--------------------------------------------------------------------------------
CONNECTICUT
--------------------------------------------------------------------------------
MUNICIPAL
--------------------------------------------------------------------------------
CASH
--------------------------------------------------------------------------------
TRUST
--------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
DATED APRIL 30, 1994
FEDERATED SECURITIES CORP.
(LOGO)
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
0052406 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Connecticut
Municipal Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the
"Trust"), for the six-month period from November 1, 1993 through April 30, 1994.
The Report includes an interview with the portfolio manager about economic
factors affecting the Fund, followed by Financial Statements containing the
Fund's Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
double-tax-free income-- free from federal regular income tax and Connecticut
investment income tax**--through a portfolio concentrated in high-quality,
short-term Connecticut municipal securities. As a shareholder in the Fund, you
have the opportunity to earn a greater after-tax yield than you could in a
comparable high-quality taxable investment.
From the first day to the last day of the report period, the Fund's total net
assets increased by more than $65 million to reach $206 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as education, health care, and housing. Through these
bonds, the Fund paid more than $1.6 million in dividends to all shareholders
during the report period.+
As a tax-sensitive Connecticut resident, you can rely on the Fund to seek the
best tax-free income opportunities for your cash. As always, we will continue to
provide you with the highest level of professional service. We appreciate your
support and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1994
* As a money market mutual fund, the Fund is managed to pursue a stable share
price of $1.00, although there is no guarantee that it will do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax.
+ Please note that this report includes financial highlights for Institutional
Service Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Jeff A. Kozemchak, CFA
Q
What has happened to interest rates and the municipal money markets since
our last reporting?
A
Throughout most of last year, economic numbers continued to be more anemic
than anticipated, and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%.
The municipal money market reacted with a corresponding back-up in rates, which
was somewhat exacerbated by $3.2 billion of new fixed-rate supply offered by the
State of California in mid-February. With renewed concerns of economic recovery
and inflation, investors immediately began to demand higher liquidity premiums
to invest further out the yield curve, causing interest rates on national
one-year notes to rise to their highest levels since June, 1992. In April, the
municipal money market was affected by heavy cash outflows as investors withdrew
cash to pay tax bills. Also, in mid-April and mid-May the Fed tightened twice,
moving the Federal funds rate target from 3.50% to 4.25%.
Q
How are you managing the portfolio to capitalize on this interest rate
environment?
A
Unlike most of last year, when expectations of stable to lower interest
rates were commonplace, we now are in an environment of rising interest
rate expectations. For most of last year, I maintained a longer average
maturity in the Fund, to take advantage of the yield premium available on
fixed-rate notes and commercial paper relative to variable rate demand notes.
Since November of 1993, I have allowed the average maturity of the Fund to
slowly decrease from 63 days to 52 days at the end of April, 1994. A shorter
average maturity, combined with a higher percentage of liquid variable rate
demand notes, will allow the Fund to be even more responsive to an increasing
interest rate environment.
--------------------------------------------------------------------------------
Q
Jeff, how has the Fund performed over the period?
A
For the six-month period ending April 30, 1994, the Fund had an annualized
total return of 1.85%.* For a Connecticut resident in the highest federal
and state brackets, this was equivalent to a taxable return of 3.31%. The
Fund's seven-day net yield at period end was 2.22%*, which was equivalent to a
taxable yield of 3.97%. The difference between the two returns illustrates the
increase in short-term interest rates.
Q
Going forward, what is your outlook for the tax-free money markets and the
Fund?
A
I believe that interest rates will continue to rise during the year and
that the Federal funds rate target will be 4.25% to 4.50% by mid-year and
4.75% or higher by year-end. In a rising rate environment, stable net asset
value money market funds like the Fund are a key component in any strategy to
preserve principal value. The Fund's yield should continue to rise as interest
rates rise. Also, I continue to expect that tax-free cash vehicles like the Fund
will continue to outperform taxable money fund alternatives as they have over
the past several years. If interest rates continue to rise this year, I will
keep the average maturity short and the portfolio liquid, while choosing
carefully and selectively along the yield curve as attractive fixed-rate
opportunities appear.
* Performance quoted represents past performance and is not indicative of future
results.
CONNECTICUT MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- ------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.3%
----------------------------------------------------------------------
CONNECTICUT--89.0%
-------------------------------------------------------
$ 4,000,000 Ansonia, CT, 3.60% BANs, 12/15/94 NR(3) $ 4,012,185
-------------------------------------------------------
17,000,000 Connecticut Development Authority PCR Weekly VRDNs
(Series 1993A)/(Connecticut Light & Power Co.)/
(Deutsche Bank AG LOC) A-1+ 17,000,000
-------------------------------------------------------
11,000,000 Connecticut Development Authority Solid Waste Disposal
Facility Weekly VRDNs (Series A)/(Exeter Energy)/
(Sanwa Bank Ltd. LOC)/(Subject to AMT) A-1+ 11,000,000
-------------------------------------------------------
1,000,000 Connecticut Development Authority Solid Waste Disposal
Facility Weekly VRDNs (Series B)/(Exeter Energy)/
(Sanwa Bank, Ltd. LOC)/(Subject to AMT) A-1+ 1,000,000
-------------------------------------------------------
7,499,000 Connecticut Development Authority Solid Waste Disposal
Facility Weekly VRDNs (Series C)/(Exeter Energy)/
(Sanwa Bank, Ltd. LOC)/(Subject to AMT) A-1+ 7,499,000
-------------------------------------------------------
2,100,000 Connecticut Development Authority Weekly VRDNs (C.E.M.
Corp.)/(Barclays Bank PLC LOC)/
(Subject to AMT) P-1 2,100,000
-------------------------------------------------------
700,000 Connecticut Development Authority Weekly VRDNs
(Capital District Energy Center)/(Canadian Imperial
Bank of Commerce LOC)/(Subject to AMT) P-1 700,000
-------------------------------------------------------
4,400,000 Connecticut Development Authority Weekly VRDNs (Capital
District Energy Center)/(Canadian Imperial Bank of
Commerce LOC)/(Subject to AMT) P-1 4,400,000
-------------------------------------------------------
3,400,000 Connecticut Development Authority Weekly VRDNs
(Independence Living, Inc.)/(Credit Commercial de
France LOC) VMIG1 3,400,000
-------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- ------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------
$ 2,925,000 Connecticut Development Authority Weekly VRDNs (Jewish
Community Center of Greater New Haven)/
(Fleet National Bank LOC) P-1 $ 2,925,000
-------------------------------------------------------
1,686,200 Connecticut Development Authority Weekly VRDNs
(RSA Corp.)/(Barclays Bank PLC LOC)/(Subject to AMT) P-1 1,686,200
-------------------------------------------------------
2,000,000 Connecticut Development Authority Weekly VRDNs (Series
1985)/(Airport Hotel)/(RK Bradley Associates Ltd.
