PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I'm pleased to present the Semi-Annual Report to Shareholders for Government
Cash Series, a portfolio of Cash Trust Series, Inc., which covers the six-month
period ended November 30, 1996. 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, the fund helped its shareholders earn a total of
$0.02 in dividends per share on their ready cash--while offering the advantages
of daily liquidity and stability of principal.* The fund's net assets increased
to $572.1 million, with almost half of the assets at the end of the reporting
period invested in securities issued by the United States Treasury and various
government agencies, including the Farm Credit Banks, Federal Home Loan Banks,
Federal Home Loan Mortgage Association, Federal National Mortgage Association,
and Student Loan Marketing Association. More than half of the fund's assets were
invested in repurchase agreements backed by government or agency securities,
which 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 daily income from U.S. government securities. Please
contact your investment representative if you have any questions about the fund.
Sincerely,
/s/ Richard B. Fisher
Richard B. Fisher
President
January 15, 1997
* 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Government Cash Series invests in direct U.S. Treasury and U.S. government
agency obligations and in repurchase agreements collateralized by U.S.
government or agency securities. The fund's investments included issues of the
Federal National Mortgage Association, Student Loan Marketing Association, Farm
Credit Banks, Federal Home Loan Banks, and Federal Home Loan Mortgage
Association, and a small Treasury position for liquidity purposes.
Over the six months ended November 30, 1996, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that exceeded the 2.50% pace
thought to be non-inflationary. Confronted with persistent strength in the
housing, auto, and retail sectors, the Fed stuck to its belief that economic
growth in the second half of the year would return to a more moderate pace. Over
the reporting period, the market itself was not so sure, and movements in
interest rates proved to be rather volatile as expectations regarding the timing
and extent of the next policy move from the Fed swayed back and forth with each
new piece of economic data. Signs of an economic slowdown began to emerge in the
third quarter of 1996, but the market then fretted that it might not be enough
to prevent the Fed from tightening in order to ward off inflationary pressures.
By the end of the reporting period, however, the market calmed as growth in
employment and housing moderated and inflation remained tame. Overall, the
Federal funds target rate remained unchanged at 5.25%, where it has been since
late January 1996.
Movements in interest rates reflected the market uncertainty. The yield on the
three-month Treasury bill began the reporting period at 5.20% in early June and
rose to 5.35% by late August amid fears that the robust economy might spark
inflation--particularly in the face of tight labor market conditions. The yield
then fell to 5.15% as signs of tempered growth began to appear, rose once more
to 5.35% as the market continued to reflect concerns over developing wage
pressures, and then plunged to 5.00% in late September/early October as relief
finally took hold. The yield finally rebounded to a more realistic 5.15% and
traded within a narrow range for the remainder of the reporting period, as the
market broke its trend of over-reacting to each economic release and accepted
the idea that the Fed was likely to be on hold indefinitely. Overall, the short
end of the Treasury yield curve ended the reporting period 27 basis points
flatter than it began, reflecting the retreat from expectations of an imminent
tightening in monetary policy.
For most of the six-month reporting period, the fund was targeted in 35 to 45
day average maturity range, representing a neutral stance. The average maturity
of the fund varied within that range according to relative value opportunities
available in the short-term Treasury, government agency and repo markets. The
fund continued to combine attractive yields from repurchase agreements
collateralized by U.S. Treasury and government agency securities with short-term
agency floating rate notes and Treasury and agency securities with longer
maturities of six to 12 months. The fund increased its holdings of agency
discount notes modestly over the period, as spreads on these instruments were at
attractive levels. With a friendly inflation picture and no signs of a dramatic
change in the overall fundamental picture of the economy on the horizon, the
fund will likely maintain its current neutral positioning in the near future.
GOVERNMENT CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
SHORT-TERM OBLIGATIONS--48.2%
- ------------------------------------------------------------------------------------------------
FEDERAL FARM CREDIT BANK, NOTE--0.4%
---------------------------------------------------------------------------------
$ 2,500,000 5.60%, 6/3/1997 $ 2,498,232
--------------------------------------------------------------------------------- --------------
(A)FEDERAL FARM CREDIT BANK, FLOATING RATE NOTES--2.4%
---------------------------------------------------------------------------------
14,000,000 5.41%, 1/1/1997 13,986,861
--------------------------------------------------------------------------------- --------------
FEDERAL HOME LOAN BANK, NOTES--0.4%
---------------------------------------------------------------------------------
2,400,000 5.71%, 11/18/1997 2,399,277
--------------------------------------------------------------------------------- --------------
(B)FEDERAL HOME LOAN BANK, DISCOUNT NOTES--6.7%
---------------------------------------------------------------------------------
38,500,000 5.42%--5.72%, 12/31/1996--5/13/1997 38,131,118
--------------------------------------------------------------------------------- --------------
(A)FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--1.3%
---------------------------------------------------------------------------------
7,000,000 5.31%, 12/4/1996 6,993,907
--------------------------------------------------------------------------------- --------------
FEDERAL HOME LOAN MORTGAGE ASSOCIATION, NOTES--0.7%
---------------------------------------------------------------------------------
4,000,000 5.64%, 8/28/1997 3,992,786
--------------------------------------------------------------------------------- --------------
(B)FEDERAL HOME LOAN MORTGAGE ASSOCIATION, DISCOUNT NOTES--1.6%
---------------------------------------------------------------------------------
9,000,000 5.37%, 1/3/1997 8,956,853
--------------------------------------------------------------------------------- --------------
(A)FEDERAL HOME LOAN MORTGAGE ASSOCIATION, FLOATING RATE NOTES--0.9%
---------------------------------------------------------------------------------
5,000,000 5.37%, 12/3/1996 4,997,962
--------------------------------------------------------------------------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION, NOTES--0.6%
---------------------------------------------------------------------------------
3,400,000 5.41%, 12/6/1996 3,399,926
--------------------------------------------------------------------------------- --------------
(B)FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--12.4%
---------------------------------------------------------------------------------
72,000,000 5.25%--5.75%, 12/19/1996--5/29/1997 71,194,640
--------------------------------------------------------------------------------- --------------
(A)FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES--5.9%
---------------------------------------------------------------------------------
34,000,000 5.22%--5.37%, 12/3/1996--12/17/1996 33,984,771
--------------------------------------------------------------------------------- --------------
STUDENT LOAN MARKETING ASSOCIATION, NOTES--0.3%
---------------------------------------------------------------------------------
2,000,000 5.62%, 6/30/1997 1,995,874
--------------------------------------------------------------------------------- --------------
(A)STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE NOTES--4.0%
---------------------------------------------------------------------------------
22,650,000 5.35%--5.56%, 12/3/1996 22,646,785
--------------------------------------------------------------------------------- --------------
(B)UNITED STATES TREASURY BILLS--1.4%
---------------------------------------------------------------------------------
5,000,000 5.19%--5.26%, 3/6/1997 4,934,727
---------------------------------------------------------------------------------
3,000,000 5.67%, 8/21/1997 2,882,527
--------------------------------------------------------------------------------- --------------
Total 7,817,254
--------------------------------------------------------------------------------- --------------
UNITED STATES TREASURY NOTES--9.2%
---------------------------------------------------------------------------------
6,000,000 5.63%, 6/30/1997 5,993,056
---------------------------------------------------------------------------------
5,500,000 5.75%, 9/30/1997 5,496,668
---------------------------------------------------------------------------------
9,000,000 6.00%, 8/31/1997 9,032,605
---------------------------------------------------------------------------------
9,000,000 6.13%, 5/31/1997 9,026,323
---------------------------------------------------------------------------------
7,000,000 6.63%--6.88%, 3/31/1997 7,023,008
---------------------------------------------------------------------------------
5,000,000 7.25%, 11/30/1996 5,000,000
---------------------------------------------------------------------------------
3,000,000 7.50%, 12/31/1996 3,005,441
---------------------------------------------------------------------------------
8,000,000 8.50%, 4/15/1997 8,082,727
--------------------------------------------------------------------------------- --------------
Total 52,659,828
--------------------------------------------------------------------------------- --------------
TOTAL SHORT-TERM OBLIGATIONS 275,656,074
--------------------------------------------------------------------------------- --------------
(C) REPURCHASE AGREEMENTS--58.3%
- ------------------------------------------------------------------------------------------------
10,000,000 Bear, Stearns and Co., 5.750%, dated 11/29/1996, due 12/2/1996 10,000,000
---------------------------------------------------------------------------------
4,700,000 Barclays de Zoete Wedd Securities, Inc., 5.720%, dated 11/29/1996, due 12/2/1996 4,700,000
---------------------------------------------------------------------------------
25,000,000 CIBC Wood Gundy Securities Corp., 5.730%, dated 11/29/1996, due 12/2/1996 25,000,000
---------------------------------------------------------------------------------
13,000,000 (d)CS First Boston, Inc., 6.500%, dated 11/19/1996, due 1/2/1997 13,000,000
---------------------------------------------------------------------------------
25,000,000 Chase Government Securities, Inc., 5.450%, dated 11/27/1996, due
12/2/1996 25,000,000
---------------------------------------------------------------------------------
20,000,000 Deutsche Bank Government Securities, Inc., 5.750%, dated
11/29/1996, due 12/2/1996 20,000,000
---------------------------------------------------------------------------------
70,000,000 Fuji Government Securities, Inc., 5.750%, dated
11/29/1996, due 12/2/1996 70,000,000
---------------------------------------------------------------------------------
9,000,000 (d) Goldman Sachs Group, LP, 5.320%, dated 11/19/1996, due
12/19/1996 9,000,000
---------------------------------------------------------------------------------
20,000,000 HSBC Securities, Inc., 5.750%, dated 11/29/1996, due 12/2/1996 20,000,000
---------------------------------------------------------------------------------
20,000,000 Nikko Securities, 5.750%, dated 11/29/1996, due 12/2/1996 20,000,000
---------------------------------------------------------------------------------
25,000,000 Nomura Securities Intenational, Inc., 5.450%, dated 11/27/1996, due 12/2/1996 25,000,000
---------------------------------------------------------------------------------
45,000,000 PaineWebber Group, Inc., 5.750%, dated 11/29/1996, due 12/2/1996 45,000,000
---------------------------------------------------------------------------------
13,000,000 (d)Swiss Bank Capital Markets, 5.380%, dated 10/11/1996, due 1/13/1997 13,000,000
---------------------------------------------------------------------------------
20,000,000 UBS Securities, Inc., 5.750%, dated 11/29/1996, due 12/2/1996 20,000,000
---------------------------------------------------------------------------------
14,000,000 (d)UBS Securities, Inc., 5.370%, dated 11/19/1996, due 1/21/1997 14,000,000
--------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 333,700,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 609,356,074
--------------------------------------------------------------------------------- --------------
</TABLE>
(a) Denotes variable rate and floating rate obligations for which the current
rate is shown.
(b) Each issue shows the rate of discount at the time of purchase.
(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.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($572,133,423) at November 30, 1996.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in repurchase agreements $ 333,700,000
- ---------------------------------------------------------------------------------
Investments in securities 275,656,074
- --------------------------------------------------------------------------------- --------------
Total investments in securities, at amortized cost and value $ 609,356,074
- -------------------------------------------------------------------------------------------------
Cash 106,779
- -------------------------------------------------------------------------------------------------
Income receivable 1,946,560
- ------------------------------------------------------------------------------------------------- --------------
Total assets 611,409,413
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------
Payable for investments purchased 37,878,517
- ---------------------------------------------------------------------------------
Income distribution payable 1,212,381
- ---------------------------------------------------------------------------------
Accrued expenses 185,092
- --------------------------------------------------------------------------------- --------------
Total liabilities 39,275,990
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 572,133,423 shares outstanding $ 572,133,423
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
$572,133,423 / 572,133,423 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 15,275,526
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 1,411,913
- ------------------------------------------------------------------------------------
Administrative personnel and services fee 213,461
- ------------------------------------------------------------------------------------
Custodian fees 64,372
- ------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 184,813
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 3,846
- ------------------------------------------------------------------------------------
Auditing fees 6,834
- ------------------------------------------------------------------------------------
Legal fees 2,196
- ------------------------------------------------------------------------------------
Portfolio accounting fees 55,218
- ------------------------------------------------------------------------------------
Distribution services fee 988,339
- ------------------------------------------------------------------------------------
Shareholder services fee 705,957
- ------------------------------------------------------------------------------------
Share registration costs 31,020
- ------------------------------------------------------------------------------------
Printing and postage 14,526
- ------------------------------------------------------------------------------------
Insurance premiums 4,758
- ------------------------------------------------------------------------------------
Taxes 25,071
- ------------------------------------------------------------------------------------
Miscellaneous 3,543
- ------------------------------------------------------------------------------------ -------------
Total expenses 3,715,867
- ------------------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------
Waiver of investment advisory fee $ (201,897)
- ---------------------------------------------------------------------
Waiver of distribution services fee (705,957)
- --------------------------------------------------------------------- -------------
Total waivers (907,854)
- ------------------------------------------------------------------------------------ -------------
Net expenses 2,808,013
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 12,467,513
- --------------------------------------------------------------------------------------------------- -------------
</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, 1996 MAY 31, 1996
- ---------------------------------------------------------------------- -------------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------
Net investment income $ 12,467,513 $ 22,925,563
- ---------------------------------------------------------------------- ---------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------
Distributions from net investment income (12,467,513) (22,925,563)
- ---------------------------------------------------------------------- ---------------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------
Proceeds from sale of shares 1,754,320,256 3,204,189,310
- ----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 10,597,566 18,085,135
- ----------------------------------------------------------------------
Cost of shares redeemed (1,640,913,108) (3,227,241,493)
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets resulting from share transactions 124,004,714 (4,967,048)
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets 124,004,714 (4,967,048)
- ----------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------
Beginning of period 448,128,709 453,095,757
- ---------------------------------------------------------------------- ---------------------- -----------------
End of period $ 572,133,423 $ 448,128,709
- ---------------------------------------------------------------------- ---------------------- -----------------
</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, ---------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992 1991 1990(A)
- ----------------------------- --------------- ----- ------ ------ ------ ------ ------ --------
<S> <C> <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 $ 1.00
- -----------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------------
Net investment income 0.02 0.05 0.04 0.02 0.03 0.04 0.07 0.06
- -----------------------------
LESS DISTRIBUTIONS
- -----------------------------
Distributions from net
investment income (0.02) (0.05) (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 $ 1.00
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.23% 4.85% 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% 0.99% 0.98% 0.94% 0.73%*
- -----------------------------
Net investment income 4.42%* 4.75% 4.35% 2.41% 2.53% 4.25% 6.48% 7.74%*
- -----------------------------
Expense waiver/
reimbursement (c) 0.32%* 0.30% 0.08% 0.09% 0.06% 0.06% 0.13% 0.32%*
- -----------------------------
SUPPLEMENTAL DATA
- -----------------------------
Net assets, end of period
(000 omitted) $572,133 $448,129 $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, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the 'Corporation') is registered under the Investment
Company Act of 1940, as amended (the 'Act') as an open-end, management
investment company. The Corporation consists of four portfolios. 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. The investment
objective of the Fund is current income consistent with stability of principal
and liquidity.
