------------------------------------------
BANKING--CONTINUED
---------------------------------------------------------------
$ 3,895,000 I.D.B. Sylacuaga, AL, (SouthTrust Bank of Alabama, Birmingham
LOC), 5.868%, 12/5/1995 $ 3,895,000
---------------------------------------------------------------
10,035,000 KBL Capital Fund, SERIES 1995-A, (Old Kent Bank & Trust Co.,
Grand Rapids LOC), 5.850%, 11/30/1995 10,035,000
---------------------------------------------------------------
14,000,000 Kentucky Rural Economic Development Authority, (PNC Bank, N.A.
LOC), 5.926%, 12/4/1995 14,000,000
---------------------------------------------------------------
4,505,000 Maryland State IDFA, GENETIC THERAPY, INC., (First National
Bank of Maryland, Baltimore LOC), 5.880%, 12/4/1995 4,505,000
---------------------------------------------------------------
6,100,000 Maryland State IDFA, KELLY SPRINGFIELD TIRE, (First National
Bank of Maryland, Baltimore LOC), 5.980%, 12/4/1995 6,100,000
---------------------------------------------------------------
3,500,000 Maryland State IDFA, SERIES 1994 HUMAN GENOME, (First National
Bank of Maryland, Baltimore LOC), 5.880%, 12/4/1995 3,500,000
---------------------------------------------------------------
18,000,000 National Funding Corp., SERIES 1994-A, (American National Bank,
Chicago LOC), 5.790%, 11/30/1995 18,000,000
---------------------------------------------------------------
730,000 New Jersey EDA, Series 1992 K-3, (Banque Nationale de Paris
LOC), 6.174%, 12/4/1995 730,000
---------------------------------------------------------------
3,995,000 New Jersey EDA, Series 1992-H, (Banque Nationale de Paris LOC),
6.049%, 12/4/1995 3,995,000
---------------------------------------------------------------
37,000,000 PNC Bank, N.A., 5.725%, 11/30/1995 36,967,086
---------------------------------------------------------------
6,100,000 Pennsylvania EDFA, SERIES 1993-C, (Barclays Bank PLC, London
LOC), 5.863%, 12/6/1995 6,100,000
---------------------------------------------------------------
2,400,000 Pinehurst Villsa, LTD, SERIES 1995, (SouthTrust Bank of
Alabama, Birmingham LOC), 5.863%, 11/30/1995 2,400,000
---------------------------------------------------------------
10,000,000 (c)SMM Trust, SERIES 1995-L, 5.833%, 12/15/1995 9,998,400
---------------------------------------------------------------
10,000,000 (c)SMM Trust, Series 1995-B, 5.832%, 12/1/1995 10,000,000
---------------------------------------------------------------
30,000,000 (c)SMM Trust, Series 1995-I, 5.864%, 12/1/1995 29,995,705
---------------------------------------------------------------
16,000,000 (c)SMM Trust, Series 1995-N, 5.925%, 2/15/1996 16,000,000
---------------------------------------------------------------
2,500,000 Saegertown Manufacturing Corp., (PNC Bank, N.A. LOC), 5.826%,
12/4/1995 2,500,000
---------------------------------------------------------------
6,400,000 Southeast Regional Holdings, LLC Series 1995-A, (Columbus Bank
and Trust Co., GA LOC), 6.013%, 11/30/1995 6,400,000
---------------------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B) VARIABLE RATE OBLIGATIONS--CONTINUED
- --------------------------------------------------------------------------------
BANKING--CONTINUED
---------------------------------------------------------------
$ 3,720,000 (c)Toledo Medical Building I L.P., (Huntington National Bank,
Columbus, OH LOC), 6.380%, 5/1/1996 $ 3,720,000
---------------------------------------------------------------
19,725,000 Union Development Co., (Bank of America NT and SA, San
Francisco LOC), 5.858%, 11/30/1995 19,725,000
---------------------------------------------------------------
8,400,000 United Jewish Federation of Greater Pittsburgh VRDB, Series