Partnership)/(Daiwa Bank Ltd. and Royal Bank of Canada
LOCs) A-2 2,000,000
-------------------------------------------------------
3,120,000 Connecticut State Development Authority Weekly VRDNs
(Banta Associates)/(Marine Midland Bank N.A. and Hong
Kong Shang Hai Banking Corp. LOCs)/(Subject to AMT) P-1 3,120,000
-------------------------------------------------------
7,000,000 Connecticut State Development Authority, PCR Weekly
VRDNs (Series 1993A)/(Western Massachusetts Electric
Co.)/(Union Bank of Switzerland LOC) A-1+ 7,000,000
-------------------------------------------------------
5,000,000 Connecticut State Development Authority, Solid Waste
Disposal Weekly VRDNs (Series 1993)/(Rand-Whitney
Containerboard Ltd. Partnership)/(Chase Manhattan Bank
N.A. LOC)/(Subject to AMT) A-1 5,000,000
-------------------------------------------------------
2,000,000 Connecticut State Development Health Care Facilities
Weekly VRDNs (Independence Living, Inc.)/
(Daiwa Bank Ltd. LOC) VMIG2 2,000,000
-------------------------------------------------------
4,500,000 Connecticut State Economic Recovery Notes Weekly VRDNs A-1+ 4,500,000
-------------------------------------------------------
1,800,000 Connecticut State HEFA Weekly VRDNs (Charlotte
Hungerfield Hospital)/(Mitsubishi Bank Ltd. LOC) VMIG1 1,800,000
-------------------------------------------------------
4,000,000 Connecticut State HEFA Weekly VRDNs (Series A)/
(Forman School Issue)/(National Westminster Bank PLC
LOC) A-1+ 4,000,000
-------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- ------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------
$ 3,600,000 Connecticut State HEFA Weekly VRDNs (Series A)/
(Kent School)/(Barclays Bank PLC LOC) A-1+ $ 3,600,000
-------------------------------------------------------
5,300,000 Connecticut State HEFA, 2.60% CP (Windham Community
Memorial Hospital)/(Banque Paribas LOC), Mandatory
Tender 5/18/94 A-1 5,300,000
-------------------------------------------------------
2,300,000 Connecticut State HEFA, 2.65% CP (Series N)/
(Yale University), Mandatory Tender 5/17/94 A-1+ 2,300,000
-------------------------------------------------------
3,025,000 Connecticut State HEFA, 2.95% CP (Series L)/
(Yale University), Mandatory Tender 8/16/94 A-1+ 3,025,000
-------------------------------------------------------
4,750,000 Connecticut State HFA, 2.50% CP (Series C),
Mandatory Tender 5/16/94 A-1+ 4,750,000
-------------------------------------------------------
3,250,000 Connecticut State HFA, 2.70% CP (Series D)/
(Subject to AMT), Mandatory Tender 6/10/94 A-1+ 3,250,000
-------------------------------------------------------
4,000,000 Connecticut State HFA, 2.90% Annual TOBs (Series
1993H-2)/(Subject to AMT),
Mandatory Tender 11/15/94 A-1+ 4,000,000
-------------------------------------------------------
3,245,000 Connecticut State HFA, 2.95% CP (Series 1990D)/
(Subject to AMT), Mandatory Tender 8/11/94 A-1+ 3,245,000
-------------------------------------------------------
5,600,000 Connecticut State Resource Recovery Authority, 2.85%
RANs (Fleet National Bank LOC), 6/23/94 P-1 5,601,982
-------------------------------------------------------
3,500,000 Connecticut State Special Assessment Unemployment
Compensation Advance Fund, 3.00% Revenue Bond (Series
1993C)/(FGIC Insured), Mandatory Tender 7/1/94 A-1+ 3,501,132
-------------------------------------------------------
9,000,000 Connecticut State, 2.70% Quarterly Tender Option
Certificates, VRTCs (AMBAC Insured), 5/17/94, R A-1+ 9,000,000
-------------------------------------------------------
4,000,000 Connecticut State, 5.25% Economic Recovery Bonds,
6/15/94 AA- 4,012,527
-------------------------------------------------------
2,000,000 Connecticut State, GO Bonds Weekly VRDNs (Series
PA-50), R VMIG1 2,000,000
-------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- ------------------------------------------------------- -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------
$ 4,000,000 East Hampton, CT, 2.55% BANs, 7/15/94 NR $ 4,000,398
-------------------------------------------------------
1,500,000 East Lyme, CT, 2.56% BANs, 8/5/94 NR 1,500,226
-------------------------------------------------------
5,500,000 Hartford, CT, Redevelopment Authority Weekly VRDNs
(Underwood Towers)/(FSA Insured) A-2 5,500,000
-------------------------------------------------------
20,449,000 Meriden, CT, 2.70% BANs, 8/17/94 NR 20,454,979
-------------------------------------------------------
8,442,000 Milford, CT, 2.61% BANs, 11/15/94 NR(3) 8,442,432
-------------------------------------------------------
1,800,000 New Haven, CT, Weekly VRDNs (Starter Sportswear)/
(National Westminster Bank PLC LOC)/(Subject to AMT) P-1 1,800,000
-------------------------------------------------------
3,000,000 Plainfield, CT, 3.35% TANs, 5/10/94 NR 3,000,401
------------------------------------------------------- ------------
Total 183,426,462
------------------------------------------------------- ------------
PUERTO RICO--10.3%
-------------------------------------------------------
9,800,000 Commonwealth of Puerto Rico, 3.00% TRANs (Series
1994A), 7/29/94 SP-1+ 9,808,476
-------------------------------------------------------
400,000 Government Development Bank of Puerto Rico Weekly VRDNs
(Credit Suisse and Sumitomo Bank Ltd. LOCs) A-1 400,000
-------------------------------------------------------
5,000,000 Puerto Rico Industrial, Medical and Environmental PCA,
2.90% Annual TOBs (Series 1983A)/(Reynolds Metals Co.)/
(ABN AMRO Bank N.V. LOC), Optional Tender 9/1/94 A-1+ 5,001,634
-------------------------------------------------------
5,920,000 Puerto Rico Maritime Shipping Authority, 2.40% CP
(Credit Suisse LOC), Mandatory Tender 6/20/94 A-1+ 5,920,000
------------------------------------------------------- ------------
Total 21,130,110
------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (NOTE 2A) $204,556,572+
------------------------------------------------------- ------------
</TABLE>
* Please refer to the appendix of the Statement of Additional Information for an
explanation of the credit ratings.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($206,002,369) at
April 30, 1994.