(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's use of the amortized cost method to value
its portfolio securities is 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 (the
'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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1996, there were 12,500,000,000 shares of $ 0.001 par value
capital stock authorized. At November 30, 1996, capital paid in aggregated
$572,133,423. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
- ----------------------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Shares sold 1,754,320,256 3,204,189,310
- -----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 10,597,566 18,085,135
- -----------------------------------------------------------------------
Shares redeemed (1,640,913,108) (3,227,241,493)
- ----------------------------------------------------------------------- ---------------------- ----------------
Net change resulting from share transactions 124,004,714 (4,967,048)
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
'Adviser'), receives for its services an annual investment advisory fee equal to
0.50% 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 Services Company ('FServ'), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the 'Plan')
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ('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 0.35% of the average daily net assets of the Fund shares,
annually, to compensate 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 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ('FSSC') serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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, Treasurer and Secretary
John E. Murray, Jr. S. Elliott Cohan
Wesley W. Posvar Assistant Secretary
Marjorie P. Smuts
</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
SERIES
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
NOVEMBER 30, 1996
LOGO OF FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 147551204
0122604 (1/97)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I'm pleased to present the Semi-Annual Report to Shareholders for Municipal Cash
Series, a portfolio of Cash Trust Series, Inc., which covers the six-month
period ended November 30, 1996. The Report begins with an investment review by
the fund's portfolio manager, which is followed by a complete listing of the
fund's tax-free securities issued by municipalities nationwide, and its
financial statements.
During the reporting period, the fund helped its shareholders earn a total of
$0.01 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 invested a total of $565.4 million in the fund's portfolio of
tax-free securities issued by municipalities nationwide. This figure represents
a large increase over the $478.6 million in total net assets on the first day of
the reporting period.
Thank you for choosing Municipal Cash Series as a convenient way to put your
cash to work pursuing daily tax-free income. Please contact your investment
representative if you have any questions about the fund.
Sincerely,
Richard B. Fisher
President
January 15, 1997
* 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. An
investment in the fund is 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 stable net asset value of $1.00 per share.
For the six month reporting period ended November 30, 1996, the fund paid
shareholders a total return of 1.38%, which is a taxable equivalent return of
2.28% for an investor in the highest federal tax bracket of 39.6%.* The
seven-day net yield of the fund as of November 30, 1996 was 2.79%.*
Although the Federal Reserve Board (the "Fed") maintained a constant monetary
policy over the reporting period in focus, the interest rate environment was
clouded by uncertainty. The reason for the concern was shifting sentiment
regarding the strength of the U.S. economy. The overriding concern beginning the
third quarter of 1996 was the undue strength of the economy. The Fed was worried
about rising consumer spending, gains in employment, and higher consumer prices.
The economic strength initially appeared during the latter part of the second
quarter of 1996 and influenced the interest rate environment through mid-July.
From June to mid-July, believing that inflation was an immediate concern, market
expectations were biased toward a Fed tightening. The market later retreated
from the view that the Fed would intervene as signs of a more benign economy
emerged in early August. In their August meeting, the Fed cited an economic
expansion that had "moderated somewhat" from the growth levels that were earlier
influencing the economy. However, once more during the period, market
expectations became inflationary as signs of a tight labor market appeared. The
inflationary concerns in the labor markets subsided in mid-September, and the
markets retreated to earlier levels. The market relaxed through the end of the
reporting period as signs of moderating growth became more concrete.
Yields on short-term government securities reflected the volatile mood in the
markets. Rates rose steadily through mid-July as the market expected the Fed to
tighten. The yield on the Treasury Note Constant Maturity One-Year Index began
June 1996 at 5.78% and rose to 5.90% by mid-July. By mid-August the index had
fallen to the 5.60% level and again rose to the 5.90% level by September. The
index ended November 1996 at 5.41%, which is approximately where it ended the
first quarter of 1996. The Bond Buyer One-Year Note Index, a proxy for the
yields of one-year municipal notes, exhibited roughly the same behavior as the
treasury index.** The Bond Buyer's Index began June 1996 at 3.88%, rose to 3.95%
by mid-July, retreated in August, climbed again in September, and ended November
1996 at 3.56%.
As long as inflation remains benign, the Fed should be content to sit on the
sidelines until confronted with signs of overriding strength or considerable
weakness in economic growth. The average maturity of the fund will continue to
be managed in accordance with our expectation for a stable monetary policy in
the near term. The fund's average maturity target of 50 to 55 days reflects our
neutral stance. Nevertheless, we are vigilant in our watch of market
developments to best serve our municipal money market clients.
*Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
**The Bond Buyer's Index is composed of 40 actively traded general obligation
and municipal revenue issues rated A or higher. Municipal bond yields are
measured against this unmanaged index.
MUNICIPAL CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ----------------------------------------------------------------------------------- --------------
<C> <S> <C>
SHORT-TERM MUNICIPALS--100.0%
- -------------------------------------------------------------------------------------------------
ALABAMA--1.7%
-----------------------------------------------------------------------------------
$ 485,000 Hoover, AL IDA Weekly VRDNs (Bud's Best Cookies, Inc.)/ (SouthTrust Bank of
Alabama, Birmingham LOC) $ 485,000
-----------------------------------------------------------------------------------
8,000,000 McIntosh, AL IDB Weekly VRDNs (Ciba Geigy Corp.)/(Union Bank of Switzerland, Zurich
LOC) 8,000,000
-----------------------------------------------------------------------------------
395,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell Manufacturing)/ (SouthTrust Bank of
Alabama, Birmingham LOC) 395,000
-----------------------------------------------------------------------------------
325,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell Manufacturing)/ (SouthTrust Bank of
Alabama, Birmingham LOC) 325,000
-----------------------------------------------------------------------------------
345,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell Manufacturing)/ (SouthTrust Bank of
Alabama, Birmingham LOC) 345,000
-----------------------------------------------------------------------------------
370,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell Manufacturing)/ (SouthTrust Bank of
Alabama, Birmingham LOC) 370,000
----------------------------------------------------------------------------------- --------------
Total 9,920,000
----------------------------------------------------------------------------------- --------------
ARIZONA--0.8%
-----------------------------------------------------------------------------------
4,400,000 Eloy, AZ IDA, (Series 1996) Weekly VRDNs (The Marley Cooling Tower Co.)/(First
Union National Bank, Charlotte, NC LOC) 4,400,000
----------------------------------------------------------------------------------- --------------
ARKANSAS--7.8%
-----------------------------------------------------------------------------------
9,000,000 Arkansas Development Finance Authority, (Series 1995) Weekly VRDNs (Paco Steel &
Engineering Corporation Project)/(Union Bank of California LOC) 9,000,000
-----------------------------------------------------------------------------------
7,000,000 Hope, AR , Solid Waste Disposal Revenue Bonds (Series 1994), 3.75% CP
(Temple-Inland Forest Products Corporation Project)/(Temple-Inland, Inc. GTD),
Mandatory Tender 1/21/1997 7,000,000
-----------------------------------------------------------------------------------
7,900,000 Hope, AR , Solid Waste Disposal Revenue Bonds (Series 1994), 3.80% CP
(Temple-Inland Forest Products Corporation Project)/(Temple-Inland, Inc. GTD),
Mandatory Tender 1/8/1997 7,900,000
-----------------------------------------------------------------------------------
$ 4,000,000 Hope, AR , Solid Waste Disposal Revenue Bonds (Series 1994), 3.85% CP
(Temple-Inland Forest Products Corporation Project)/(Temple-Inland, Inc. GTD),
Mandatory Tender 1/24/1997 $ 4,000,000
-----------------------------------------------------------------------------------
1,000,000 Sheridan, AR IDA, (Series B) Weekly VRDNs (H.H. Robertson Co.)/ (PNC Bank, NA LOC) 1,000,000
-----------------------------------------------------------------------------------
7,500,000 Siloam Springs, AR, IDRB (Series 1994) Weekly VRDNs (La-Z Boy Chair Co.)/(NBD Bank,
Michigan LOC) 7,500,000
-----------------------------------------------------------------------------------
8,000,000 Springdale, AR, IDA Weekly VRDNs (Newlywed Food)/(Mellon Bank NA, Pittsburgh LOC) 8,000,000
----------------------------------------------------------------------------------- --------------
Total 44,400,000
----------------------------------------------------------------------------------- --------------
CALIFORNIA--0.7%
-----------------------------------------------------------------------------------
1,785,000 Los Angeles County, CA Housing Authority, Single Family Mortgage Revenues, 4.125%
TOBs (GNMA COL)/(Corestates Bank NA, Philadelphia, PA LIQ), Optional Tender
6/1/1997 1,785,000
-----------------------------------------------------------------------------------
2,000,000 North County, CA Schools Financing Authority, 4.75% TRANs,
7/1/1997 2,006,686
----------------------------------------------------------------------------------- --------------
Total 3,791,686
----------------------------------------------------------------------------------- --------------
COLORADO--1.3%
-----------------------------------------------------------------------------------
4,500,000 Adams County, CO IDB, (Series 1993) Weekly VRDNs (Bace Manufacturing,
Inc.)/(Citibank NA, New York LOC) 4,500,000
-----------------------------------------------------------------------------------
2,800,000 Colorado HFA, (Series 1996) Weekly VRDNs (Neppl-Springs Fabrication)/(Bank One,
Colorado LOC) 2,800,000
----------------------------------------------------------------------------------- --------------
Total 7,300,000
----------------------------------------------------------------------------------- --------------
DISTRICT OF COLUMBIA--0.7%
-----------------------------------------------------------------------------------
4,000,000 District of Columbia Housing Finance Agency, (Series 1995B), 4.00% TOBs (United
States Treasury COL), Mandatory Tender 12/19/1996 4,000,000
----------------------------------------------------------------------------------- --------------
GEORGIA--4.8%
-----------------------------------------------------------------------------------
5,200,000 Clayton County, GA Development Authority, (Series 1994) Weekly VRDNs (Lear Seating
Corp.)/(Chase Manhattan Bank NA, New York LOC) 5,200,000
-----------------------------------------------------------------------------------
$ 3,490,000 Columbus, GA IDA Industrial & Port Development Commission, (Series 1992) Weekly
VRDNs (Maine Street Village Partnership)/ (Columbus Bank and Trust Co., GA LOC) $ 3,490,000
-----------------------------------------------------------------------------------
1,000,000 De Kalb County, GA Development Authority Weekly VRDNs (Rock-Tenn Company, Inc.
Project)/(SunTrust Bank, Atlanta LOC) 1,000,000
-----------------------------------------------------------------------------------
1,000,000 Forsythe County, GA Development Authority, IDRB (Series 1995) Weekly VRDNs
(American BOA, Inc. Project)/(Dresdner Bank Ag, Frankfurt LOC) 1,000,000
-----------------------------------------------------------------------------------
2,140,000 Franklin County, GA Industrial Building Authority, (Series 1995) Weekly VRDNs
(Bosal Industries, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) 2,140,000
-----------------------------------------------------------------------------------
2,310,000 Fulton County, GA IDA, (Series 1996) Weekly VRDNs (Peachtree-Broad Building, Ltd.
Project)/(SouthTrust Bank of Georgia, Atlanta LOC) 2,310,000
-----------------------------------------------------------------------------------
2,160,000 Gainesville, GA Redevelopment Authority, IDRB (Series 1986) Weekly VRDNs (Hotel of
Gainesville Associates Project)/(First Alabama Bank, Birmingham LOC) 2,160,000
-----------------------------------------------------------------------------------
4,000,000 Gwinnett County, GA IDA Daily VRDNs (Volvo)/(Union Bank of Switzerland, Zurich LOC) 4,000,000
-----------------------------------------------------------------------------------
1,500,000 Hart County, GA IDA, Revenue Bonds (Series 1996) Weekly VRDNs (Rock-Tenn Converting
Co. Project)/(SunTrust Bank, Atlanta LOC) 1,500,000
-----------------------------------------------------------------------------------
1,400,000 Marietta, GA Housing Authority, Multifamily Housing Revenue Bonds (Series 1995)
Weekly VRDNs (Chalet Apartments Project)/(General Electric Capital Corp. LOC) 1,400,000
-----------------------------------------------------------------------------------
3,000,000 Screven County, GA IDA, (Series 1995) Weekly VRDNs (Sylvania Yarn Systems, Inc.