1995A, (PNC Bank, N.A. LOC), 5.850%, 11/30/1995 8,400,000
---------------------------------------------------------------
6,850,000 Van Dyne Crotty Co., (Huntington National Bank, Columbus, OH
LOC), 5.810%, 11/30/1995 6,850,000
---------------------------------------------------------------
2,031,000 Vista Funding Corp., 1995-A, (Star Bank, NA, Cincinnati LOC),
5.938%, 11/30/1995 2,031,000
--------------------------------------------------------------- --------------
Total 307,562,191
--------------------------------------------------------------- --------------
FINANCE-AUTOMOTIVE--2.4%
---------------------------------------------------------------
8,500,000 Alabama State IDA, TAX REVENUE BONDS SERIES 1994 GMC PROJECT,
(General Motors Corp. LOC), 6.063%, 11/30/1995 8,500,000
---------------------------------------------------------------
23,000,000 Carco Auto Loan Master Trust 1993-2, SERIES 1993-2 Class A1,
5.905%, 12/15/1995 23,000,000
--------------------------------------------------------------- --------------
Total 31,500,000
--------------------------------------------------------------- --------------
FINANCE-RETAIL--1.5%
---------------------------------------------------------------
20,000,000 (c)AFS Insurance Premium Receivables Trust, SERIES 1994-A,
6.369%, 12/15/1995 20,000,000
--------------------------------------------------------------- --------------
INSURANCE--2.6%
---------------------------------------------------------------
12,500,000 Sun Life Insurance Co. of America, 5.978%, 12/1/1995 12,500,000
---------------------------------------------------------------
10,000,000 Sun Life Insurance Co. of America, 5.978%, 12/1/1995 10,000,000
---------------------------------------------------------------
12,500,000 (c)Sun Life Insurance Co. of America, 6.045%, 12/1/1995 12,500,000
--------------------------------------------------------------- --------------
Total 35,000,000
--------------------------------------------------------------- --------------
TOTAL VARIABLE RATE OBLIGATIONS 394,062,191
--------------------------------------------------------------- --------------
TIME DEPOSIT--1.0%
- --------------------------------------------------------------------------------
BANKING--1.0%
---------------------------------------------------------------
13,000,000 Bank of Nova Scotia, Toronto, 7.000%, 1/2/1996 13,000,000
--------------------------------------------------------------- --------------
TOTAL TIME DEPOSIT 13,000,000
--------------------------------------------------------------- --------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- --------------
<C> <C> <S> <C>
(D) REPURCHASE AGREEMENTS--4.2%
- --------------------------------------------------------------------------------
$20,000,000 Bear, Stearns and Co., Inc., 5.90%, dated 11/30/1995, due
12/1/1995 $ 20,000,000
---------------------------------------------------------------
1,500,000 Chemical Securities, Inc., 5.90%, dated 11/30/1995, due
12/1/1995 1,500,000
---------------------------------------------------------------
29,000,000 PaineWebber, Inc., 5.93%, dated 11/30/1995, due 12/1/1995 29,000,000
---------------------------------------------------------------
5,950,000 State Street Bank and Trust Co., 5.90%, dated 11/30/1995, due
12/1/1995 5,950,000
--------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 56,450,000
--------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $1,342,675,124
--------------------------------------------------------------- --------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to ($102,214,105) which represents 7.7% of net assets.
(d) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($1,329,361,892) at November 30, 1995.