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
BANs -- Bond Anticipation Notes
CP -- Commercial Paper
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
HEFA -- Health and Education Facilities Authority
HFA -- Housing Finance Authority/Agency
LOC -- Letter of Credit
LOCs -- Letters of Credit
PCA -- Pollution Control Authority
PCR -- Pollution Control Revenue
R -- Denotes Restricted Securities which are subject to restrictions on resale under
Federal Securities Laws. These securities are considered liquid under criteria
established by the Board of Trustees.
RANs -- Revenue Anticipation Notes
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
VRDNs -- Variable Rate Demand Notes
VRTCs -- Variable Rate Trust Certificates
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
-------------------------------------------------------------------------------
Investments in securities, at amortized cost and value (Note 2A) $204,556,572
-------------------------------------------------------------------------------
Cash 465,130
-------------------------------------------------------------------------------
Interest receivable 1,161,090
-------------------------------------------------------------------------------
Receivable for Fund shares sold 102,882
-------------------------------------------------------------------------------
Deferred expenses (Note 2E) 4,744
------------------------------------------------------------------------------- ------------
Total assets 206,290,418
-------------------------------------------------------------------------------
LIABILITIES:
--------------------------------------------------------------------
Dividends payable $250,757
--------------------------------------------------------------------
Payable for Fund shares redeemed 1,823
--------------------------------------------------------------------
Payable to shareholder services agent (Note 4) 18,787
--------------------------------------------------------------------
Accrued expenses and other liabilities 16,682
-------------------------------------------------------------------- --------
Total liabilities 288,049
------------------------------------------------------------------------------- ------------
NET ASSETS for 206,002,369 shares of beneficial interest outstanding $206,002,369
------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
($206,002,369 / 206,002,369 shares of beneficial interest outstanding) $ 1.00
------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------
Interest income (Note 2B) $2,221,597
---------------------------------------------------------------------------------
EXPENSES:
----------------------------------------------------------------------
Investment advisory fee (Note 4) $454,286
----------------------------------------------------------------------
Administrative personnel and services (Note 4) 122,034
----------------------------------------------------------------------
Custodian and portfolio accounting fees 10,554
----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 2,875
----------------------------------------------------------------------
Fund share registration fees 19,581
----------------------------------------------------------------------
Shareholder services fees (Note 4) 18,787
----------------------------------------------------------------------
Trustees' fees 1,500
----------------------------------------------------------------------
Auditing fees 7,073
----------------------------------------------------------------------
Legal fees 7,750
----------------------------------------------------------------------
Printing and postage 5,000
----------------------------------------------------------------------
Insurance premiums 2,353
----------------------------------------------------------------------
Miscellaneous 5,188
---------------------------------------------------------------------- --------
Total expenses 656,981
----------------------------------------------------------------------
Deduct--Waiver of investment advisory fee (Note 4) 118,570
---------------------------------------------------------------------- --------
Net expenses 538,411
--------------------------------------------------------------------------------- ----------
Net investment income $1,683,186
--------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1994* 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
-------------------------------------------------------------
OPERATIONS--
-------------------------------------------------------------
Net investment income $ 1,683,186 $ 2,592,796
------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
-------------------------------------------------------------
Dividends to shareholders from net investment income (1,683,186) (2,592,796)
------------------------------------------------------------- ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
-------------------------------------------------------------
Proceeds from sale of shares 272,919,937 299,253,615
-------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 502,150 931,684
-------------------------------------------------------------
Cost of shares redeemed (207,865,929) (300,063,512)
------------------------------------------------------------- ------------- -------------
Change in net assets from Fund share transactions 65,556,158 121,787
------------------------------------------------------------- ------------- -------------
Change in net assets 65,556,158 121,787
-------------------------------------------------------------
NET ASSETS:
-------------------------------------------------------------
Beginning of period 140,446,211 140,324,424
------------------------------------------------------------- ------------- -------------
End of period $ 206,002,369 $ 140,446,211
------------------------------------------------------------- ------------- -------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------------------
1994* 1993 1992 1991 1990**
----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------
Net investment income 0.01 0.02 0.03 0.04 0.05
------------------------------------- ---- ----- ----- ----- ------
LESS DISTRIBUTIONS
-------------------------------------
Dividends to shareholders from net
investment income (0.01) (0.02) (0.03) (0.04) (0.05 )
------------------------------------- ---- ----- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
------------------------------------- ---- ----- ----- ----- ------
TOTAL RETURN*** 0.92 % 1.96% 2.68% 4.04% 5.54 %
-------------------------------------
RATIOS TO AVERAGE NET ASSETS
-------------------------------------
Expenses 0.59 %(b) 0.57% 0.56% 0.56% 0.48 %(b)
-------------------------------------
Net investment income 1.85 %(b) 1.95% 2.66% 3.94% 5.32 %(b)
-------------------------------------
Expense waiver/reimbursement(a) 0.13 %(b) 0.25% 0.30% 0.21% 0.28 %(b)
-------------------------------------
SUPPLEMENTAL DATA
-------------------------------------
Net assets, end of period (000s
omitted) $206,002 $140,446 $140,118 $140,113 $138,378
-------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from November 1, 1989 (date of initial
public investment), to October 31, 1990.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of Connecticut Municipal Cash Trust
(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.
From December 31, 1990, until November 6, 1992, the Fund provided two classes of
shares ("Institutional Service Shares" and "Cash Series Shares"). Cash Series
Shares were identical in all respects to Institutional Service Shares except
that Cash Series Shares were sold pursuant to a distribution plan ("Plan")
adopted in accordance with Investment Company Act Rule 12b-1. Under the Plan,
the Fund paid Federated Securities Corp. (the "Distributor") a fee at an annual
rate up to .40 of 1% of the average daily net asset value of the Cash Series
Shares to finance any activity which was principally intended to result in the
sale of Cash Series Shares. As of November 6, 1992, the Plan was terminated by
the Trustees of the Trust. As a result of the termination of the Plan, fee
accruals under the Plan have been discontinued.
(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 (GAAP).
<TABLE>
<S> <C>
A. 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 Investment Company Act of
1940.
Since the Fund invests a substantial portion of its assets in issuers located in one
state, it will be more susceptible to factors adversely affecting issuers of that state,
than would be a comparable general tax-exempt mutual fund. In order to reduce the credit
risk associated with such factors, at April 30, 1994, 59.8% of the securities in the
portfolio of investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The aggregate
percentages by financial institutions and agencies ranged from 0.20% to 9.5% of total
investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount are amortized as required by the Internal Revenue Code,
as amended ("Code"). Distribution to shareholders are recorded on the ex-dividend date.