Project)/(SunTrust Bank, Atlanta LOC) 3,000,000
----------------------------------------------------------------------------------- --------------
Total 27,200,000
----------------------------------------------------------------------------------- --------------
IDAHO--1.8%
-----------------------------------------------------------------------------------
205,000 Idaho Housing Agency, (Series 1988C), 4.125% TOBs (Corestates Bank NA,
Philadelphia, PA LIQ), Optional Tender 1/1/1997 205,000
-----------------------------------------------------------------------------------
$ 9,860,000 Idaho Housing Agency, PA-115 (1994 Series F) Weekly VRDNs (Merrill Lynch Capital
Services, Inc. LIQ) $ 9,860,000
----------------------------------------------------------------------------------- --------------
Total 10,065,000
----------------------------------------------------------------------------------- --------------
ILLINOIS--5.2%
-----------------------------------------------------------------------------------
7,400,000 Chicago, IL, Gas Supply Revenue Bonds (1993 Series B), 3.85% TOBs (Peoples Gas
Light & Coke Company), Optional Tender 12/1/1996 7,400,000
-----------------------------------------------------------------------------------
4,400,000 Community Unit School District Number 220, IL, 4.10% TANs,
1/1/1997 4,400,000
-----------------------------------------------------------------------------------
2,700,000 Illinois Development Finance Authority, Adjustable Rate IDRBs (Series 1996A) Weekly
VRDNs (Nimlok Company)/(Bank One, Chicago LOC) 2,700,000
-----------------------------------------------------------------------------------
10,705,000 Illinois Housing Development Authority, PT-82 (1994 Series B) Weekly VRDNs
(Rabobank Nederland, Utrecht LIQ) 10,705,000
-----------------------------------------------------------------------------------
4,000,000 Morton, IL, IDRB (Series 1996) Weekly VRDNs (Morton Welding Co, Inc. Project)/(Bank
One, Chicago LOC) 4,000,000
----------------------------------------------------------------------------------- --------------
Total 29,205,000
----------------------------------------------------------------------------------- --------------
INDIANA--6.0%
-----------------------------------------------------------------------------------
435,000 Avilla, IN, IDR Weekly VRDNs (Group Dekko International)/(Bank One, Indianapolis,
IN LOC) 435,000
-----------------------------------------------------------------------------------
2,130,000 Crown Point, IN, IDA Weekly VRDNs (D & M Manufacturing)/ (National City Bank,
Kentucky LOC) 2,130,000
-----------------------------------------------------------------------------------
2,600,000 Franklin, IN, Economic Development Revenue Refunding Bonds (Series 1994) Weekly
VRDNs (Pedcor Investments L.P.)/(Federal Home Loan Bank of Indianapolis LOC) 2,600,000
-----------------------------------------------------------------------------------
6,540,000 Gary, IN, Economic Development Refunding Revenue Bonds (Series 1996 A) Weekly VRDNs
(Miller Partnership L.P. Project)/(Royal Bank of Scotland PLC, Edinburgh LOC) 6,540,000
-----------------------------------------------------------------------------------
2,515,000 Huntingburg, IN, (Series 1994) Weekly VRDNs (DMI Furniture, Inc.)/ (Bank One,
Indianapolis, IN LOC) 2,515,000
-----------------------------------------------------------------------------------
2,545,000 Huntingburg, IN, EDRB (Series 1993) Weekly VRDNs (DMI Furniture, Inc.)/(Bank One,
Indianapolis, IN LOC) 2,545,000
-----------------------------------------------------------------------------------
$ 2,000,000 Indiana Development Finance Authority, (Series 1996) Weekly VRDNs (Meridian Group
LLC Project)/(Bank One, Indianapolis, IN LOC) $ 2,000,000
-----------------------------------------------------------------------------------
700,000 Indiana Economic Development Commission, (Series 1989) Weekly VRDNs (O'Neal Steel,
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) 700,000
-----------------------------------------------------------------------------------
2,805,000 Indianapolis, IN, (Series 1991) Weekly VRDNs (Cantor & Coleman II Project)/(Bank
One, Indianapolis, IN LOC) 2,805,000
-----------------------------------------------------------------------------------
3,500,000 Lawrence, IN, (Series 1996), 4.10% TOBs (Woodward Commons Project)/(FGIC INV),
Mandatory Tender 4/1/1997 3,500,000
-----------------------------------------------------------------------------------
1,995,000 Lebanon, IN IDA, (Series 1991) Weekly VRDNs (White Castle System)/ (Bank One,
Columbus, NA LOC) 1,995,000
-----------------------------------------------------------------------------------
2,700,000 Tippecanoe County, IN, Economic Development Revenue Weekly VRDNs (Lafayette
Venetian Blind)/(PNC Bank, Ohio, NA LOC) 2,700,000
-----------------------------------------------------------------------------------
3,555,000 Westfield, IN, IDR, (Series 1994) Weekly VRDNs (Standard Locknut & Lockwasher,
Inc.)/(Bank One, Indianapolis, IN LOC) 3,555,000
----------------------------------------------------------------------------------- --------------
Total 34,020,000
----------------------------------------------------------------------------------- --------------
IOWA--1.0%
-----------------------------------------------------------------------------------
3,325,000 Des Moines, IA, IDR Bonds (Series 1994) Weekly VRDNs (Printer, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) 3,325,000
-----------------------------------------------------------------------------------
2,330,000 Iowa Finance Authority, IDRB Weekly VRDNs (V-T Industries, Inc. Project)/(Norwest
Bank Minnesota, Minneapolis LOC) 2,330,000
----------------------------------------------------------------------------------- --------------
Total 5,655,000
----------------------------------------------------------------------------------- --------------
KANSAS--0.2%
-----------------------------------------------------------------------------------
1,315,000 Kansas City, KS, (Series OO), 3.80% BANs, 10/31/1997 1,315,000
----------------------------------------------------------------------------------- --------------
KENTUCKY--8.0%
-----------------------------------------------------------------------------------
110,000 Caldwell County, KY, (Series 1990) Weekly VRDNs (Thompson Steel Pipe)/(Corestates
Bank NA, Philadelphia, PA LOC) 110,000
-----------------------------------------------------------------------------------
3,805,000 Glasgow, KY, (Series 1994) Weekly VRDNs (Ply Tech Corp.)/(Bank One, Kentucky,
Louisville LOC) 3,805,000
-----------------------------------------------------------------------------------
$ 2,000,000 Henderson County, KY, (Series 1996A) Weekly VRDNs (Gibbs Die Casting
Corporation)/(Harris Trust & Savings Bank, Chicago LOC) $ 2,000,000
-----------------------------------------------------------------------------------
1,200,000 Jefferson County, KY, Weekly VRDNs (Gateway Press, Inc.)/(PNC Bank, Kentucky LOC) 1,200,000
-----------------------------------------------------------------------------------
1,700,000 Jefferson County, KY, IDR (Series 1991) Weekly VRDNs (Findley Adhesives)/(Bank One,
Columbus, NA LOC) 1,700,000
-----------------------------------------------------------------------------------
2,000,000 Jefferson County, KY, IDR Weekly VRDNs (O'Neal Steel, Inc.)/ (SouthTrust Bank of
Alabama, Birmingham LOC) 2,000,000
-----------------------------------------------------------------------------------
10,000,000 Kentucky Interlocal School Transportation Association, (Series A), 4.05% TRANs,
6/30/1997 10,000,000
-----------------------------------------------------------------------------------
12,700,000 Kentucky Pollution Abatement & Water Resource Finance Authority Daily VRDNs (Toyota
Motor Credit Corp.) 12,700,000
-----------------------------------------------------------------------------------
1,800,000 Kentucky Rural EDA, (Series 1990) Weekly VRDNs (Thompson Steel Pipe)/(NBD Bank,
Michigan LOC) 1,800,000
-----------------------------------------------------------------------------------
6,000,000 Scottsville, KY, 4.00% TOBs (Sumitomo Electric Wiring Systems)/ (Sumitomo Bank
Ltd., Osaka LOC), Optional Tender 5/1/1997 6,000,000
-----------------------------------------------------------------------------------
4,000,000 Winchester, KY, (Series 1990) Weekly VRDNs (Walle Corp.)/(Union Bank of
Switzerland, Zurich LOC) 4,000,000
----------------------------------------------------------------------------------- --------------
Total 45,315,000
----------------------------------------------------------------------------------- --------------
LOUISIANA--2.5%
-----------------------------------------------------------------------------------
8,000,000 Lake Charles, LA Harbor & Terminal District, Revenue Bonds (Series 1995A) Weekly
VRDNs (Polycom-Huntsman, Inc. Project)/(National City, Pennsylvania LOC) 8,000,000
-----------------------------------------------------------------------------------
3,500,000 Louisiana HFA, Single Family Mortgage Revenue Bonds (Series 1996D-4), 4.10% TOBs
(Trinity Funding Company INV), Mandatory Tender 9/15/1997 3,500,000
-----------------------------------------------------------------------------------
2,825,000 New Orleans, LA International Airport, (Series A), 8.875% Bonds (United States
Treasury PRF), 8/1/1997 (@102) 2,975,065
----------------------------------------------------------------------------------- --------------
Total 14,475,065
----------------------------------------------------------------------------------- --------------
MARYLAND--2.1%
-----------------------------------------------------------------------------------
$ 1,000,000 Baltimore County, MD IDA, (Series 1994A) Weekly VRDNs (Pitts Realty Limited
Partnership)/(PNC Bank, NA, Delaware LOC) $ 1,000,000
-----------------------------------------------------------------------------------
900,000 Baltimore County, MD, Revenue Bonds (1994 Issue) Weekly VRDNs (Direct Marketing
Associates, Inc. Facility)/(First National Bank of Maryland, Baltimore LOC) 900,000
-----------------------------------------------------------------------------------
645,000 Baltimore, MD, (Series 1988) Weekly VRDNs (Cherill Associated
Facility)/(Nationsbank, NA LOC) 645,000
-----------------------------------------------------------------------------------
4,500,000 Maryland State Community Development Administration, (Series 1990A) Weekly VRDNs
(College Estates)/(First National Bank of Maryland, Baltimore LOC) 4,500,000
-----------------------------------------------------------------------------------
2,800,000 Maryland State Community Development Administration, (Series 1990B) Weekly VRDNs
(Cherry Hill Apartment Ltd.)/(Nationsbank, NA LOC) 2,800,000
-----------------------------------------------------------------------------------
2,000,000 Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs (Field Container Co.