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C> <C>
EDA -- Economic Development Authority
EDFA -- Economic Development Financing Authority
IDA -- Industrial Development Authority
IDFA -- Industrial Development Finance Authority
LOC -- Letter of Credit
LTD -- Limited
PLC -- Public Limited Company
VRDB -- Variable Rate Demand Bond
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $1,342,675,124
- ------------------------------------------------------------------------------
Income receivable 4,185,488
- ------------------------------------------------------------------------------ --------------
Total assets 1,346,860,612
- ------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------
Payable for investments purchased $13,000,000
- ----------------------------------------------------------------
Income distribution payable 3,340,015
- ----------------------------------------------------------------
Payable to Bank 383,320
- ----------------------------------------------------------------
Accrued expenses 775,385
- ---------------------------------------------------------------- -----------
Total liabilities 17,498,720
- ------------------------------------------------------------------------------ --------------
NET ASSETS for 1,329,361,892 shares outstanding $1,329,361,892
- ------------------------------------------------------------------------------ --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$1,329,361,892/1,329,361,892 shares outstanding $1.00
- ------------------------------------------------------------------------------ --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $36,990,523
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 3,084,348
- --------------------------------------------------------------------
Administrative personnel and services fee 466,970
- --------------------------------------------------------------------
Custodian fees 92,531
- --------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 875,955
- --------------------------------------------------------------------
Directors'/Trustees' fees 6,588
- --------------------------------------------------------------------
Auditing fees 6,954
- --------------------------------------------------------------------
Legal fees 10,650
- --------------------------------------------------------------------
Portfolio accounting fees 67,856
- --------------------------------------------------------------------
Distribution services fee 2,159,044
- --------------------------------------------------------------------
Shareholder services fee 1,542,174
- --------------------------------------------------------------------
Share registration costs 131,743
- --------------------------------------------------------------------
Printing and postage 25,803
- --------------------------------------------------------------------
Insurance premiums 8,052
- --------------------------------------------------------------------
Taxes 66,959
- --------------------------------------------------------------------
Miscellaneous 15,189
- -------------------------------------------------------------------- -----------
Total expenses 8,560,816
- --------------------------------------------------------------------
Waivers--
- --------------------------------------------------------------------
Waiver of investment advisory fee $ (884,490)
- ------------------------------------------------------
Waiver of distribution services fee (1,542,174)
- ------------------------------------------------------ -----------
Total waivers (2,426,664)
- -------------------------------------------------------------------- -----------
Net expenses 6,134,152
- ----------------------------------------------------------------------------------- -----------
Net investment income $30,856,371
- ----------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
----------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 30,856,371 $ 40,486,440
- ------------------------------------------------------ ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income (30,856,371) (40,486,440)
- ------------------------------------------------------ ----------------- ---------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 2,888,515,001 4,556,300,176
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 27,515,065 37,549,911
- ------------------------------------------------------
Cost of shares redeemed (2,613,751,452) (4,357,913,880)
- ------------------------------------------------------ ----------------- ---------------
Change in net assets resulting from share
transactions 302,278,614 235,936,207
- ------------------------------------------------------ ----------------- ---------------
Change in net assets 302,278,614 235,936,207
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 1,027,083,278 791,147,071
- ------------------------------------------------------ ----------------- ---------------
End of period $ 1,329,361,892 $ 1,027,083,278
- ------------------------------------------------------ ----------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MAY 31,
NOVEMBER 30, -----------------------------------------------------------------
1995 1995 1994 1993 1992 1991 1990(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 0.05 0.02 0.03 0.04 0.07 0.06
- ----------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.03) (0.05) (0.02) (0.03) (0.04) (0.07) (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) 2.53% 4.60% 2.48% 2.61% 4.37% 6.99% 6.56%
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 0.99%* 0.99% 0.99% 0.99% 0.98% 0.94% 0.73%*
- ----------------------------------------
Net investment income 4.99%* 4.57% 2.45% 2.58% 4.21% 6.50% 7.82%*
- ----------------------------------------
Expense waiver/reimbursement(c) 0.39%* 0.20% 0.18% 0.15% 0.22% 0.44% 0.46%*
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period (000 omitted) $1,329,362 $1,027,083 $791,147 $796,832 $750,016 $562,465 $189,254
- ----------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 18, 1989 (date of initial
public investment) to May 31 ,1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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)
PRIME CASH SERIES
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series (the "Corporation") is registered under the Investment Company
Act of 1940, (the "Act") as an open-end, management investment company. The
Corporation consists of three diversified portfolios and one non-diversified
portfolio (Municipal Cash Series). The financial statements included herein are
only those of Prime Cash Series (the "Fund"). The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(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--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors. Risks may
arise from the potential inability of counterparties to honor the terms of
the repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
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.
PRIME CASH SERIES
- --------------------------------------------------------------------------------
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.