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the Code
applicable to regulated investment companies and distribute to shareholders each year
substantially all of its taxable income. Accordingly, no provisions for federal tax are
necessary.
D. 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense of registering the
shares, have been deferred and are being amortized using the straight-line method over a
period of five years from the Fund's commencement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only be resold upon
registration under Federal securities law 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
Trustees. The Fund will not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7 under the
Investment Company Act of 1940. Additional information on each restricted security held
at April 30, 1994, is as follows:
</TABLE>
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
--------------------------------------------------- -------------------- ------------
<S> <C> <C>
Connecticut State Quarterly Tender Option
Certificates 11/4/93 and 2/15/94 $9,000,000
Connecticut State General Obligation Bonds 12/27/93 $2,000,000
G. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1994, capital paid-in aggregated $65,556,158.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------
1994* 1993
------------ ------------
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES**
----------------------------------------------------------------
Shares sold 272,919,937 299,251,726
----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 502,150 931,684
----------------------------------------------------------------
Shares redeemed (207,865,929) (299,854,992)
---------------------------------------------------------------- ------------ ------------
Net change resulting from Fund share transactions 65,556,158 328,418
---------------------------------------------------------------- ------------ ------------
CASH SERIES SHARES**
----------------------------------------------------------------
Shares sold -- 1,899
----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared -- --
----------------------------------------------------------------
Shares redeemed -- (208,520)
---------------------------------------------------------------- ------------ ------------
Net change resulting from Fund share transactions -- --
---------------------------------------------------------------- ------------ ------------
</TABLE>
* Six months ended April 30, 1994.
** Beginning November 7, 1992 shares of the Fund were sold without class
designation.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .50 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS") the Fund will pay FSS up to .25 of
1% of average net assets of the Fund
CONNECTICUT MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
for the period. This fee is to obtain personal services for shareholders and the
maintenance of shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The fee is based on the size, type and number of accounts and transactions made
by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($41,950) were borne initially
by Adviser. The Fund has agreed to reimburse Adviser at an annual rate of .005
of 1% of average daily net assets for organizational expenses until expenses
initially borne by Adviser are fully reimbursed or the expiration of five years
after November 1, 1989, date the Fund's portfolio first became effective,
whichever occurs earlier. For the six months ended April 30, 1994, the Fund paid
$4,251 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $120,000,000 and $115,400,000, respectively. These purchases and sales were
conducted on an arms-length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fee or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by
the federal government or any of its agencies.
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.
--------------------------------------------------------------------------------
OHIO
--------------------------------------------------------------------------------
MUNICIPAL
--------------------------------------------------------------------------------
CASH
--------------------------------------------------------------------------------
TRUST
--------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
FEDERATED SECURITIES CORP.
(LOGO)
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
2052903 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Ohio Municipal
Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the "Trust"),
for the six-month period from November 1, 1993 through April 30, 1994. The
Report includes an interview with the portfolio manager about economic factors
affecting the Fund, followed by Financial Statements containing the Fund's
Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
double-tax-free income-- free from federal regular income tax and Ohio state
income tax**--through a portfolio concentrated in high-quality, short-term Ohio
municipal securities. As a shareholder in the Fund, you have the opportunity to
earn a greater after-tax yield than you could in a comparable high-quality
taxable investment.
On the last day of the report period, the Fund's total net assets were more than
$189 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as education, health care, housing, and public
utilities. Through these bonds, the Fund paid more than $1.9 million in
dividends to all shareholders during the report period.+
As a tax-sensitive Ohio resident, you can rely on the Fund to seek the best
tax-free income opportunities for your cash. As always, we will continue to
provide you with the highest level of professional service. We appreciate your
support and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1994
* As a money market fund, the Fund is managed to pursue a stable share price of
$1.00, although there is no guarantee that it will do so. An investment in
the Fund is neither insured nor guaranteed by the U.S. government.
** Income may be subject to the federal alternative minimum tax.
+ Please note that this report includes financial highlights for both Cash II
and Institutional Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Jeff A. Kozemchak, CFA
Q
What has happened to interest rates and the municipal money markets over
the report period?
A
Throughout most of last year, economic numbers continued to be more anemic
than anticipated and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%.
The municipal money market reacted with a corresponding back-up in rates, which
was somewhat exacerbated by $3.2 billion of new fixed-rate supply offered by the
State of California in mid-February. With renewed concerns of economic recovery
and inflation, investors immediately began to demand higher liquidity premiums
to invest further out the yield curve, causing interest rates on national
one-year notes to rise to their highest levels since June, 1992. In April, the
municipal money market was affected by heavy cash outflows as investors withdrew
cash to pay tax bills. Also, in mid-April and mid-May the Fed tightened twice,
moving the Federal funds rate target from 3.50% to 4.25%.
Q
How are you managing the Fund to capitalize on this interest rate
environment?
A
Unlike most of last year, when expectations of stable to lower interest
rates were commonplace, we now are in an environment of rising interest
rate expectations. For most of last year, I maintained a longer average
maturity in the Fund to take advantage of the yield premium available on
fixed-rate notes and commercial paper relative to variable rate demand notes.
Since November, 1993, I have allowed the average maturity of the Fund to
decrease from 78 days to 54 days at the end of April, 1994. A shorter average
maturity, combined with a higher percentage of liquid variable rate demand
notes, will allow the Fund to be even more responsive to an increasing rate
environment.
--------------------------------------------------------------------------------
Q
Jeff, how has the Fund performed over the period?
A
For the six-month period ending April 30, 1994, the Fund had an annualized
total return of 2.13% for the Institutional Shares and 1.83% for the Cash
II Shares.* For an Ohio resident in the highest federal and state brackets,
this was equivalent to taxable returns of 4.03% and 3.46%, respectively. These
numbers illustrate the attractiveness of the Fund relative to taxable
investments.
Q
Going forward, what is your outlook for the tax-free money markets and the
Fund?
A
I believe that interest rates will continue to rise over the year, and that
the Federal funds rate target will be 4.25% to 4.50% by mid-year and 4.75%
or higher by year-end. In a rising interest rate environment, stable net
asset value money market funds like the Fund are a key component in any strategy
to preserve principal value. The Fund's yield should continue to rise as
interest rates rise. Also, I continue to expect that tax-free cash vehicles like
the Fund will continue to outperform taxable money fund alternatives as they
have over the past several years. If interest rates continue to rise this year,
I will keep the average maturity short and the portfolio liquid, while choosing
carefully and selectively along the yield curve as attractive fixed-rate
opportunities appear.