L.P.)/(Northern Trust Co., Chicago, IL LOC) 2,000,000
----------------------------------------------------------------------------------- --------------
Total 11,845,000
----------------------------------------------------------------------------------- --------------
MASSACHUSETTS--1.8%
-----------------------------------------------------------------------------------
2,545,000 Bridgewater, MA, (Series D), 4.25% RANs, 6/30/1997 2,547,831
-----------------------------------------------------------------------------------
7,500,000 Gardner, MA, 4.00% BANs, 4/1/1997 7,504,774
----------------------------------------------------------------------------------- --------------
Total 10,052,605
----------------------------------------------------------------------------------- --------------
MICHIGAN--1.2%
-----------------------------------------------------------------------------------
3,300,000 Michigan Strategic Fund Weekly VRDNs (Tesco Engineering)/(Bank of Tokyo-Mitsubishi
Ltd. LOC) 3,300,000
-----------------------------------------------------------------------------------
1,215,000 Michigan Strategic Fund, (Series 1991) Weekly VRDNs (AGA Gas, Inc.)/(Svenska
Handelsbanken, Stockholm LOC) 1,215,000
-----------------------------------------------------------------------------------
1,010,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly
VRDNs (Bear Lake Associates Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) 1,010,000
-----------------------------------------------------------------------------------
$ 1,200,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly
VRDNs (J.R. Automation Technologies Project)/(Old Kent Bank & Trust Co., Grand
Rapids LOC) $ 1,200,000
----------------------------------------------------------------------------------- --------------
Total 6,725,000
----------------------------------------------------------------------------------- --------------
MINNESOTA--2.8%
-----------------------------------------------------------------------------------
3,530,000 Coon Rapids, MN, (Series 1996) Weekly VRDNs (Medical Enterprise Associates
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 3,530,000
-----------------------------------------------------------------------------------
5,775,000 (a) Dakota County & Washington County MN Housing & Redevelopment Authority, (Series
J), 4.20% TOBs (United States Treasury COL)/(Corestates Bank NA, Philadelphia, PA
LIQ), Optional Tender 3/1/1997 5,775,000
-----------------------------------------------------------------------------------
700,000 Minnesota State Higher Education Coordinating Board, (Series 1992A) Weekly VRDNs
(First Bank NA, Minneapolis LIQ) 700,000
-----------------------------------------------------------------------------------
850,000 Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) 850,000
-----------------------------------------------------------------------------------
1,815,000 St. Paul, MN Port Authority Weekly VRDNs (H.M. Smyth Co., Inc.)/ (Norwest Bank
Minnesota, Minneapolis LOC) 1,815,000
-----------------------------------------------------------------------------------
3,100,000 White Bear, MN Weekly VRDNs (Thermoform Plastic, Inc.)/(Norwest Bank Minnesota,
Minneapolis LOC) 3,100,000
----------------------------------------------------------------------------------- --------------
Total 15,770,000
----------------------------------------------------------------------------------- --------------
MISSISSIPPI--2.2%
-----------------------------------------------------------------------------------
2,000,000 Mississippi Business Finance Corp. Weekly VRDNs (O'Neal Steel, Inc.)/(SouthTrust
Bank of Alabama, Birmingham LOC) 2,000,000
-----------------------------------------------------------------------------------
5,000,000 Mississippi Business Finance Corp., (Series 1995) Weekly VRDNs (Mississippi Baking
Company LLC Project)/(First National Bank of Maryland, Baltimore LOC) 5,000,000
-----------------------------------------------------------------------------------
2,600,000 Mississippi Business Finance Corp., IDRB (Series 1994) Weekly VRDNs (Flexsteel
Industries, Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) 2,600,000
-----------------------------------------------------------------------------------
$ 2,700,000 Olive Branch, MS, (Series 1986) Weekly VRDNs (United Healthcare of
Mississippi)/(First Union National Bank, Charlotte, NC LOC) $ 2,700,000
----------------------------------------------------------------------------------- --------------
Total 12,300,000
----------------------------------------------------------------------------------- --------------
MISSOURI--1.4%
-----------------------------------------------------------------------------------
2,550,000 Missouri Development Finance Board, Industrial Development Revenue Bonds (Series
1996) Weekly VRDNs (LaGrange Foundry, Inc. Project)/(Harris Trust & Savings Bank,
Chicago LOC) 2,550,000
-----------------------------------------------------------------------------------
900,000 Missouri Export & Infrastructure Board Weekly VRDNs (Ex-L-Tube, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) 900,000
-----------------------------------------------------------------------------------
4,250,000 Moberly, MO IDA, (Series 1996) Weekly VRDNs (Everlast Fitness Manufacturing
Corp.)/(Chase Manhattan Bank NA, New York LOC) 4,250,000
----------------------------------------------------------------------------------- --------------
Total 7,700,000
----------------------------------------------------------------------------------- --------------
MONTANA--0.8%
-----------------------------------------------------------------------------------
4,300,000 (a) Montana State Board of Housing, (Series F), 4.25% TOBs (FHA INS)/ (Corestates
Bank NA, Philadelphia, PA LIQ), Optional Tender 4/1/1997 4,300,000
----------------------------------------------------------------------------------- --------------
NEBRASKA--0.8%
-----------------------------------------------------------------------------------
4,800,000 Douglas County, NE, (Series 1991) Weekly VRDNs (Malhove, Inc.)/ (Norwest Bank
Minnesota, Minneapolis LOC) 4,800,000
----------------------------------------------------------------------------------- --------------
NEW HAMPSHIRE--5.5%
-----------------------------------------------------------------------------------
3,375,000 Nashua, NH, 4.50% BANs, 10/23/1997 3,396,724
-----------------------------------------------------------------------------------
7,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.80% CP (New
England Power Co.), Mandatory Tender 1/6/1997 7,000,000
-----------------------------------------------------------------------------------
8,850,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.80% CP (New
England Power Co.), Mandatory Tender 1/7/1997 8,850,000
-----------------------------------------------------------------------------------
8,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.80% CP (New
England Power Co.), Mandatory Tender 1/8/1997 8,000,000
-----------------------------------------------------------------------------------
2,000,000 New Hampshire Business Finance Authority, PCR Bonds (Series A), 3.80% CP (New
England Power Co.), Mandatory Tender 12/13/1996 2,000,000
-----------------------------------------------------------------------------------
$ 2,010,000 New Hampshire State IDA, (Series 1991), 4.05% TOBs (International Paper Co.),
Mandatory Tender 10/15/1997 $ 2,010,000
----------------------------------------------------------------------------------- --------------
Total 31,256,724
----------------------------------------------------------------------------------- --------------
NEW JERSEY--4.2%
-----------------------------------------------------------------------------------
3,000,000 High Bridge Borough, NJ, 4.50% BANs, 9/5/1997 3,010,975
-----------------------------------------------------------------------------------
1,490,875 Monroe Township, NJ, 3.75% BANs, 2/27/1997 1,491,740
-----------------------------------------------------------------------------------
1,800,000 Morristown, NJ, 3.80% TANs, 2/14/1997 1,800,000
-----------------------------------------------------------------------------------
8,360,000 New Jersey Housing & Mortgage Financing Authority, CDC Municipal Products Class A
Certificates (Series 1996B) Weekly VRDNs (MBIA INS)/(CDC Municipal Products, Inc.
LIQ) 8,360,000
-----------------------------------------------------------------------------------
9,000,000 Trenton, NJ, 4.25% BANs, 10/8/1997 9,018,378
----------------------------------------------------------------------------------- --------------
Total 23,681,093
----------------------------------------------------------------------------------- --------------
NEW MEXICO--1.6%
-----------------------------------------------------------------------------------
5,640,000 New Mexico Mortgage Finance Authority, (1996 Series F-2), 4.05% TOBs (Trinity
Funding Company INV), Mandatory Tender 8/28/1997 5,640,000
-----------------------------------------------------------------------------------
3,500,000 Santa Fe, NM, Single Family Mortgage Revenue Bonds (Series 1995B), 3.70% TOBs (FGIC
INV), Mandatory Tender 11/1/1997 3,500,000
----------------------------------------------------------------------------------- --------------
Total 9,140,000
----------------------------------------------------------------------------------- --------------
NORTH CAROLINA--2.4%
-----------------------------------------------------------------------------------
5,800,000 Bladen County, NC Industrial Facilities & Pollution Control Financing Authority,
(Series 1993) Weekly VRDNs (BCH Energy, Limited Partnership)/(Bank of
Tokyo-Mitsubishi Ltd. LOC) 5,800,000
-----------------------------------------------------------------------------------
7,600,000 Wilson County, NC PCA, (Series 1994) Weekly VRDNs (Granutec, Inc.)/(Branch Banking
& Trust Co, Wilson LOC) 7,600,000
----------------------------------------------------------------------------------- --------------
Total 13,400,000
----------------------------------------------------------------------------------- --------------
OHIO--0.7%
-----------------------------------------------------------------------------------
100,000 Defiance County, OH, IDR Weekly VRDNs (Dietrich Industries, Inc.)/ (PNC Bank, NA
LOC) 100,000
-----------------------------------------------------------------------------------
$ 4,000,000 Lorain Port Authority, OH, IDRB (Series 1996) Weekly VRDNs (Brush Wellman,
Inc.)/(National City Bank, Cleveland, OH LOC) $ 4,000,000
----------------------------------------------------------------------------------- --------------
Total 4,100,000
----------------------------------------------------------------------------------- --------------
OKLAHOMA--2.7%
-----------------------------------------------------------------------------------
2,300,000 Adair County, OK IDA, (Series B) Weekly VRDNs (Baldor Electric Co.)/(Wachovia Bank
of NC, NA, Winston-Salem LOC) 2,300,000
-----------------------------------------------------------------------------------
5,100,000 Oklahoma Development Finance Authority, 3.90% TOBs (Simmons Poultry
Farms)/(Rabobank Nederland, Utrecht LOC), Optional Tender 2/1/1997 5,100,000
-----------------------------------------------------------------------------------
8,000,000 Tulsa County, OK HFA, CDC Municipal Products, Inc. Class A Certificates (Series
1996E) Weekly VRDNs (CDC Municipal Products, Inc. LIQ) 8,000,000
----------------------------------------------------------------------------------- --------------
Total 15,400,000
----------------------------------------------------------------------------------- --------------
PENNSYLVANIA--6.0%
-----------------------------------------------------------------------------------
5,700,000 Carbon County, PA IDA, Solid Waste Disposal Revenue Notes (Series 1995B), 3.90%
RANs (Horsehead Resource Development, Inc.)/(Chase Manhattan Bank NA, New York
LOC), 12/3/1996 5,700,000
-----------------------------------------------------------------------------------
5,450,000 Clinton County, PA IDA, Solid Waste Disposal Revenue Bonds (Series 1992A), 3.80%
TOBs (International Paper Co.), Optional Tender
1/15/1997 5,450,000
-----------------------------------------------------------------------------------
2,075,000 Pennsylvania EDFA Weekly VRDNs (Stone and Lime Co.)/(PNC Bank, NA LOC) 2,075,000
-----------------------------------------------------------------------------------
600,000 Pennsylvania EDFA Weekly VRDNs (Tamaqua Cable Company)/(PNC Bank, NA LOC) 600,000
-----------------------------------------------------------------------------------
4,300,000 Pennsylvania EDFA Weekly VRDNs (Walnut And Craig)/(PNC Bank, NA LOC) 4,300,000
-----------------------------------------------------------------------------------
1,000,000 Pennsylvania EDFA, (1995 Series D2) Weekly VRDNs (ARCO Enterprises, Inc./Ronald L.
Repasky, Sr. Project)/(PNC Bank, NA LOC) 1,000,000
-----------------------------------------------------------------------------------
1,200,000 Pennsylvania EDFA, (1995 Series D9) Weekly VRDNs (North American Communications,
Inc. Project)/(PNC Bank, NA LOC) 1,200,000
-----------------------------------------------------------------------------------
$ 2,750,000 Venango, PA IDA, (Series A), 3.70% CP (Scrubgrass Power Corp.)/ (National
Westminster Bank, PLC, London LOC), Mandatory Tender 1/28/1997 $ 2,750,000
-----------------------------------------------------------------------------------
10,700,000 Washington County, PA IDA, Solid Waste Disposal Revenue Bonds (Series 1995) Weekly
VRDNs (American Iron Oxide Company Project)/ (Bank of Tokyo-Mitsubishi Ltd. LOC) 10,700,000
----------------------------------------------------------------------------------- --------------
Total 33,775,000
----------------------------------------------------------------------------------- --------------
RHODE ISLAND--0.8%
-----------------------------------------------------------------------------------
4,600,000 Rhode Island Housing & Mortgage Finance Corp, (Series 19-D), 3.55% TOBs (Societe
Generale, Paris INV), Mandatory Tender 1/30/1997 4,600,000
----------------------------------------------------------------------------------- --------------
SOUTH CAROLINA--2.2%
-----------------------------------------------------------------------------------
4,000,000 Georgetown County, SC, Pollution Control Facilities Adjustable Rate Bonds (Series
A), 4.00% TOBs (International Paper Co.), Optional Tender 9/1/1997 4,000,000
-----------------------------------------------------------------------------------
5,500,000 South Carolina Job Development Authority, (Series 1996) Weekly VRDNs (PVC Container
Corp. Project)/(Fleet Bank. NA LOC) 5,500,000
-----------------------------------------------------------------------------------
2,685,000 South Carolina Job Development Authority, EDRB (Series 1994) Weekly VRDNs (Carolina
Cotton Works, Inc. Project)/(Branch Banking & Trust Co, Wilson LOC) 2,685,000
----------------------------------------------------------------------------------- --------------
Total 12,185,000
----------------------------------------------------------------------------------- --------------
SOUTH DAKOTA--1.6%
-----------------------------------------------------------------------------------
9,000,000 South Dakota Housing Development Authority, (Series 1996E), 3.75% TOBs, Mandatory
Tender 11/13/1997 9,000,000
----------------------------------------------------------------------------------- --------------
TENNESSEE--3.6%
-----------------------------------------------------------------------------------
1,000,000 Benton County TN IDB, (Series 1996) Weekly VRDNs (Jones Plastic and Engineering
Corp.)/(National City Bank, Kentucky LOC) 1,000,000
-----------------------------------------------------------------------------------
800,000 Cocke County, TN IDB, (Series 1988) Weekly VRDNs (GLI, Inc.)/(Great Lakes Chemical
Corp. GTD) 800,000
-----------------------------------------------------------------------------------
$ 1,700,000 Greenfield, TN IDB, IDRB (Series 1995) Weekly VRDNs (Plastic Products Company
Project)/(Norwest Bank Minnesota, Minneapolis LOC) $ 1,700,000
-----------------------------------------------------------------------------------
1,100,000 Hawkins County, TN IDB, (Series 1995) Weekly VRDNs (Sekisui Ta Industries, Inc.
Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 1,100,000
-----------------------------------------------------------------------------------
2,000,000 Jackson, TN IDB , Solid Waste Facility Bonds (Series 1995) Weekly VRDNs (Florida
Steel Corp.)/(NationsBank, South LOC) 2,000,000
-----------------------------------------------------------------------------------
3,500,000 McMinn County, TN IDB, Industrial Development Bonds (Series 1995) Weekly VRDNs
(Creative Fabrication Corp.)/(NBD Bank, Michigan LOC) 3,500,000
-----------------------------------------------------------------------------------
3,800,000 Oak Ridge, TN IDB, Solid Waste Facility Bonds (Series 1996) Weekly VRDNs (M4
Environmental L.P. Project)/(SunTrust Bank, Atlanta LOC) 3,800,000
-----------------------------------------------------------------------------------
6,700,000 Shelby County, TN Health Education & Housing Facilities Board, 4.05% TOBs
(Methodist Health System, Inc.)/(MBIA INS)/(Sanwa Bank Ltd, Osaka LIQ), Optional
Tender 8/1/1997 6,700,000
----------------------------------------------------------------------------------- --------------
Total 20,600,000
----------------------------------------------------------------------------------- --------------
TEXAS--6.9%
-----------------------------------------------------------------------------------
2,000,000 Angelina and Neches River Authority, Texas, Solid Waste Disposal Revenue Bonds
(Series 1993), 3.80% CP (Temple-Eastex, Inc. Project)/ (Temple-Inland, Inc. GTD),
Mandatory Tender 12/13/1996 2,000,000
-----------------------------------------------------------------------------------
9,100,000 Angelina and Neches River Authority, Texas, Solid Waste Disposal Revenue Bonds
(Series 1993), 3.85% CP (Temple-Eastex, Inc. Project)/ (Temple-Inland, Inc. GTD),
Mandatory Tender 1/27/1997 9,100,000
-----------------------------------------------------------------------------------
3,600,000 Brazos Harbor, TX Industrial Development Corporation, (Series 1991) Weekly VRDNs
(Rangen, Inc. Project)/(Norwest Bank Minnesota, Minneapolis LOC) 3,600,000
-----------------------------------------------------------------------------------
10,800,000 Brazos River Authority, TX, (Series 1995B) Daily VRDNs (Texas Utilities Electric
Co.)/(Union Bank of Switzerland, Zurich LOC) 10,800,000
-----------------------------------------------------------------------------------
$ 5,000,000 San Antonio, TX, Special Facilities Airport Revenue Bonds (Series 1995) Weekly
VRDNs (Cessna Aircraft Company Project)/(Nationsbank of Texas, NA LOC) $ 5,000,000
-----------------------------------------------------------------------------------
5,000,000 Tyler, TX Health Facilities Development Corp., (Series 1993C), 3.75% CP (East Texas
Medical Center)/(Banque Paribas, Paris LOC), Mandatory Tender 2/11/1997 5,000,000
-----------------------------------------------------------------------------------
2,100,000 Tyler, TX Health Facilities Development Corp., (Series 1993C), 4.05% CP (East Texas
Medical Center)/(Banque Paribas, Paris LOC), Mandatory Tender 12/6/1996 2,100,000
-----------------------------------------------------------------------------------
1,300,000 Tyler, TX Health Facilities Development Corp., (Series 1993C), 4.10% CP (East Texas
Medical Center)/(Banque Paribas, Paris LOC), Mandatory Tender 12/6/1996 1,300,000
----------------------------------------------------------------------------------- --------------
Total 38,900,000
----------------------------------------------------------------------------------- --------------
UTAH--0.8%
-----------------------------------------------------------------------------------
1,160,000 Utah State HFA, (Series A), 4.125% TOBs (Corestates Bank NA, Philadelphia, PA LIQ),
Optional Tender 1/1/1997 1,160,000
-----------------------------------------------------------------------------------
1,700,000 Utah State HFA, (Series C-2), 4.125% TOBs (Corestates Bank NA, Philadelphia, PA
LIQ), Optional Tender 1/1/1997 1,700,000
-----------------------------------------------------------------------------------
1,670,000 Utah State HFA, (Series C-3), 4.125% TOBs (Corestates Bank NA, Philadelphia, PA
LIQ), Optional Tender 1/1/1997 1,670,000
----------------------------------------------------------------------------------- --------------
Total 4,530,000
----------------------------------------------------------------------------------- --------------
VIRGINIA--1.8%
-----------------------------------------------------------------------------------
2,500,000 Alexandria, VA Redevelopment and Housing Authority Weekly VRDNs (Crystal City
Apartments)/(Safeco Insurance Co. of America INS)/(Barclays Bank PLC, London LIQ) 2,500,000
-----------------------------------------------------------------------------------
2,000,000 Campbell County, VA IDA, Solid Waste Disposal Facilities Revenue ACES Weekly VRDNs
(Georgia-Pacific Corp.)/(Industrial Bank of Japan Ltd., Tokyo LOC) 2,000,000
-----------------------------------------------------------------------------------
1,600,000 Franklin County, VA IDA Weekly VRDNs (American Graphics)/ (Nationsbank, NA LOC) 1,600,000
-----------------------------------------------------------------------------------
$ 1,500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-3) Weekly VRDNs
(Richmond, VA Red Tobacco Row)/(Westdeutsche Landesbank Girozentrale LOC) $ 1,500,000
-----------------------------------------------------------------------------------
1,000,000 Richmond, VA Redevelopment & Housing Authority, (Series B-5) Weekly VRDNs
(Richmond, VA Red Tobacco Row)/(Westdeutsche Landesbank Girozentrale LOC) 1,000,000
-----------------------------------------------------------------------------------
1,500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-9) Weekly VRDNs
(Richmond, VA Red Tobacco Row)/(Westdeutsche Landesbank Girozentrale LOC) 1,500,000
----------------------------------------------------------------------------------- --------------
Total 10,100,000
----------------------------------------------------------------------------------- --------------
WASHINGTON--0.6%
-----------------------------------------------------------------------------------
3,500,000 Pierce County, WA Economic Development Corp., (Series 1995) Weekly VRDNs
(Simpson-Tacoma Kraft Company Project)/(Seattle-First Bank, Seattle LOC) 3,500,000
----------------------------------------------------------------------------------- --------------
WISCONSIN--3.0%
-----------------------------------------------------------------------------------
2,550,000 Germantown, WI, IDA Weekly VRDNs (Zenith Sintered Products, Inc.)/(Bank One,
Milwaukee, WI NA LOC) 2,550,000
-----------------------------------------------------------------------------------
2,310,000 Marshfield, WI, IDR (Series 1993) Weekly VRDNs (Building Systems, Inc.)/(Bank One,
Milwaukee, WI NA LOC) 2,310,000
-----------------------------------------------------------------------------------
1,670,000 Plover, WI Weekly VRDNs (Sirco Manufacturing, Inc.)/(Norwest Bank Minnesota,
Minneapolis LOC) 1,670,000
-----------------------------------------------------------------------------------
3,500,000 Prentice Village, WI, Limited Obligation Revenue Refunding Bonds (Series A) Weekly
VRDNs (Biewer-Wisconsin Sawmill, Inc. Project)/ (Michigan National Bank, Farmington
Hills LOC) 3,500,000
-----------------------------------------------------------------------------------
900,000 Shell Lake, WI Weekly VRDNs (Doboy Packaging)/(Union Bank of Switzerland, Zurich
LOC) 900,000
-----------------------------------------------------------------------------------
1,980,000 Waukesha, WI, IDRB (Series 1995) Weekly VRDNs (Weldall Manufacturing, Inc.
Project)/(Bank One, Milwaukee, WI NA LOC) 1,980,000
-----------------------------------------------------------------------------------
$ 3,930,000 (a) Wisconsin Housing & Economic Development Authority, (Series B), 4.20% TOBs (FSA
INS)/(Corestates Bank NA, Philadelphia, PA LIQ), Optional Tender 3/1/1997 $ 3,930,000
----------------------------------------------------------------------------------- --------------
Total 16,840,000
----------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 565,562,173
----------------------------------------------------------------------------------- --------------
</TABLE>
At November 30, 1996, 87.5% of the total investments at market value were
subject to alternative minimum tax.
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At November 30, 1996, these securities
amounted to $14,005,000 which represents 2.5% of net assets.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($565,415,536) at November 30, 1996.
The following acronyms are used throughout this portfolio:
ACES-- Adjustable Convertible Extendable Securities
BANs-- Bond Anticipation Notes
COL-- Collateralized
CP-- Commercial Paper
EDA-- Economic Development Authority
EDFA-- Economic Development Financing Authority
EDRB-- Economic Development Revenue Bonds
FGIC-- Financial Guaranty Insurance Company
FHA-- Federal Housing Administration
FSA-- Financial Security Assurance
GNMA-- Government National Mortgage Association
GTD-- Guaranty
HFA-- Housing Finance Authority
IDA-- Industrial Development Authority
IDB-- Industrial Development Bond
IDR-- Industrial Development Revenue
IDRB-- Industrial Development Revenue Bond
INS-- Insured
INV-- Investment Agreement
LIQ-- Liquidity Agreement
LLC-- Limited Liability Corporation
LOC-- Letter of Credit
MBIA-- Municipal Bond Investors Assurance
PCA-- Pollution Control Authority
PCR-- Pollution Control Revenue
PLC-- Public Limited Company
PRF-- Prerefunded
RANs-- Revenue Anticipation Notes
TANs-- Tax Anticipation Notes
TOBs-- Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 565,562,173
- -------------------------------------------------------------------------------------------------
Cash 831,990
- -------------------------------------------------------------------------------------------------
Income receivable 3,858,457
- ------------------------------------------------------------------------------------------------- --------------
Total assets 570,252,620
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 3,700,000
- -----------------------------------------------------------------------------------
Income distribution payable 860,304
- -----------------------------------------------------------------------------------
Accrued expenses 276,780
- ----------------------------------------------------------------------------------- ------------
Total liabilities 4,837,084
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 565,415,536 shares outstanding $ 565,415,536
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$565,415,536 / 565,415,536 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 10,087,763
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 1,359,179
- -------------------------------------------------------------------------------------
Administrative personnel and services fee 205,488
- -------------------------------------------------------------------------------------
Custodian fees 39,688
- -------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 248,186
- -------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,928
- -------------------------------------------------------------------------------------
Auditing fees 6,954
- -------------------------------------------------------------------------------------
Legal fees 1,464
- -------------------------------------------------------------------------------------
Portfolio accounting fees 51,649
- -------------------------------------------------------------------------------------
Distribution services fee 951,426
- -------------------------------------------------------------------------------------
Shareholder services fee 679,590
- -------------------------------------------------------------------------------------
Share registration costs 23,424
- -------------------------------------------------------------------------------------
Printing and postage 16,104
- -------------------------------------------------------------------------------------
Insurance premiums 4,575
- -------------------------------------------------------------------------------------
Taxes 32,025
- -------------------------------------------------------------------------------------
Miscellaneous 2,928
- ------------------------------------------------------------------------------------- ------------
Total expenses 3,625,608
- -------------------------------------------------------------------------------------
Waivers
- ------------------------------------------------------------------------
Waiver of investment advisory fee $ (242,882)
- ------------------------------------------------------------------------
Waiver of distribution services fee (679,590)
- ------------------------------------------------------------------------ -----------
Total waivers (922,472)
- ------------------------------------------------------------------------------------- ------------
Net expenses 2,703,136
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 7,384,627
- --------------------------------------------------------------------------------------------------- -------------
</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, 1996 MAY 31, 1996
---------------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------
Net investment income $ 7,384,627 $ 14,810,386
- ---------------------------------------------------------------------- ---------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------
Distributions from net investment income (7,384,627) (14,810,386)
- ---------------------------------------------------------------------- ---------------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------
Proceeds from sale of shares 1,132,496,890 2,133,541,489
- ----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 6,381,568 13,828,571
- ----------------------------------------------------------------------
Cost of shares redeemed (1,052,067,473) (2,113,929,309)
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets resulting from share transactions 86,810,985 33,440,751
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets 86,810,985 33,440,751
- ----------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------
Beginning of period 478,604,551 445,163,800
- ---------------------------------------------------------------------- ---------------------- -----------------
End of period $ 565,415,536 $ 478,604,551
- ---------------------------------------------------------------------- ---------------------- -----------------
</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, -----------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992 1991 1990(A)
- -------------------------------- ------------ --------- --------- --------- --------- --------- --------- -----------
<S> <C> <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 $ 1.00
- --------------------------------
INCOME FROM INVESTMENT
OPERATIONS
- --------------------------------
Net investment income 0.01 0.03 0.03 0.02 0.03 0.04 0.05 0.04
- --------------------------------
LESS DISTRIBUTIONS
- --------------------------------
Distributions from net
investment income (0.01) (0.03) (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 $ 1.00
- -------------------------------- --------- --------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.38% 3.04% 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% 0.99% 0.98% 0.94% 0.73%*
- --------------------------------
Net investment income 2.72%* 2.99% 2.76% 1.81% 2.10% 3.42% 5.02% 5.76%*
- --------------------------------
Expense waiver/
reimbursement (c) 0.34%* 0.33% 0.05% 0.06% 0.03% 0.03% 0.17% 0.45%*
- --------------------------------
SUPPLEMENTAL DATA
- --------------------------------
Net assets, end of period
(000 omitted) $565,416 $478,605 $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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Corporation consists of four portfolios. 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. The investment objective of the Fund
is current income exempt from federal regular income tax consistent with
stability of principal.
(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's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the 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 "Directors"). 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 Act.
Additional information on each restricted security held at November 30,
1996 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
------------------------------------ ---------------- ----------------
<S> <C> <C>
Dakota County & Washington County MN 10/03/1996 $ 5,775,000
Montana State Board of Housing 10/01/1996 4,300,000
Wisconsin Housing & Economic
Development Authority 08/29/1996 3,930,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1996, there were 12,500,000,000 shares ($0.001 par value per
share) authorized. At November 30, 1996, capital paid in aggregated
$565,415,536. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
- ----------------------------------------------------------------------- ---------------------- ----------------
<S> <C> <C>
Shares sold 1,132,496,890 2,133,541,489
- -----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 6,381,568 13,828,571
- -----------------------------------------------------------------------
Shares redeemed (1,052,067,473) (2,113,929,309)
- ----------------------------------------------------------------------- ---------------------- ----------------
Net change resulting from share transactions 86,810,985 33,440,751
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.50% 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("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 0.35% of the average daily net assets of the Fund shares,
annually, to compensate 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 0.25%
of the average daily net assets of the Fund for the period. The fee paid to FSS
is used to finance certain services for shareholders and to maintain shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC"), serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended November 30, 1996, the
Corporation 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 $982,744,649 and $894,020,770, respectively.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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, Treasurer and Secretary
John E. Murray, Jr. S. Elliott Cohan
Wesley W. Posvar Assistant Secretary
Marjorie P. Smuts
</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, 1996
LOGO OF FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 147551303
0122605 (1/97)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I'm pleased to present the Semi-Annual Report to Shareholders for Prime Cash
Series, a portfolio of Cash Trust Series, Inc., which covers the six-month
period ended November 30, 1996. 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, the fund helped its shareholders earn a total of
$0.02 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
net assets soar from $1.5 billion on the first day of the period to $2.2 billion
at the period's end.
At the end of the reporting period, the fund was invested across a high-quality
portfolio of money market securities that included commercial paper (48.5%),
variable rate notes (26.5%), repurchase agreements (17.4%), short-term notes
(3.4%), a time deposit (2.3%), certificates of deposit (1.0%), and a U.S.
Treasury note (0.8%).
Thank you for choosing Prime Cash Series as a convenient way to put your cash to
work pursuing daily income. Please contact your investment representative if you
have any questions about the fund.