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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In some cases, the restricted securities may be resold without registration
upon exercise of a demand feature. The Fund will not incur any registration
costs upon such resales. Restricted securities are valued at amortized cost
in accordance with Rule 2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at November 30,
1995 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
---------------------------------------------------- ---------------- ----------------
<S> <C> <C>
SMM Trust Series 1995-L ,5.833% 08/04/95 $9,998,400
----------------------------------------------------
SMM Trust Series 1995-B ,5.832% 08/04/95 10,000,000
----------------------------------------------------
SMM Trust Series 1995-I ,5.864% 05/26/95 29,995,705
----------------------------------------------------
SMM Trust Series 1995-N, 5.925% 11/08/95 16,000,000
----------------------------------------------------
Toledo Medical Building I L.P. 11/02/95 3,720,000
----------------------------------------------------
AFS Insurance Premium Receivables Trust, Series
1994-A 08/16/94 20,000,000
----------------------------------------------------
Sun Life Insurance Co. of America 09/20/93 12,500,000
----------------------------------------------------
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
PRIME CASH SERIES
- --------------------------------------------------------------------------------
(3) CAPITAL STOCK
At November 30, 1995 there were 12,500,000,000 shares of $0.001 par value
capital stock authorized. Capital paid in aggregated $1,329,361,892.
Transactions in capital stock were as follows.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
- -------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Shares sold 2,888,515,001 4,556,300,176
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 27,515,065 37,549,911
- --------------------------------------------------------
Shares redeemed (2,613,751,452) (4,357,913,880)
- -------------------------------------------------------- ---------------- --------------
Net change resulting from share transactions 302,278,614 235,936,207
- -------------------------------------------------------- ---------------- --------------
</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
.50 of 1% of the Fund's average daily net assets.The Adviser may voluntarily
choose to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. This 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.
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
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .35 of 1% of the average daily net assets of the Fund, annually,
to reimburse FSC. The distributor may voluntarily choose to waive any portion of
its fee. The distributor can modify or terminate this voluntary waiver at any
time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), serves as transfer and dividend disbursing agent for the Fund. This
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
PRIME CASH SERIES
- --------------------------------------------------------------------------------
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.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
<TABLE>
<S> <C>
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
Wesley W. Posvar David M. Taylor
Marjorie P. Smuts Treasurer
Charles H. Field
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 fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
-----------------------------------
-----------------------------------
PRIME
-----------------------------------
CASH
-----------------------------------
SERIES
-----------------------------------
-----------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1996
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 147551105
0122606 (1/96)
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Treasury Cash
Series, which covers the six-month period ended November 30, 1995. The report
begins with an investment review by the fund's portfolio manager, which is
followed by a complete listing of the fund's investments and its financial
statements.
During the reporting period, Treasury Cash Series helped its shareholders earn a
total of $0.03 in dividends per share on their ready cash, while offering the
advantages of daily liquidity and stability of principal.* Assets reached $724.4
million at the reporting period's end.
At the end of the reporting period, 83.9% of the fund's assets was invested in
repurchase agreements backed by U.S. government securities because these
securities offered yield advantage over many direct government securities. The
remainder of the fund's assets were invested in direct U.S. Treasury bills and
notes.
Thank you for choosing Treasury Cash Series as a convenient way to put your cash
to work pursuing income from U.S. Treasury obligations. Please contact your
investment representative if you have any questions about your investment.
Sincerely,
LOGO
Richard B. Fisher
President
January 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Treasury Cash Series is invested in direct obligations of the U.S. Treasury,
either in the form of notes and bills or as collateral for repurchase
agreements. The fund is rated AAAm by Standard & Poor's Ratings Group and Aaa by
Moody's Investors Service, Inc.*
Over the six-month reporting period ended November 30, 1995, the Federal Reserve
Board (the "Fed") reversed course in monetary policy, lowering the federal funds
target rate by 25 basis points in early July, 1995 from 6% to 5.75%. This easing
in monetary policy came on the heels of seven consecutive tightenings from
February, 1994 to February, 1995, which brought the federal funds target rate
from 3% to 6%. The Fed cited receding inflationary pressures as the reason for
the ease, although weak economic reports in the second quarter of 1995 were also
thought to have had an influence.
Short-term interest rates led the Fed move downward. The rate on the three-month
Treasury bill declined by 30 basis points over the reporting period, from 5.8%
to 5.5%. The front end of the yield curve inverted over the reporting period,
with the one-year Treasury bill trading 12 basis points below the three-month
Treasury bill at the end of November, 1995. This change in shape was a result of
growing market expectations of additional Fed easing in the not too distant
future. Shortly after the end of the reporting period, at its Federal Open
Market Committee Meeting on December 19, 1995, the Fed confirmed market
expectations by voting to ease monetary policy slightly, reducing the federal
funds target rate from 5.75% to 5.5%. The Fed again cited a better-than-expected
outlook for inflation as the driving force behind the move.