* Performance quoted represents past performance and is not indicative of future
returns.
OHIO MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.0%
----------------------------------------------------------------------
OHIO--98.2%
--------------------------------------------------------
$ 3,500,000 Akron, OH, Sanitary Sewer System Improvement Notes,
2.80% GO BANs, 6/15/94 MIG1 $ 3,501,281
--------------------------------------------------------
1,575,000 Akron, OH, Street Improvement Notes, 2.93% BANs (Series
1993), 12/15/94 NR(3) 1,576,722
--------------------------------------------------------
500,000 Allen County, OH, IDR Weekly VRDNs (Nickles Bakery of
Ohio, Inc.)/(Society National Bank LOC)/
(Subject to AMT) P-1 500,000
--------------------------------------------------------
3,500,000 Belmont County, OH, Weekly VRDNs (Lesco, Inc.)/
(PNC Bank N.A. LOC)/(Subject to AMT) A-1 3,500,000
--------------------------------------------------------
3,000,000 Cincinnati, OH, Building Acquisition, 2.93% GO
UT BANs, 6/1/94 NR(2) 3,000,321
--------------------------------------------------------
5,375,000 Cincinnati, OH, Student Loan Revenue Bonds, 2.90% Annual
TOBs (Series 1987A)/(Cincinnati Student Loan Funding
Corp.)/(Fuji Bank Ltd. LOC)/(Subject to AMT), Mandatory
Tender 7/1/94 VMIG1 5,375,000
--------------------------------------------------------
4,000,000 Cincinnati-Hamilton County, OH, Port Authority
Weekly VRDNS (4th Street Limited Partnership)/
(PNC Bank, Kentucky LOC) P-1 4,000,000
--------------------------------------------------------
2,675,000 Cincinnati-Hamilton County, OH, Port Authority, 2.95%
Annual TOBs (Series 8)/(Bethesda One Limited
Partnership)/(Bank One, Columbus N.A. LOC),
Optional Tender 8/1/94 P-1 2,675,000
--------------------------------------------------------
400,000 Cleveland, OH, IDA Weekly VRDNs (Garland Company)/
(Society National Bank LOC) P-1 400,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 1,900,000 Clinton County, OH, Hospital Authority Weekly VRDNs
(Clinton Memorial Hospital)/(BancOhio National Bank LOC) P-1 $ 1,900,000
--------------------------------------------------------
1,100,000 Columbus, OH, Sewer System Revenue Bonds Weekly VRDNs
(Series B)/(Sanwa Bank Ltd. LOC) A-1+ 1,100,000
--------------------------------------------------------
1,295,000 Crawford County, OH, IDA, 2.95% TOBs (United
Photographic, Inc.)/(Bank One, Columbus N.A. LOC),
9/1/94 P-1 1,295,000
--------------------------------------------------------
900,000 Cuyahoga County, OH, IDA Weekly VRDNs
(Animal Protection League)/(Society Bank N.A. LOC) P-1 900,000
--------------------------------------------------------
740,000 Cuyahoga County, OH, IDA Weekly VRDNs (Parma-Commerce
Parkway-West)/(Society National Bank LOC) P-1 740,000
--------------------------------------------------------
1,400,000 Cuyahoga County, OH, IDA Weekly VRDNs (Premier
Manufacturing)/(First National Bank, Louisville LOC)/
(Subject to AMT) P-1 1,400,000
--------------------------------------------------------
1,950,000 Cuyahoga County, OH, IDR Weekly VRDNs (East Park
Retirement Community, Inc.)/(Society National Bank LOC)/
(Subject to AMT) P-1 1,950,000
--------------------------------------------------------
750,000 Cuyahoga County, OH, IDR Weekly VRDNs (Interstate Diesel
Service, Inc.)/(Huntington National Bank LOC)/
(Subject to AMT) P-1 750,000
--------------------------------------------------------
350,000 Cuyahoga County, OH, Weekly VRDNs (Landerhaven Country
Club Estates Ltd.)/(Society National Bank LOC) P-1 350,000
--------------------------------------------------------
3,215,000 Cuyahoga Falls, OH, 2.82% BANs, 1/18/95 NR(3) 3,219,939
--------------------------------------------------------
5,000,000 Dayton, OH, Revenue Refunding Bonds Weekly VRDNs (Series
1993E)/(Emery Air Freight Corp.)/
(Mellon Bank N.A. LOC) VMIG1 5,000,000
--------------------------------------------------------
1,640,000 Euclid, OH, 2.93% GO BANs, 9/29/94 NR(2) 1,640,855
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 2,415,000 Fairfield County, OH, 3.15% BANs, 10/28/94 NR $ 2,419,049
--------------------------------------------------------
1,459,672 Fayetteville-Perry, OH, Local School District, 2.93%
BANs, 6/10/94 NR 1,460,030
--------------------------------------------------------
3,255,000 Franklin County, OH, IDA Weekly VRDNs (Unicorn Leasing
Co.)/(Fifth Third Bank LOC)/(Subject to AMT) P-1 3,255,000
--------------------------------------------------------
4,500,000 Franklin County, OH, IDR Weekly VRDNs
(Heekin Can, Inc.)/(PNC Bank N.A. LOC) P-1 4,500,000
--------------------------------------------------------
2,000,000 Franklin County, OH, IDRB Weekly VRDNs (Tigerpoly
Manufacturing, Inc.)/(Mitsubishi Bank Ltd. LOC)/
(Subject to AMT) P-1 2,000,000
--------------------------------------------------------
1,000,000 Franklin County, OH, Weekly VRDNs (Series 1992)/
(Rickenbacker Holdings, Inc.)/(Bank One,
Columbus N.A. LOC) P-1 1,000,000
--------------------------------------------------------
7,000,000 Hamilton County, OH, Hospital Authority Revenue
Bonds Weekly VRDNs (Series 1986A)/
(Good Samaritan Hospital) A-1 7,000,000
--------------------------------------------------------
3,000,000 Hamilton County, OH, Sewer System Improvement and
Revenue Bonds Weekly VRDNs (P-FLOATS)/
(FGIC Insured), R VMIG1 3,000,000
--------------------------------------------------------
2,500,000 Hamilton, OH, 2.82% LT GO BANs, 6/17/94 NR(3) 2,500,061
--------------------------------------------------------
1,300,000 Hamilton, OH, 2.96%, 9/2/94 NR(3) 1,300,168
--------------------------------------------------------
760,000 Hillsboro, OH, IDR Weekly VRDNs (Series 1987)/
(TD Manufacturing Ltd.)/(Sanwa Bank Ltd. LOC)/
(Subject to AMT) VMIG1 760,000
--------------------------------------------------------