Sincerely,
/s/Richard B. Fisher
Richard B. Fisher
President
January 15, 1997
* 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Prime Cash Series invests in money market instruments maturing in thirteen
months or less. The average maturity of these securities, computed on a
dollar-weighted basis, is restricted to 90 days or less. Portfolio securities
must be rated in one of the two highest short-term rating categories by one or
more of the nationally recognized statistical rating organizations or be of
comparable quality to securities having such ratings. Typical security types
include, but are not limited to, commercial paper, certificates of deposit, time
deposits, variable rate instruments and repurchase agreements.
U.S. economic growth has slowed in a nearly ideal fashion. Labor markets are
still tight, but monthly payroll gains have downshifted from 233,000 per month
in the first half of the year to 171,000 over the second half. Home building has
slowed as well. Offsetting this consumer slowdown, however, manufacturing is
strengthening. The National Association of Purchasing Managers Index has
increased to 52.7% for November while industrial production and capacity
utilization have also been high. While the economy remains mixed, overall it
appears to be advancing at a moderate and sustainable pace.
The lingering concern is that tight labor markets and gently rising wage
pressures will prove inflationary. To date, however, price pressures have been
evident only in the food and energy sectors. Elsewhere in the economy,
systematic price pressures are largely absent. The Consumer Price Index has
risen at an annualized rate of just 2.4% over the past six months while the
Producer Price Index increased by 2.8% for the same period.
Thirty day commercial paper started the period at 5.30% on June 1, 1996, and
rose very modestly to end the period at 5.37%. This lack of movement reflects
the 5.25% federal funds target maintained by the Federal Reserve Board for the
entire six month time period.
The money market yield curve flattened substantially throughout the time period.
One month commercial paper rates rose seven basis points while the six month
rates dropped 11 basis points reflecting the complacent market attitude toward
slow growth and low inflation.
The target average maturity range for Prime Cash Series began the reporting
period at 40-50 days and was shortened to the 35-45 day range in July,
reflecting the changing economic and monetary sentiment. In structuring the
fund, there is continued emphasis placed on positioning 30-35% of the fund's
core assets in variable rate demand notes and accomplishing a modest barbell
structure.
During the six months ended November 30, 1996, the net assets of Prime Cash
Series increased from $1.5 billion to $2.2 billion while the seven-day net yield
increased from 4.42% to 4.54%.* The effective average maturity of the fund on
November 30, 1996, was 47 days.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
2
PRIME CASH SERIES
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -------------- ------------------------------------------------------------------------------ ----------------
<C> <S> <C>
CERTIFICATE OF DEPOSIT--1.0%
- ----------------------------------------------------------------------------------------------
BANKING--1.0%
------------------------------------------------------------------------------
$ 12,000,000 Mellon Bank NA, Pittsburgh, 5.500%-5.680%, 12/10/1996-
4/9/1997 $ 12,000,000
------------------------------------------------------------------------------
10,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska Handelsbanken, Stockholm),
5.430%, 5/5/1997 10,000,741
------------------------------------------------------------------------------ ----------------
TOTAL CERTIFICATE OF DEPOSIT 22,000,741
------------------------------------------------------------------------------ ----------------
(A) COMMERCIAL PAPER--48.5%
- ----------------------------------------------------------------------------------------------
BANKING--14.4%
------------------------------------------------------------------------------
22,000,000 ABN AMRO Bank N.V., Amsterdam, 5.594%-5.794%, 2/28/1997-3/ 6/1997 21,697,084
------------------------------------------------------------------------------
40,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank PLC, London),
5.488%-5.645%, 12/3/1996-4/24/1997 39,594,283
------------------------------------------------------------------------------
15,000,000 Bank of Nova Scotia, Toronto, 5.510%, 1/6/1997 14,918,550
------------------------------------------------------------------------------
15,000,000 Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank AG, Frankfurt),
5.774%, 1/10/1997 14,906,500
------------------------------------------------------------------------------
37,995,000 National Australia Funding, Inc., (Guaranteed by National Australia Bank,
Ltd., Melbourne), 5.540%-5.753%, 1/29/1997-
2/3/1997 37,637,236
------------------------------------------------------------------------------
18,000,000 PEMEX Capital, Inc., (Swiss Bank Corp., Basle LOC), 5.497%,
4/21/1997 17,622,825
------------------------------------------------------------------------------
25,000,000 Societe Generale North America, Inc., (Guaranteed by Societe Generale, Paris),
5.500%-5.620%, 3/27/1997-4/9/1997 24,536,182
------------------------------------------------------------------------------
64,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska Handelsbanken, Stockholm),
5.467%-5.753%, 1/30/1997-4/30/1997 63,029,831
------------------------------------------------------------------------------
70,000,000 UBS Finance (Delaware), Inc., (Guaranteed by Union Bank of Switzerland,
Zurich), 5.374%-5.903%, 12/2/1996 69,988,822
------------------------------------------------------------------------------
15,000,000 Westpac Capital Corp., (Guaranteed by Westpac Banking, Corp., Sydney), 5.783%,
1/17/1997 14,889,942
------------------------------------------------------------------------------ ----------------
Total 318,821,255
------------------------------------------------------------------------------ ----------------
BROKERAGE--0.5%
------------------------------------------------------------------------------
12,000,000 Merrill Lynch & Co., Inc., 5.371%, 2/11/1997 11,872,800
------------------------------------------------------------------------------ ----------------
ELECTRICAL EQUIPMENT--4.0%
------------------------------------------------------------------------------
89,000,000 Whirlpool Financial Corp., (Whirlpool Corp. Support Agreement), 5.443%-5.476%,
12/16/1996-2/25/1997 88,219,975
------------------------------------------------------------------------------ ----------------
FINANCE-AUTOMOTIVE--4.2%
------------------------------------------------------------------------------
94,000,000 General Motors Acceptance Corp., 5.453%-5.817%, 12/4/1996-
5/23/1997 92,855,645
------------------------------------------------------------------------------ ----------------
FINANCE-COMMERCIAL--18.5%
------------------------------------------------------------------------------
55,000,000 Asset Securitization Cooperative Corp., 5.359%-5.501%, 12/13/ 1996-2/27/1997 54,496,153
------------------------------------------------------------------------------
106,000,000 Beta Finance, Inc., 5.373%-5.789%, 12/30/1996-5/27/1997 104,598,064
------------------------------------------------------------------------------
10,000,000 CIT Group Holdings, Inc., 5.427%, 12/30/1996 9,956,903
------------------------------------------------------------------------------
21,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.542%-5.783%,
1/15/1997-3/6/1997 20,775,741
------------------------------------------------------------------------------
10,000,000 CXC, Inc., 5.387%, 2/12/1997 9,892,325
------------------------------------------------------------------------------
29,150,000 Falcon Asset Securitization Corp., 5.372%-5.750%, 1/13/1997-
2/24/1997 28,880,921
------------------------------------------------------------------------------
61,000,000 General Electric Capital Services, 5.410%-5.784%, 1/13/1997-
5/23/1997 59,960,967
------------------------------------------------------------------------------
49,742,000 Greenwich Funding Corp., 5.378%-5.524%, 12/9/1996-2/26/1997 49,412,820
------------------------------------------------------------------------------
73,025,000 PREFCO-Preferred Receivables Funding Co., 5.372%-5.785%,
12/5/1996-4/29/1997 72,235,776
------------------------------------------------------------------------------ ----------------
Total 410,209,670
------------------------------------------------------------------------------ ----------------
FINANCE-RETAIL--4.3%
------------------------------------------------------------------------------
12,000,000 American Express Credit Corp., 5.421%, 5/23/1997 11,695,520
------------------------------------------------------------------------------
4,200,000 Associates Corp. of North America, 5.703%, 12/2/1996 4,199,335
------------------------------------------------------------------------------
7,000,000 Avco Financial Services, Inc., 5.784%, 3/5/1997 6,897,279
------------------------------------------------------------------------------
42,000,000 McKenna Triangle National Corp., 5.365%-5.530%, 1/22/1997-
2/21/1997 41,558,823
------------------------------------------------------------------------------
22,000,000 New Center Asset Trust, A1+/P1 Series, 5.486%-5.601%, 2/21/ 1997-4/21/1997 21,624,881
------------------------------------------------------------------------------
10,000,000 Norwest Financial, Inc., 5.488%, 1/6/1997 9,945,900
------------------------------------------------------------------------------ ----------------
Total 95,921,738
------------------------------------------------------------------------------ ----------------
INSURANCE--0.2%
------------------------------------------------------------------------------
5,000,000 Marsh & McLennan Cos., Inc., 5.793%, 1/10/1997 4,968,722
------------------------------------------------------------------------------
OIL & OIL FINANCE--1.3%
------------------------------------------------------------------------------
10,000,000 Chevron U.K. Investment PLC, (Guaranteed by Chevron Corp.), 5.377%, 2/18/1997 9,883,694
------------------------------------------------------------------------------
20,000,000 Koch Industries, Inc., 5.374%, 12/2/1996 19,997,017
------------------------------------------------------------------------------ ----------------
Total 29,880,711
------------------------------------------------------------------------------ ----------------
PHARMACEUTICALS AND HEALTH CARE--0.6%
------------------------------------------------------------------------------
13,000,000 Glaxo Wellcome PLC, 5.373%, 2/25/1997 12,835,406
------------------------------------------------------------------------------ ----------------
TELECOMMUNICATIONS--0.5%
------------------------------------------------------------------------------
10,000,000 Ameritech Capital Funding Corp., (Guaranteed by Ameritech Corp.), 5.671%,
12/2/1996 9,998,458
------------------------------------------------------------------------------ ----------------
TOTAL COMMERCIAL PAPER 1,075,584,380
------------------------------------------------------------------------------ ----------------
SHORT-TERM NOTES--3.4%
- ----------------------------------------------------------------------------------------------
BANKING--1.1%
------------------------------------------------------------------------------
5,000,000 Mercantile Safe Deposit & Trust Co., Baltimore, 6.000%, 2/25/1997 5,008,529
------------------------------------------------------------------------------
20,000,000 SALTS III Cayman Island Corp., (Bankers Trust International, PLC Swap
Agreement), 5.681%, 1/23/1997 20,000,000
------------------------------------------------------------------------------ ----------------
Total 25,008,529
------------------------------------------------------------------------------ ----------------
FINANCE-EQUIPMENT--2.0%
------------------------------------------------------------------------------
30,512,272 Capita Equipment Receivables Trust 1996-1, 5.600%, 10/15/1997 30,512,272
------------------------------------------------------------------------------
13,818,064 Navistar Financial 1996-B Owner Trust, 5.490%, 11/20/1997 13,818,064
------------------------------------------------------------------------------ ----------------
Total 44,330,336
------------------------------------------------------------------------------ ----------------
FOOD & BEVERAGE--0.3%
------------------------------------------------------------------------------
7,000,000 PepsiCo, Inc., 6.875%, 5/15/1997 7,033,912
------------------------------------------------------------------------------ ----------------
TOTAL CORPORATE NOTES 76,372,777
------------------------------------------------------------------------------ ----------------
(B) NOTES-VARIABLE--26.5%
- ----------------------------------------------------------------------------------------------
BANKING--17.8%
------------------------------------------------------------------------------
8,500,000 Alabama State IDA, (GMC Projects), Tax Revenue Bonds (Series 1994), (General
Motors Corp. LOC), 5.435%, 12/5/1996 8,500,000
------------------------------------------------------------------------------
2,002,500 Alabama State IDA, (Nichols Research Corp.), (SouthTrust Bank of Alabama,
Birmingham LOC), 5.500%, 12/4/1996 2,002,500
------------------------------------------------------------------------------
1,975,000 Athens-Clarke County, GA IDA, Barrett Project (Series 1995), (Columbus Bank
and Trust Co., GA LOC), 5.435%, 12/5/1996 1,975,000
------------------------------------------------------------------------------
4,885,000 Aurora City, IL, (Series 1995), (First of America Bank-Illinois LOC), 5.630%,
12/5/1996 4,885,000
------------------------------------------------------------------------------
20,000,000 Australia & New Zealand Banking Group, Melbourne, 5.426%,
12/2/1996 19,993,421
------------------------------------------------------------------------------
1,025,000 Avalon Hotel Associates, (Corestates Bank N.A., Philadelphia, PA LOC), 5.510%,
12/5/1996 1,025,000
------------------------------------------------------------------------------
45,000,000 Bank One, Columbus, N.A., 5.470%, 12/3/1996 44,974,908
------------------------------------------------------------------------------
20,000,000 Bank One, Milwaukee, WI N.A., 5.490%, 12/3/1996 19,987,538
------------------------------------------------------------------------------
13,180,000 Congregate Care Corp., (Union Bank of California LOC), 5.625%, 12/4/1996 13,180,000
------------------------------------------------------------------------------
1,480,000 Denver Urban Renewal Authority, (Series 1992-B), (Banque Paribas, Paris LOC),
5.700%, 12/5/1996 1,480,000
------------------------------------------------------------------------------
6,300,000 Dewberry III, L.P., (First National Bank of Maryland, Baltimore LOC), 5.600%,
12/5/1996 6,300,000
------------------------------------------------------------------------------
7,500,000 Euclid Superior Parking, (KeyBank, N.A. LOC), 5.475%, 12/16/ 1996 7,500,000
------------------------------------------------------------------------------
2,510,000 Gahanna OH, City of, Franklin Steel Co Project, (Star Bank, NA, Cincinnati
LOC), 5.435%, 12/5/1996 2,510,000
------------------------------------------------------------------------------
11,400,000 HJH Associates of Alabama, Hilton Hotel, Huntsville, (SouthTrust Bank of
Alabama, Birmingham LOC), 5.435%, 12/6/1996 11,400,000
------------------------------------------------------------------------------
5,400,000 Kenny, Donald R. and Cheryl A., Series 1996-C, (Star Bank, NA, Cincinnati
LOC), 5.435%, 12/5/1996 5,400,000
------------------------------------------------------------------------------
51,000,000 Liquid Asset Backed Securities Trust, Series 1996-3, (Westdeutsche Landesbank
Girozentrale Swap Agreement), 5.395%, 12/13/1996 51,000,000
------------------------------------------------------------------------------
4,175,000 Maryland State IDFA, (Genetic Therapy, Inc.), (First National Bank of
Maryland, Baltimore LOC), 5.480%, 12/2/1996 4,175,000
------------------------------------------------------------------------------