Over the reporting period, the market was also influenced by the ongoing budget
negotiations in Washington, D.C. The Treasury auction schedule was disrupted in
late October and early November as the debt ceiling was temporarily reached.
Currently, the federal government is experiencing its second partial shutdown
since the negotiations began, as Congress and the White House appear to have
reached an impasse. Nevertheless, expectations of a positive outcome toward
credible deficit reduction resulting from the talks have been priced into the
market.
Recently, the fund has been managed with a 40-to 50-day average maturity target
range, a moderately bullish stance in anticipation of further gradual eases by
the Fed. Due to larger inflows of cash, however, the average maturity of the
fund has fallen below that target range. In spite of third quarter GDP growth at
4.2%, recent data on the economy has been somewhat mixed, with the retail and
manufacturing sectors relatively sluggish. Fourth quarter growth is expected to
have been closer to the 2 1/2% rate of growth considered by many to be
non-inflationary. With monetary policy still considered by many to be slightly
restrictive, we would expect to see another slight easing in the federal funds
target rate by the end of the first quarter of 1996.
The fund structure continues to be barbelled in nature, and maximizes
performance through ongoing relative value analysis. As a yield advantage
continued to exist for investments in repurchase agreements versus direct
investments in short-term Treasury securities, a substantial percentage of the
fund's investments remained in repurchase agreements. The fund continued to
combine attractive yields from repurchase agreements collateralized by U.S.
Treasury securities with purchases of Treasury securities with 6 to 13 month
maturities.
* These ratings are obtained after S&P evaluates a number of factors, including
credit quality, market price exposure and management. S&P monitors the
portfolio weekly for developments that could cause changes in the ratings.
Money market funds and bond funds rated Aaa by Moody's are judged to be of an
investment quality similar to Aaa-rated fixed income obligations, that is,
they are judged to be of the best quality. Ratings are subject to change and
do not remove market risks.
TREASURY CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM U.S. TREASURY OBLIGATIONS--16.3%
- ----------------------------------------------------------------------------------
(A) U.S. TREASURY BILLS--12.0%
----------------------------------------------------------------
$89,000,000 5.215%-6.175%, 12/21/1995-7/25/1996 $ 87,182,706
----------------------------------------------------------------
U.S. TREASURY NOTES--4.3%
----------------------------------------------------------------
30,500,000 4.625%-9.375%, 2/15/1996-9/30/1996 30,720,914
---------------------------------------------------------------- ------------
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 117,903,620
---------------------------------------------------------------- ------------
(B) REPURCHASE AGREEMENTS--83.9%
- ----------------------------------------------------------------------------------
50,000,000 Aubrey G. Langston and Company, Inc., 6.00%, dated 11/30/1995,
due 12/1/1995 50,000,000
----------------------------------------------------------------
25,000,000 BT Securities, Inc., 5.92%, dated 11/30/1995, due 12/1/1995 25,000,000
----------------------------------------------------------------
100,800,000 Barclays de Zoete Wedd Securities, Inc., 5.93%, dated
11/30/1995, due 12/1/1995 100,800,000
----------------------------------------------------------------
30,000,000 Bear, Stearns & Co., Inc., 5.90%, dated 11/30/1995, due
12/1/1995 30,000,000
----------------------------------------------------------------
30,000,000 Chemical Government Securities, 5.90%, dated 11/30/1995, due
12/1/1995 30,000,000
----------------------------------------------------------------
30,000,000 Daiwa Securities America, Inc., 5.90%, dated 11/30/1995, due
12/1/1995 30,000,000
----------------------------------------------------------------
25,000,000 Deutsche Bank Government Securities, Inc., 5.93%, dated
11/30/1995, due 12/1/1995 25,000,000
----------------------------------------------------------------
20,000,000 Donaldson, Lufkin & Jenrette Securities Corp., 5.90%, dated
11/30/1995, due 12/1/1995 20,000,000
----------------------------------------------------------------
30,000,000 Dresdner Securities (USA), Inc., 5.90%, dated 11/30/1995, due
12/1/1995 30,000,000
----------------------------------------------------------------
30,000,000 First Chicago Capital Markets, Inc., 5.90%, dated 11/30/1995,
due 12/1/1995 30,000,000
----------------------------------------------------------------
20,000,000 Fuji Securities, Inc., 5.93%, dated 11/30/1995, due 12/1/1995 20,000,000
----------------------------------------------------------------
30,000,000 HSBC Securities, Inc., 5.93%, dated 11/30/1995, due 12/1/1995 30,000,000
----------------------------------------------------------------
</TABLE>
TREASURY CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
(B)REPURCHASE AGREEMENTS--CONTINUED
- ----------------------------------------------------------------------------------