2,000,000 Holmes County, OH, IDA Weekly VRDNs (Poultry Processing,
Inc.)/(Rabobank Nederland LOC)/
(Subject to AMT) A-1+ 2,000,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 300,000 Kettering, OH, IDA Weekly VRDNs (Center-Plex
Venture, Inc.)/(Society National Bank LOC) P-1 $ 300,000
--------------------------------------------------------
1,735,000 Lake County, OH, 2.93% BANs, 10/13/94 NR(2) 1,735,988
--------------------------------------------------------
3,570,000 Lucas County, OH, 3.60% GO BANs, 12/15/94 NR 3,578,630
--------------------------------------------------------
325,000 Lucas County, OH, Health Care Improvement Weekly VRDNs
(Sunshine Children's Home)/(National City Bank,
Cleveland LOC) P-1 325,000
--------------------------------------------------------
2,150,000 Lucas County, OH, Hospital Facility Improvement Revenue
Bonds Weekly VRDNs (Series 93)/(Lott Industries, Inc.)/
(National City Bank LOC) P-1 2,150,000
--------------------------------------------------------
2,000,000 Lucas County, OH, IDA Weekly VRDNs (Kuhlman Corp.)/
(Society National Bank LOC) P-1 2,000,000
--------------------------------------------------------
3,000,000 Lucas County, OH, Various Purpose Improvement Notes,
3.87% BANs (Series 1993-1), 8/18/94 NR(4) 3,003,198
--------------------------------------------------------
120,000 Mahoning County, OH, IDR Weekly VRDNs (Tru-Cut Die
Corp.)/(PNC Bank, Ohio N.A. LOC)/(Subject to AMT) P-1 120,000
--------------------------------------------------------
5,325,000 Mahoning County, OH, Multifamily HFA Weekly VRDNs
(International Towers Inc.)/(PNC Bank N.A. LOC)/
(Subject to AMT) A-1 5,325,000
--------------------------------------------------------
1,525,000 Mansfield, OH, IDR Weekly VRDNs (Designed Metal
Products, Inc.)/(Bank One, Indianapolis LOC)/
(Subject to AMT) P-1 1,525,000
--------------------------------------------------------
2,000,000 Mason City, OH, Sewer System, 3.47% BANs (Series 1994),
9/15/94 NR(3) 2,001,979
--------------------------------------------------------
1,000,000 Massillon, OH, 3.13% BANs, 10/5/94 NR(3) 1,001,799
--------------------------------------------------------
700,000 Medina County, OH, IDA Weekly VRDNs (National Metal
Abrasive, Inc.)/(Society National Bank LOC) P-1 700,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 520,000 Medina County, OH, IDR, 3.10% TOBs (Dopco Associates)/
(Bank One, Akron N.A. LOC), 9/1/94 P-1 $ 520,000
--------------------------------------------------------
750,000 Middleburg Heights, OH, 2.83% BANs, 6/2/94 NR(2) 750,147
--------------------------------------------------------
500,000 Muskingham County, OH, Hospital Facilities
Authority Weekly VRDNs (Bethesda Care Systems)/
(BancOhio National Bank LOC) VMIG1 500,000
--------------------------------------------------------
395,000 North Olmsted, OH, IDA Weekly VRDNs
(Bryant & Stratton Corp.)/(Society National Bank LOC)/
(Subject to AMT) P-1 395,000
--------------------------------------------------------
825,000 North Olmsted, OH, IDR, 2.75% Semi-Annual TOBs
(Therm-All)/(National City Bank, Cleveland LOC), 8/1/94 P-1 825,000
--------------------------------------------------------
2,285,000 Ohio Housing Finance Agency Weekly VRDNs (Westchester
Village)/(Union Bank of Switzerland LOC) P-1 2,285,000
--------------------------------------------------------
7,575,000 Ohio Housing Finance Agency, 2.65% TOBs
(Lincoln Park Association)/(Comerica, Inc. LOC), 5/2/94 P-1 7,575,000
--------------------------------------------------------
1,000,000 Ohio State Air Quality Development Authority Weekly
VRDNs (Timkin Co.)/(Credit Suisse LOC) A-1+ 1,000,000
--------------------------------------------------------
3,000,000 Ohio State Air Quality Development Authority, 2.60% CP
(Cincinnati Gas & Electric Co.)/(Morgan Bank (Delaware)
N.A. LOC), Mandatory Tender 5/16/94 A-1+ 3,000,000
--------------------------------------------------------
4,700,000 Ohio State Air Quality Development Authority, 2.60% CP
(Cleveland Electric Illuminating Co.)/(FGIC Insured),
Mandatory Tender 5/19/94 A-1+ 4,700,000
--------------------------------------------------------
1,615,000 Ohio State IDR Weekly VRDNs (Series 1991)/
(Standby Screw, Inc.)/(BancOhio National Bank LOC)/
(Subject to AMT) A-1+ 1,615,000
--------------------------------------------------------
4,260,000 Ohio State Water Development Authority Pure Water
Refunding and Improvement Bonds Weekly VRDNs (Series
PA-56)/(AMBAC Insured), R VMIG1 4,260,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 2,500,000 Ohio State Water Development Authority, 2.70% CP (Series
A)/(Cleveland Electric Illuminating Co.)/
(FGIC Insured), Mandatory Tender 6/16/94 A-1+ $ 2,500,000
--------------------------------------------------------
1,000,000 Ohio State Water PCR Bonds Weekly VRDNs
(PPG Industries) P-1 1,000,000
--------------------------------------------------------
800,000 Ohio State Weekly VRDNs (John Carroll University)/
(PNC Bank N.A. LOC) P-1 800,000
--------------------------------------------------------
1,650,000 Orrville, OH, IDA Weekly VRDNs (O.S. Associates)/
(National City Bank LOC)/(Subject to AMT) A-1 1,650,000
--------------------------------------------------------
1,000,000 Pickaway County, OH, IDA Weekly VRDNs
(PPG Industries) P-1 1,000,000
--------------------------------------------------------
460,000 Portage County, OH, IDA Weekly VRDNs
(D & W Associates)/(Society National Bank LOC) P-1 460,000
--------------------------------------------------------
455,000 Portage County, OH, IDR, 3.10% TOBs (Neidlinger
Industries)/(Society National Bank LOC), 9/1/94 P-1 455,000
--------------------------------------------------------
6,230,000 Richland County, OH, 2.96% GO BANs, 9/15/94 NR(3) 6,234,796
--------------------------------------------------------