3,056,000 Maryland State IDFA, (Human Genome), (Series 1994), (First National Bank of
Maryland, Baltimore LOC), 5.480%, 12/2/1996 3,056,000
------------------------------------------------------------------------------
5,900,000 Maryland State IDFA, (Kelly Springfield Tire), (First National Bank of
Maryland, Baltimore LOC), 5.580%, 12/2/1996 5,900,000
------------------------------------------------------------------------------
18,000,000 National Funding Corp., Series 1994-A, (American National Bank, Chicago LOC),
5.410%, 12/5/1996 18,000,000
------------------------------------------------------------------------------
695,000 New Jersey EDA, Series 1992 K-3, (Banque Nationale de Paris LOC), 5.768%,
12/2/1996 695,000
------------------------------------------------------------------------------
3,875,000 New Jersey EDA, Series 1992-H, (Banque Nationale de Paris LOC), 5.643%,
12/2/1996 3,875,000
------------------------------------------------------------------------------
7,315,000 Pelham City, IDB, (Columbus Bank and Trust Co., GA LOC), 5.435%, 12/5/1996 7,315,000
------------------------------------------------------------------------------
2,850,000 Pelham City, IDB, (Columbus Bank and Trust Co., GA LOC), 5.435%, 12/5/1996 2,850,000
------------------------------------------------------------------------------
5,900,000 Pennsylvania EDFA, (Series 1993-C), (Barclays Bank PLC, London LOC), 5.435%,
12/5/1996 5,900,000
------------------------------------------------------------------------------
30,000,000 SMM Trust, Series 1996-B, (Morgan Guaranty Trust Co., New York Swap
Agreement), 5.425%, 12/2/1996 30,000,000
------------------------------------------------------------------------------
30,000,000 SMM Trust, Series 1996-I, (Morgan Guaranty Trust Co., New York Swap
Agreement), 5.425%, 12/27/1996 30,000,000
------------------------------------------------------------------------------
10,000,000 SMM Trust, Series 1996-L, (Morgan Guaranty Trust Co., New York Swap
Agreement), 5.425%, 12/13/1996 10,000,000
------------------------------------------------------------------------------
3,000,000 SMM Trust, Series 1996-V, (Morgan Guaranty Trust Co., New York Swap
Agreement), 5.706%, 12/24/1996 3,000,000
------------------------------------------------------------------------------
2,300,000 Saegertown Manufacturing Corp., (PNC Bank, N.A. LOC), 5.459%, 12/2/1996 2,300,000
------------------------------------------------------------------------------
6,260,000 Southeast Regional Holdings, LLC, (Series 1995-A), (Columbus Bank and Trust
Co., GA LOC), 5.435%, 12/5/1996 6,260,000
------------------------------------------------------------------------------
10,400,000 Southern Coil Processing, Inc. Notes, (Amsouth Bank N.A., Birmingham LOC),
5.500%, 12/5/1996 10,400,000
------------------------------------------------------------------------------
3,650,000 Sylacuaga, AL IDB, Parker Fertilizer Project Series 1992, (SouthTrust Bank of
Alabama, Birmingham LOC), 5.424%,
12/4/1996 3,650,000
------------------------------------------------------------------------------
3,670,000 (c)Toledo Medical Building I L.P., (Huntington National Bank, Columbus, OH
LOC), 6.360%, 10/31/1997 3,670,000
------------------------------------------------------------------------------
19,425,000 Union Development Co., (Bank of America NT and SA, San Francisco LOC), 5.435%,
12/5/1996 19,425,000
------------------------------------------------------------------------------
6,080,000 United Jewish Federation of Greater Pittsburgh VRDB, Series 1995A, (PNC Bank,
N.A. LOC), 5.400%, 12/5/1996 6,080,000
------------------------------------------------------------------------------
6,690,000 Van Dyne Crotty Co., (Huntington National Bank, Columbus, OH LOC), 5.435%,
12/5/1996 6,690,000
------------------------------------------------------------------------------
1,856,000 Vista Funding Corp., (Series 1995-A), (Star Bank, NA, Cincinnati LOC), 5.424%,
12/5/1996 1,856,000
------------------------------------------------------------------------------
6,000,000 Woodbury Business Forms, Inc./Caribbean Business Forms, Series 1996 Taxable
Revenue Bonds, (Columbus Bank and Trust Co., GA LOC), 5.435%, 12/5/1996 6,000,000
------------------------------------------------------------------------------ ----------------
Total 393,210,367
------------------------------------------------------------------------------ ----------------
FINANCE-EQUIPMENT--0.9%
------------------------------------------------------------------------------
20,000,000 Comdisco, Inc., 5.620%, 2/24/1997 20,000,000
------------------------------------------------------------------------------ ----------------
FINANCE-RETAIL--1.9%
------------------------------------------------------------------------------
21,000,000 AFS Insurance Premium Receivables Trust, (Series 1994-A), 5.931%, 12/15/1996 21,000,000
------------------------------------------------------------------------------
23,000,000 Carco Auto Loan Master Trust 1993-2, (Series 1993-2 Class A1), 5.555%,
12/15/1996 23,000,000
------------------------------------------------------------------------------ ----------------
Total 44,000,000
------------------------------------------------------------------------------ ----------------
INSURANCE--5.9%
------------------------------------------------------------------------------
60,000,000 General American Life Insurance Co., 5.513%, 12/23/1996 60,000,000
------------------------------------------------------------------------------
25,000,000 SunAmerica Life Insurance Co., 5.475%, 12/1/1996 25,000,000
------------------------------------------------------------------------------
15,000,000 SunAmerica Life Insurance Co., 5.475%, 12/1/1996 15,000,000
------------------------------------------------------------------------------
30,000,000 Transamerica Occidental Life Insurance Company, 5.375%,
12/30/1996 30,000,000
------------------------------------------------------------------------------ ----------------
Total 130,000,000
------------------------------------------------------------------------------ ----------------
TOTAL NOTES-VARIABLE 587,210,367
------------------------------------------------------------------------------ ----------------
TIME DEPOSIT--2.3%
- ----------------------------------------------------------------------------------------------
BANKING--2.3%
------------------------------------------------------------------------------
50,000,000 Bank of Tokyo-Mitsubishi Ltd., 5.750%, 12/2/1996 50,000,000
------------------------------------------------------------------------------ ----------------
U.S. TREASURY--0.8%
- ----------------------------------------------------------------------------------------------
18,000,000 United States Treasury Notes, 7.500%, 1/31/1997 18,068,366
------------------------------------------------------------------------------ ----------------
(D) REPURCHASE AGREEMENTS--17.4%
- ----------------------------------------------------------------------------------------------
49,292,000 CIBC Wood Gundy Securities Corp., 5.65%, dated 11/29/1996, due 12/2/1996 49,292,000
------------------------------------------------------------------------------
76,790,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.65%,
dated 11/29/1996, due 12/2/1996 76,790,000
------------------------------------------------------------------------------
70,000,000 First Union Capital Markets, 5.66%, dated 11/29/1996,
due 12/2/1996 70,000,000
------------------------------------------------------------------------------
22,000,000 Fuji Government Securities, Inc., 5.73%, dated 11/29/1996,
due 12/2/1996 22,000,000
------------------------------------------------------------------------------
45,000,000 Goldman Sachs Group, LP, 5.75%, dated 11/29/1996, due 12/2/ 1996 45,000,000
------------------------------------------------------------------------------
101,000,000 HSBC Securities, Inc., 5.75%, dated 11/29/1996, due 12/2/1996 101,000,000
------------------------------------------------------------------------------
22,000,000 PaineWebber Group, Inc., 5.73%, dated 11/29/1996, due 12/2/1996 22,000,000
------------------------------------------------------------------------------ ----------------
TOTAL REPURCHASE AGREEMENTS 386,082,000
------------------------------------------------------------------------------ ----------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 2,215,318,631
------------------------------------------------------------------------------ ----------------
</TABLE>
(a) Each issue shows the rate of discount at time of purchase for discount
issues, or the coupon for the 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 November 30, 1996, these securities
amounted to $3,670,000 which represents 0.2% 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
($2,216,101,973) at November 30, 1996.
The following acronyms are used throughout this portfolio:
EDA--Economic Development Authority
EDFA--Economic Development Financing Authority
IDA--Industrial Development Authority
IDB--Industrial Development Bond
IDFA--Industrial Development Finance Authority
LLC--Limited Liability Corporation
LOC--Letter of Credit
LP--Limited Partnership
PLC--Public Limited Company
VRDB--Variable Rate Demand Bond
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 2,215,318,631
- ------------------------------------------------------------------------------------------------
Cash 629,335
- ------------------------------------------------------------------------------------------------
Income receivable 4,274,287
- ------------------------------------------------------------------------------------------------
Receivable for shares sold 18,122
- ------------------------------------------------------------------------------------------------ ----------------
Total assets 2,220,240,375
- ------------------------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------------------
Income distribution payable $ 3,780,431
- ----------------------------------------------------------------------------------
Accrued expenses 357,971
- ---------------------------------------------------------------------------------- ------------
Total liabilities 4,138,402
- ------------------------------------------------------------------------------------------------ ----------------
NET ASSETS for 2,216,101,973 shares outstanding $ 2,216,101,973
- ------------------------------------------------------------------------------------------------ ----------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$2,216,101,973 / 2,216,101,973 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------------
Interest $ 52,966,820
- --------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 4,799,472
- -----------------------------------------------------------------------------------
Administrative personnel and services fee 725,602
- -----------------------------------------------------------------------------------
Custodian fees 99,955
- -----------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 1,188,503
- -----------------------------------------------------------------------------------
Directors'/Trustees' fees 8,967
- -----------------------------------------------------------------------------------
Auditing fees 7,259
- -----------------------------------------------------------------------------------
Legal fees 4,514
- -----------------------------------------------------------------------------------
Portfolio accounting fees 72,398
- -----------------------------------------------------------------------------------
Distribution services fee 3,359,631
- -----------------------------------------------------------------------------------
Shareholder services fee 2,399,736
- -----------------------------------------------------------------------------------
Share registration costs 119,987
- -----------------------------------------------------------------------------------
Printing and postage 35,136
- -----------------------------------------------------------------------------------
Insurance premiums 8,357
- -----------------------------------------------------------------------------------
Taxes 82,167
- -----------------------------------------------------------------------------------
Miscellaneous 11,529
- ----------------------------------------------------------------------------------- -------------
Total expenses 12,923,213
- -----------------------------------------------------------------------------------
Waivers and reimbursements--
- --------------------------------------------------------------------
Waiver of investment advisory fee $ (978,287)
- --------------------------------------------------------------------
Waiver of distribution services fee (2,399,736)
- -------------------------------------------------------------------- -------------
Total waivers (3,378,023)
- ----------------------------------------------------------------------------------- -------------
Net expenses 9,545,190
- -------------------------------------------------------------------------------------------------- -------------
Net investment income $ 43,421,630
- -------------------------------------------------------------------------------------------------- -------------
</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, 1996 MAY 31, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------
Net investment income $ 43,421,630 $ 63,907,688
- ---------------------------------------------------------------------- ---------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------
Distributions from net investment income (43,421,630) (63,907,688)
- ---------------------------------------------------------------------- ---------------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------
Proceeds from sale of shares 4,525,803,129 6,213,736,052
- ----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 39,633,754 60,421,530
- ----------------------------------------------------------------------
Cost of shares redeemed (3,888,570,417) (5,762,005,353)
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets resulting from share transactions 676,866,466 512,152,229
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets 676,866,466 512,152,229
- ----------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------
Beginning of period 1,539,235,507 1,027,083,278
- ---------------------------------------------------------------------- ---------------------- -----------------
End of period $ 2,216,101,973 $ 1,539,235,507
- ---------------------------------------------------------------------- ---------------------- -----------------
</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, --------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992 1991 1990(A)
- ------------------------- -------------- ------ ----- ----- ----- ----- ----- -------
<S> <C> <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 $ 1.00
- -------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------------
Net investment income 0.02 0.05 0.05 0.02 0.03 0.04 0.07 0.06
- -------------------------
LESS DISTRIBUTIONS
- -------------------------
Distributions from net
investment income (0.02) (0.05) (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 $ 1.00
- ------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.29% 4.90% 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% 0.99% 0.98% 0.94% 0.73%*
- -------------------------
Net investment income 4.52%* 4.78% 4.57% 2.45% 2.58% 4.21% 6.50% 7.82%*
- -------------------------
Expense waiver/
reimbursement (c) 0.35%* 0.38% 0.20% 0.18% 0.15% 0.22% 0.44% 0.46%*
- -------------------------
SUPPLEMENTAL DATA
- -------------------------
Net assets, end of
period (000 omitte $2,216,102 $1,539,235 $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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Corporation consists of four portfolios. 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. The investment objective of the Fund
is current income consistent with stability of principal and liquidity.
(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's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the 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. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. 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. The Fund's restricted
security is valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.