$30,000,000 Harris-Nesbitt, Thomson Securities, Inc., 5.93%, dated
11/30/1995, due 12/1/1995 $ 30,000,000
----------------------------------------------------------------
15,000,000 J.P. Morgan Securities, Inc., 5.93%, dated 11/30/1995, due
12/1/1995 15,000,000
----------------------------------------------------------------
30,000,000 National Westminster Bank USA, 5.90%, dated 11/30/1995, due
12/1/1995 30,000,000
----------------------------------------------------------------
30,000,000 NationsBank of North Carolina, 5.92%, dated 11/30/1995, due
12/1/1995 30,000,000
----------------------------------------------------------------
30,000,000 Nikko Securities Co. International, Inc., 5.90%, dated
11/30/1995, due 12/1/1995 30,000,000
----------------------------------------------------------------
25,000,000 SBC Capital Markets, 5.92%, dated 11/30/1995, due 12/1/1995 25,000,000
----------------------------------------------------------------
7,000,000 (c) Donaldson, Lufkin & Jenrette Securities Corp., 5.70%, dated
10/18/1995, due 12/18/1995 7,000,000
----------------------------------------------------------------
20,000,000 (c) SBC Capital Markets, 5.71%, dated 11/24/1995, due 1/23/1996 20,000,000
---------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 607,800,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $725,703,620
---------------------------------------------------------------- ------------
</TABLE>
(a) Each issue shows the rate of discount at time of purchase.
(b) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($724,436,904) at November 30, 1995.
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in repurchase agreements $607,800,000
- -----------------------------------------------------------------
Investments in securities 117,903,620
- ----------------------------------------------------------------- ------------
Total investments in securities, at amortized cost and value $725,703,620
- --------------------------------------------------------------------------------
Cash 171,177
- --------------------------------------------------------------------------------
Income receivable 632,342
- -------------------------------------------------------------------------------- ------------
Total assets 726,507,139
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable 1,772,199
- -----------------------------------------------------------------
Accrued expenses 298,036
- ----------------------------------------------------------------- ------------
Total liabilities 2,070,235
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 724,436,904 shares outstanding $724,436,904
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
($724,436,904 / 724,436,904 shares outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $15,657,711
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $1,314,103
- ---------------------------------------------------------------------
Administrative personnel and services fee 198,955
- ---------------------------------------------------------------------
Custodian fees 66,590
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 98,128
- ---------------------------------------------------------------------
Directors'/Trustees' fees 4,026
- ---------------------------------------------------------------------
Auditing fees 6,588
- ---------------------------------------------------------------------
Legal fees 4,026
- ---------------------------------------------------------------------
Portfolio accounting fees 48,564
- ---------------------------------------------------------------------
Distribution services fee 919,872
- ---------------------------------------------------------------------
Shareholder services fee 657,052
- ---------------------------------------------------------------------
Share registration costs 67,593
- ---------------------------------------------------------------------
Printing and postage 9,516
- ---------------------------------------------------------------------
Insurance premiums 4,941
- ---------------------------------------------------------------------
Taxes 25,071
- ---------------------------------------------------------------------
Miscellaneous 6,222
- --------------------------------------------------------------------- ----------
Total expenses 3,431,247
- ---------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------
Waiver of investment advisory fee $(160,707)
- ---------------------------------------------------------
Waiver of distribution services fee (657,051)
- --------------------------------------------------------- ---------
Total waivers (817,758)
- --------------------------------------------------------------------- ----------
Net expenses 2,613,489
- ----------------------------------------------------------------------------------- -----------
Net investment income $13,044,222
- ----------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
------------------ ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 13,044,222 $ 18,450,054
- ------------------------------------------------------ ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income (13,044,222) (18,450,054)
- ------------------------------------------------------ ----------------- ---------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 1,699,997,449 2,391,925,952