2,100,000 Salem, OH, City School District, 2.82% UT BANs, 9/8/94 NR 2,100,870
--------------------------------------------------------
1,175,000 Shaker Heights, OH, 2.50% GO BANs, 5/26/94 NR(2) 1,175,039
--------------------------------------------------------
2,000,000 Sharonville, OH, IDR Weekly VRDNs (Xtek, Inc.)/
(Fifth Third Bank LOC)/(Subject to AMT) VMIG1 2,000,000
--------------------------------------------------------
960,000 Solon, OH, IDR Weekly VRDNs (Graphic Laminating, Inc.)/
(Society National Bank LOC) P-1 960,000
--------------------------------------------------------
1,600,000 Stark County, OH, IDR Weekly VRDNs
(Sancap Abrasives)/(Society National Bank LOC) P-1 1,600,000
--------------------------------------------------------
600,000 Student Loan Funding Corp. of Cincinnati, OH, Weekly
VRDNs (Series 1991A)/(National Westminster
Bank PLC LOC)/(Subject to AMT) VMIG1 600,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 1,440,000 Summit County, OH, 2.75% Quarterly TOBs (Matech Machine
Tool Co.)/(Bank One, Akron N.A. LOC), 8/1/94 P-1 $ 1,440,000
--------------------------------------------------------
5,220,000 Summit County, OH, 3.55% BANs (Series 1994), 12/12/94 SP-1 5,226,211
--------------------------------------------------------
3,100,000 Summit County, OH, IDR Weekly VRDNs (Maison Aine Limited
Partnership)/(Society National Bank LOC)/
(Subject to AMT) P-1 3,100,000
--------------------------------------------------------
850,000 Summit County, OH, IDR, 2.75% Semi-Annual TOBs
(Bechmer-Boyce)/(Society National Bank LOC), 7/15/94 P-1 850,000
--------------------------------------------------------
1,155,000 Summit County, OH, IDR, 3.00% TOBs (Rogers Industrial
Products, Inc.)/(Bank One, Akron N.A. LOC), 5/2/94 P-1 1,155,000
--------------------------------------------------------
855,000 Summit County, OH, IDR, 3.05% TOBs (Universal Rack &
Equipment Company)/(National City Bank,
Cleveland LOC), 9/1/94 P-1 855,000
--------------------------------------------------------
990,000 Summit County, OH, IDR, 3.10% (S.D. Meyers, Inc.)/
(Bank One, Akron N.A. LOC), 8/15/94 P-1 990,000
--------------------------------------------------------
435,000 Summit County, OH, IDR, 3.10% TOBs (Keltec, Inc.)/
(Bank One, Akron N.A. LOC), 9/1/94 P-1 435,000
--------------------------------------------------------
1,000,000 Toledo-Lucas County, OH, Port Authority IDA Weekly VRDNs
(Medusa Corporation)/(Bayerische Vereinsbank
AG LOC)/(Subject to AMT) AAA 1,000,000
--------------------------------------------------------
1,000,000 Toledo-Lucas County, OH, Port Authority, 2.45% CP
(CSX Transportation, Inc.)/(Bank of Nova Scotia LOC),
Mandatory Tender 6/16/94 A-1+ 1,000,000
--------------------------------------------------------
2,000,000 Toledo-Lucas County, OH, Port Authority, 2.45% CP
(CSX Transportation, Inc.)/(Bank of Nova Scotia LOC),
Mandatory Tender 6/20/94 A-1+ 2,000,000
--------------------------------------------------------
1,500,000 Toledo-Lucas County, OH, Port Authority, 2.70% CP
(CSX Transportation, Inc.)/(Bank of Nova Scotia LOC),
Mandatory Tender 5/16/94 A-1+ 1,500,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
----------- -------------------------------------------------------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
----------------------------------------------------------------------
OHIO--CONTINUED
--------------------------------------------------------
$ 1,000,000 Trumbull County, OH, IDA Weekly VRDNs (Series 1989)/
(McDonald Steel, Inc.)/(PNC Bank N.A. LOC)/
(Subject to AMT) A-1 $ 1,000,000
--------------------------------------------------------
5,530,000 Trumbull County, OH, Sewer District, 4.125% LT GO BANs
(Series 1993), 8/11/94 NR 5,534,941
--------------------------------------------------------
2,850,000 Trumbull County, OH, Weekly VRDNs (Community Skilled
Center of Warren, Ohio)/(PNC Bank N.A. LOC) P-1 2,850,000
--------------------------------------------------------
500,000 Trumbull County, OH, Weekly VRDNs (Community Skilled
Center of Warren, Ohio)/(PNC Bank N.A. LOC) P-1 500,000
--------------------------------------------------------
1,300,000 West Carrollton City, OH, 2.87% BANs, 11/17/94 NR 1,300,486
--------------------------------------------------------
4,300,000 Westlake, OH, IDR Weekly VRDNs (Kahal Limited
Partnership)/(Society National Bank LOC)/
(Subject to AMT) P-1 4,300,000
--------------------------------------------------------
1,800,000 Wood County, OH, Weekly VRDNs (Principle Business
Enterprises)/(National City Bank LOC)/(Subject to AMT) P-1 1,800,000
-------------------------------------------------------- ------------
Total 186,532,510
-------------------------------------------------------- ------------
PUERTO RICO--0.8%
--------------------------------------------------------
1,600,000 Government Development Bank of Puerto Rico Weekly VRDNs
(Credit Suisse and Sumitomo Bank Ltd. LOCs) A-1+ 1,600,000
-------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST) $188,132,510+
-------------------------------------------------------- ------------
</TABLE>
+ Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($189,947,681) at April 30, 1994.
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
BANs -- Bond Anticipation Notes
CP -- Commercial Paper
FGIC -- Financial Guaranty Insurance Company
GO -- General Obligation
HFA -- Housing Finance Authority/Agency
IDA -- Industrial Development Authority
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bonds
LOC -- Letter of Credit
LOCs -- Letters of Credit
LT -- Limited Tax
PCR -- Pollution Control Revenue
R -- Denotes restricted securities which are subject to restrictions on resale under
Federal securities laws. These securities are considered liquid under criteria
established by the Board of Trustees.