Additional information on the restricted security held at November 30, 1996
is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Toledo Medical Building I L.P. 11/2/92 $ 3,720,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1996, there were 12,500,000,000 shares ($0.001 par value per
share) authorized. At November 30, 1996, capital paid in aggregated
$2,216,101,973. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
- ----------------------------------------------------------------------- ---------------------- ----------------
<S> <C> <C>
Shares sold 4,525,803,129 6,213,736,052
- -----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 39,633,754 60,421,530
- -----------------------------------------------------------------------
Shares redeemed (3,888,570,417) (5,762,005,353)
- ----------------------------------------------------------------------- ---------------------- ----------------
Net change resulting from share transactions 676,866,466 512,152,229
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.50% 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("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 0.35% of the average daily net assets of the Fund shares,
annually, to compensate 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 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC"), serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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, Treasurer and Secretary
John E. Murray, Jr. S. Elliott Cohan
Wesley W. Posvar Assistant Secretary
Marjorie P. Smuts
</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
NOVEMBER 30, 1996
LOGO OF FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 147551105
0122606 (1/97)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I'm pleased to present the Semi-Annual Report to Shareholders for Treasury Cash
Series, a portfolio of Cash Trust Series, Inc., which covers the six-month
period ended November 30, 1996. 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, the fund helped its shareholders earn a total of
$0.02 in dividends per share on their ready cash--while offering the advantages
of daily liquidity and stability of principal.* Assets totaled $785.9 million at
the end of the reporting period.
At the end of the reporting period, 82.3% of the fund's assets was invested in
repurchase agreements backed by U.S. government securities, which offered yield
advantage over many direct government securities. The remainder of the fund's
assets was 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 daily income from U.S. Treasury obligations. Please contact
your investment representative if you have any questions about your investment.
Sincerely,
Richard B. Fisher
President
January 15, 1997
* 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Treasury Cash Series invests in U.S. Treasury and U.S. government agency
securities and in repurchase agreements collateralized by U.S. government
securities. The fund is rated AAAm by Standard & Poor's Ratings Group ("S&P")
and Aaa by Moody's Investors Service, Inc.* ("Moody's")
Over the six months ended November 30, 1996, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that exceeded the 2.50% pace
thought to be non-inflationary. Confronted with persistent strength in the
housing, auto, and retail sectors, the Fed stuck to its belief that economic
growth in the second half of the year would return to a more moderate pace. Over
the reporting period, the market itself was not so sure, and movements in
interest rates proved to be rather volatile as expectations regarding the timing
and extent of the next policy move from the Fed swayed back and forth with each
new piece of economic data. Signs of an economic slowdown began to emerge in the
third quarter of 1996, but the market fretted that it might not be enough to
prevent the Fed from tightening to ward off inflationary pressures. By the end
of the reporting period, however, the market calmed as growth in employment and
housing moderated and inflation remained tame. Overall, the Federal funds target
rate remained unchanged at 5.25%, where it has been since late January 1996.
Movements in interest rates reflected the market uncertainty. The yield on the
three-month Treasury bill began the reporting period at 5.20% in early June and
rose to 5.35% by late August amid fears that the robust economy might spark
inflation--particularly in the face of tight labor market conditions. The yield
then fell to 5.15% as signs of tempered growth began to appear, rose once more
to 5.35% as the market continued to reflect concerns over developing wage
pressures, and then plunged to 5.00% in late September/early October as relief
finally took hold. The yield finally rebounded to a more realistic 5.15% and
traded within a narrow range for the remainder of the reporting period, as the
market broke its trend of over-reacting to each economic release and accepted
the idea that the Fed was likely to be on hold indefinitely. Overall, the short
end of the Treasury yield curve ended the reporting period 27 basis points
flatter than it began, reflecting the retreat from expectations of an imminent
tightening in monetary policy.
For most of the six-month reporting period, the fund was targeted in a 35 to 45
day average maturity range, representing a neutral stance. The average maturity
of the fund varied within that range according to relative value opportunities
available in the short-term Treasury and repo markets. The fund remained
barbelled in structure, combining repurchase agreements with purchases of
fixed-rate Treasury securities with longer maturities. With a friendly inflation
picture and no signs of a dramatic change in the overall fundamental picture of
the economy on the horizon, the Fund will likely maintain its current neutral
positioning in the near future.
- ---------
* 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------- --------------------------------------------------------------------------------- --------------
<C> <S> <C>
SHORT-TERM U.S. TREASURY OBLIGATIONS--19.4%
- ------------------------------------------------------------------------------------------------
(A)U.S. TREASURY BILLS--4.5%
---------------------------------------------------------------------------------
$ 36,000,000 4.925%-5.455%, 3/6/1997-8/21/1997 $ 35,109,610
---------------------------------------------------------------------------------
U.S. TREASURY NOTES--14.9%
---------------------------------------------------------------------------------
117,000,000 5.625%-8.625%, 12/31/1996-9/30/1997 117,488,365
--------------------------------------------------------------------------------- --------------
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 152,597,975
--------------------------------------------------------------------------------- --------------
(B)REPURCHASE AGREEMENTS--82.3%
- ------------------------------------------------------------------------------------------------
25,000,000 BT Securities Corporation, 5.720%, dated 11/29/1996, due 12/2/1996 25,000,000
---------------------------------------------------------------------------------
35,000,000 Bank of Tokyo-Mitsubishi Ltd., 5.680%, dated 11/29/1996, due
12/2/1996 35,000,000
---------------------------------------------------------------------------------
89,000,000 Barclays de Zoete Wedd Securities, Inc., 5.720%, dated 11/29/1996, due 12/2/1996 89,000,000
---------------------------------------------------------------------------------
35,000,000 Bear, Stearns and Co., 5.700%, dated 11/29/1996, due 12/2/1996 35,000,000
---------------------------------------------------------------------------------
30,000,000 CIBC Wood Gundy Securities Corp., 5.700%, dated 11/29/1996, due 12/2/1996 30,000,000
---------------------------------------------------------------------------------
14,000,000 (c)CS First Boston, Inc., 6.250%, dated 11/19/1996, due 1/2/1997 14,000,000
---------------------------------------------------------------------------------
35,000,000 Daiwa Securities America, Inc., 5.375%, dated 11/27/1996, due
12/2/1996 35,000,000
---------------------------------------------------------------------------------
30,000,000 Deutsche Bank Government Securities, Inc., 5.700%, dated
11/29/1996, due 12/2/1996 30,000,000
---------------------------------------------------------------------------------
35,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.650%, dated
11/29/1996, due 12/2/1996 35,000,000
---------------------------------------------------------------------------------
35,000,000 Dresdner Securities (USA), Inc., 5.420%, dated 11/27/1996, due
12/2/1996 35,000,000
---------------------------------------------------------------------------------
35,000,000 First Union Capital Markets, 5.660%, dated 11/29/1996, due 12/2/1996 35,000,000
---------------------------------------------------------------------------------
35,000,000 Greenwich Capital Markets, Inc., 5.720%, dated 11/29/1996, due
12/2/1996 35,000,000
---------------------------------------------------------------------------------
30,000,000 Nesbitt Burns Securities, Inc., 5.710%, dated 11/29/1996, due
12/2/1996 30,000,000
---------------------------------------------------------------------------------
$ 14,000,000 (c)Morgan Stanley Group, Inc., 5.330%, dated 10/17/1996, due 1/16/1997 $ 14,000,000
---------------------------------------------------------------------------------
35,000,000 Sanwa-BGK Securities Co., L.P., 5.700%, dated 11/29/1996, due
12/2/1996 35,000,000
---------------------------------------------------------------------------------
35,000,000 Societe Generale, 5.700%, dated 11/29/1996, due 12/2/1996 35,000,000
---------------------------------------------------------------------------------
5,000,000 (c)Swiss Bank Capital Markets, 5.350%, dated 10/7/1996, due 1/6/1997 5,000,000
---------------------------------------------------------------------------------
30,000,000 Swiss Bank Capital Markets, 5.700%, dated 11/29/1996, due 12/2/1996 30,000,000
---------------------------------------------------------------------------------
35,000,000 Toronto Dominion Securities (USA) Inc., 5.400%, dated 11/27/1996, due 12/2/1996 35,000,000
---------------------------------------------------------------------------------
30,000,000 UBS Securities, Inc., 5.730%, dated 11/29/1996, due 12/2/1996 30,000,000
--------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 647,000,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $ 799,597,975
--------------------------------------------------------------------------------- --------------
</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.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($785,915,960) at November 30, 1996.
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in repurchase agreements $ 647,000,000
- ---------------------------------------------------------------------------------
Investments in securities 152,597,975
- --------------------------------------------------------------------------------- --------------
Total investments in securities, at amortized cost and value $ 799,597,975
- -------------------------------------------------------------------------------------------------
Cash 162,326
- -------------------------------------------------------------------------------------------------
Income receivable 2,298,000
- ------------------------------------------------------------------------------------------------- --------------
Total assets 802,058,301
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------
Payable for investments purchased $ 14,000,000
- ---------------------------------------------------------------------------------
Income distribution payable 1,869,278
- ---------------------------------------------------------------------------------
Accrued expenses 273,063
- --------------------------------------------------------------------------------- --------------
Total liabilities 16,142,341
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 785,915,960 shares outstanding $ 785,915,960
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$785,915,960 / 785,915,960 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 16,641,965
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 1,552,300
- -------------------------------------------------------------------------------------
Administrative personnel and services fee 234,681
- -------------------------------------------------------------------------------------
Custodian fees 71,892
- -------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 105,270
- -------------------------------------------------------------------------------------
Directors'/Trustees' fees 3,841
- -------------------------------------------------------------------------------------
Auditing fees 6,866
- -------------------------------------------------------------------------------------
Legal fees 2,105
- -------------------------------------------------------------------------------------
Portfolio accounting fees 52,334
- -------------------------------------------------------------------------------------
Distribution services fee 1,086,610
- -------------------------------------------------------------------------------------
Shareholder services fee 776,150
- -------------------------------------------------------------------------------------
Share registration costs 33,858
- -------------------------------------------------------------------------------------
Printing and postage 16,752
- -------------------------------------------------------------------------------------
Insurance premiums 4,575
- -------------------------------------------------------------------------------------
Taxes 24,233
- -------------------------------------------------------------------------------------
Miscellaneous 6,405
- ------------------------------------------------------------------------------------- ------------
Total expenses 3,977,872
- -------------------------------------------------------------------------------------
Waivers and reimbursements--
- ------------------------------------------------------------------------
Waiver of investment advisory fee $ (114,507)
- ------------------------------------------------------------------------
Waiver of distribution services fee (776,150)
- ------------------------------------------------------------------------ -----------
Total waivers (890,657)
- ------------------------------------------------------------------------------------- ------------
Net expenses 3,087,215
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 13,554,750
- --------------------------------------------------------------------------------------------------- -------------
</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, 1996 MAY 31, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------
Net investment income $ 13,554,750 $ 28,646,187
- ---------------------------------------------------------------------- ---------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------
Distributions from net investment income (13,554,750) (28,646,187)
- ---------------------------------------------------------------------- ---------------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------
Proceeds from sale of shares 1,741,095,197 3,620,620,510
- ----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 9,816,830 22,590,400
- ----------------------------------------------------------------------
Cost of shares redeemed (1,558,726,139) (3,473,572,068)
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets resulting from share transactions 192,185,888 169,638,842
- ---------------------------------------------------------------------- ---------------------- -----------------
Change in net assets 192,185,888 169,638,842
- ----------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------
Beginning of period 593,730,072 424,091,230
- ---------------------------------------------------------------------- ---------------------- -----------------
End of period $ 785,915,960 $ 593,730,072
- ---------------------------------------------------------------------- ---------------------- -----------------
</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)
NOVEMBER 30, YEAR ENDED MAY 31,
1996 1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <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 $ 1.00
- -----------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------------
Net investment income 0.02 0.05 0.04 0.02 0.02 0.04 0.07 0.02
- -----------------------------
LESS DISTRIBUTIONS
- -----------------------------
Distributions from net
investment income (0.02) (0.05) (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 $ 1.00
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.21% 4.83% 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% 0.99% 0.98% 0.88% 0.60%*
- -----------------------------
Net investment income 4.37%* 4.70% 4.26% 2.33% 2.46% 4.18% 6.39% 7.75%*
- -----------------------------
Expense waiver/
reimbursement (c) 0.29%* 0.29% 0.08% 0.10% 0.04% 0.04% 0.22% 0.44%*
- -----------------------------
SUPPLEMENTAL DATA
- -----------------------------
Net assets, end of period
(000 omitted) $785,916 $593,730 $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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Corporation consists of four portfolios. 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. The investment objective of the Fund
is current income consistent with stability of principal and liquidity.
(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's use of the amortized cost method to value
its portfolio securities is 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 (the
"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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At November 30, 1996, there were 12,500,000,000 shares of $0.001 par value
capital stock authorized. At November 30, 1996, capital paid-in aggregated
$785,915,960. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
<S> <C> <C>
Shares sold 1,741,095,197 3,620,620,510
- -----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 9,816,830 22,590,400
- -----------------------------------------------------------------------
Shares redeemed (1,558,726,139) (3,473,572,068)
- ----------------------------------------------------------------------- ---------------------- ----------------
Net change resulting from share transactions 192,185,888 169,638,842
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.50% 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of
- --------------------------------------------------------------------------------
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("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 0.35% of the average daily net assets of the Fund annually, to
compensate 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 0.25%
of average daily net assets of the Fund for the period. This fee paid to FSS is
to finance certain services for shareholders and to maintain shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC"), serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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, Treasurer and Secretary
John E. Murray, Jr. S. Elliott Cohan
Wesley W. Posvar Assistant Secretary
Marjorie P. Smuts
</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, 1996
[LOGO OF FEDERATED INVESTORS]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and a subsidiary of Federated Investors.
Cusip 147551402
0122607 (1/97)