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 9,471,609 14,469,163
- ------------------------------------------------------
Cost of shares redeemed (1,409,123,384) (2,409,309,269)
- ------------------------------------------------------ ----------------- ---------------
Change in net assets resulting from share
transactions 300,345,674 (2,914,154)
- ------------------------------------------------------ ----------------- ---------------
Change in net assets 300,345,674 (2,914,154)
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 424,091,230 427,005,384
- ------------------------------------------------------ ----------------- ---------------
End of period $ 724,436,904 $ 424,091,230
- ------------------------------------------------------ ----------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MAY 31,
NOVEMBER 30, ---------------------------------------------------------
1995 1995 1994 1993 1992 1991 1990(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 0.02 0.02 0.04 0.07 0.02
- ----------------------------------
LESS DISTRIBUTIONS
- ----------------------------------
Distributions from net
investment income (0.03) (0.04) (0.02) (0.02) (0.04) (0.07) (0.02)
- ---------------------------------- -------- ----- ----- ----- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------- -------- ----- ----- ----- ----- ----- ------
TOTAL RETURN(B) 2.50% 4.34% 2.37% 2.47% 4.24% 6.83% 2.42%
- ----------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------
Expenses 0.99%* 0.99% 0.99% 0.99% 0.98% 0.88% 0.60%*
- ----------------------------------
Net investment income 4.96%* 4.26% 2.33% 2.46% 4.18% 6.39% 7.75%*
- ----------------------------------
Expense waiver/reimbursement(c) 0.31%* 0.08% 0.10% 0.04% 0.04% 0.22% 0.44%*
- ----------------------------------
SUPPLEMENTAL DATA
- ----------------------------------
Net assets, end of period (000
omitted) $724,437 $424,091 $427,005 $532,334 $638,761 $713,430 $127,800
- ----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 7, 1990 (date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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)
TREASURY CASH SERIES
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, (the "Act") as an open-end, management investment company.
The Corporation consists of three diversified portfolios and one non-diversified
portfolio (Municipal Cash Series). The financial statements included herein are
only those of Treasury Cash Series (the "Fund"). The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(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--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors. Risks may
arise from the potential inability of counterparties to honor the terms of
the repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
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.
TREASURY CASH SERIES
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1995, there were 12,500,000,000 shares of $0.001 par value
capital stock authorized. Capital paid-in aggregated $724,436,904. Transactions
in capital stock were as follows:
<TABLE>
<CAPTION>
SIX-MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1995 MAY 31, 1995
<S> <C> <C>
- ------------------------------------------------------- ------------------ --------------
Shares sold 1,699,997,449 2,391,925,952
- -------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 9,471,609 14,469,163
- -------------------------------------------------------
Shares redeemed (1,409,123,384) (2,409,309,269)
- ------------------------------------------------------- ----------------- --------------
Net change resulting from capital stock
transactions 300,345,674 (2,914,154)
- ------------------------------------------------------- ----------------- --------------
</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
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. This 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.
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
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .35 of 1% of the average daily net assets of the Fund shares,
annually, to reimburse FSC. The distributor may voluntarily choose to waive any
portion of its fee. The distributor can modify or terminate this voluntary
waiver at any time at its sole discretion.
TREASURY CASH SERIES
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
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.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee 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.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
<TABLE>
<S> <C>
DIRECTORS OFFICERS
- -------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
Wesley W. Posvar David M. Taylor
Marjorie P. Smuts Treasurer
Charles H. Field
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 fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
-----------------------------------
-----------------------------------
TREASURY
-----------------------------------
CASH
-----------------------------------
SERIES
-----------------------------------
-----------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
NOVEMBER 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 147551402
O122607 (1/96)
-----------------------------------
-----------------------------------
-----------------------------------