TOBs -- Tender Option Bonds
UT -- Utah/Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
-------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $188,132,510
-------------------------------------------------------------------------------
Cash 614,938
-------------------------------------------------------------------------------
Interest receivable 1,389,845
-------------------------------------------------------------------------------
Deferred expenses (Note 2E) 30,215
------------------------------------------------------------------------------- ------------
Total assets 190,167,508
-------------------------------------------------------------------------------
LIABILITIES:
--------------------------------------------------------------------
Dividends payable $112,584
--------------------------------------------------------------------
Payable to distributor (Note 4) 31,190
--------------------------------------------------------------------
Payable to transfer and dividend disbursing agent (Note 4) 11,120
--------------------------------------------------------------------
Accrued expenses 64,933
-------------------------------------------------------------------- --------
Total liabilities 219,827
------------------------------------------------------------------------------- ------------
NET ASSETS for 189,947,681 shares of beneficial interest outstanding $189,947,681
------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
-------------------------------------------------------------------------------
Institutional Shares ($61,857,919 / 61,857,919 shares of beneficial interest
outstanding) $1.00
------------------------------------------------------------------------------- ------------
Cash II Shares ($128,089,762 / 128,089,762 shares of beneficial interest
outstanding) $1.00
------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------
Interest income (Note 2B) $2,727,482
---------------------------------------------------------------------------------
EXPENSES:
---------------------------------------------------------------------------------
Investment advisory fee (Note 4) $408,602
----------------------------------------------------------------------
Administrative personnel and services (Note 4) 151,884
----------------------------------------------------------------------
Custodian and portfolio accounting fees 52,494
----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 23,814
----------------------------------------------------------------------
Fund share registration costs 20,656
----------------------------------------------------------------------
Trustees' fees 2,000
----------------------------------------------------------------------
Auditing fees 9,823
----------------------------------------------------------------------
Legal fees 7,000
----------------------------------------------------------------------
Printing and postage 12,000
----------------------------------------------------------------------
Distribution services fees (Note 4) 199,898
----------------------------------------------------------------------
Insurance premiums 2,872
----------------------------------------------------------------------
Miscellaneous 8,363
---------------------------------------------------------------------- --------
Total expenses 899,406
----------------------------------------------------------------------
Deduct--Waiver of investment advisory fee (Note 4) 153,855
---------------------------------------------------------------------- --------
Net expenses 745,551
--------------------------------------------------------------------------------- ----------
Net investment income $1,981,931
--------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------
1994* 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
--------------------------------------------------------------
OPERATIONS--
--------------------------------------------------------------
Net investment income $ 1,981,931 $ 4,284,001
-------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
--------------------------------------------------------------
Dividends to shareholders from net investment income:
--------------------------------------------------------------
Institutional Shares (758,544) (1,570,539)
--------------------------------------------------------------
Cash II Shares (1,223,387) (2,713,462)
-------------------------------------------------------------- ------------- -------------
Change in net assets from distributions to shareholders (1,981,931) (4,284,001)
-------------------------------------------------------------- ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
--------------------------------------------------------------
Proceeds from sale of shares 362,487,574 647,552,523
--------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 1,230,307 2,703,916
--------------------------------------------------------------
Cost of shares redeemed (382,535,725) (649,710,289)
-------------------------------------------------------------- ------------- -------------
Change in net assets from Fund share transactions (18,817,844) 546,150
-------------------------------------------------------------- ------------- -------------
Change in net assets (18,817,844) 546,150
--------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------
Beginning of period 208,765,525 208,219,375
-------------------------------------------------------------- ------------- -------------
End of period $ 189,947,681 $ 208,765,525
-------------------------------------------------------------- ------------- -------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH II SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------
1994* 1993 1992 1991**
----- ----- ----- ------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
-----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-----------------------------------------------
Net investment income 0.01 0.02 0.03 0.02
----------------------------------------------- ---- ----- ----- ------
LESS DISTRIBUTIONS
-----------------------------------------------
Dividends to shareholders from net investment
income (0.01) (0.02) (0.03) (0.02 )
----------------------------------------------- ---- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
----------------------------------------------- ---- ----- ----- ------
TOTAL RETURN*** 0.91 % 2.02% 2.90% 2.27 %
-----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------------
Expenses 0.83 %(b) 0.78% 0.76% 0.63 %(b)
-----------------------------------------------
Net investment income 1.84 %(b) 2.01% 2.86% 4.18 %(b)
-----------------------------------------------
Expense waiver/reimbursement(a) 0.15 %(b) 0.19% 0.25% 0.34 %(b)
-----------------------------------------------
SUPPLEMENTAL DATA
-----------------------------------------------
Net assets, end of period (000 omitted) $128,090 $127,017 $133,877 $94,081
-----------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from April 22, 1991 (date of initial
public investment) to October 31, 1991.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------
1994* 1993 1992 1991**
----- ----- ----- ------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
-----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-----------------------------------------------
Net investment income 0.01 0.02 0.03 0.02
----------------------------------------------- ---- ----- ----- ------
LESS DISTRIBUTIONS
-----------------------------------------------
Dividends to shareholders from net investment
income (0.01) (0.02) (0.03) (0.02 )
----------------------------------------------- ---- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
----------------------------------------------- ---- ----- ----- ------
TOTAL RETURN*** 1.06 % 2.33% 3.21% 2.40 %
-----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------------
Expenses 0.53 %(b) 0.48% 0.46% 0.35 %(b)
-----------------------------------------------
Net investment income 2.14 %(b) 2.30% 3.10% 4.46 %(b)
-----------------------------------------------
Expense waiver/reimbursement(a) 0.15 %(b) 0.19% 0.25% 0.32 %(b)
-----------------------------------------------
SUPPLEMENTAL DATA
-----------------------------------------------
Net assets, end of period (000 omitted) $61,858 $81,748 $74,342 $44,771
-----------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from April 22, 1991 (date of initial
public investment) to October 31, 1991.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of Ohio Municipal Cash Trust (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 Fund provides two classes of shares ("Institutional Shares" and "Cash II
Shares"). Cash II Shares are identical in all respects to Institutional Shares
except that Cash II Shares will be sold pursuant to a distribution plan ("Plan")
adopted in accordance with Investment Company Act Rule 12b-1.
(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 (GAAP).
<TABLE>
<S> <C>
A. 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 Investment Company Act of
1940.
Since the Fund invests a substantial portion of its assets in issuers located in one
state, it will be more susceptible to factors adversely affecting issuers of that state,
than would be a comparable general tax-exempt mutual fund. In order to reduce the risk
associated with such factors, at April 30, 1994, 66.4% of the securities in the
portfolio of investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The aggregate
percentages by financial institutions and agencies ranged from 0.06% to 10.6% of total
investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount are amortized as required by the Internal Revenue Code,
as amended ("Code"). Distributions to shareholders are recorded on the ex-dividend date.
C. 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 taxable income. Accordingly, no provisions for federal tax are
necessary.
D. 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
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense of registering the
shares, have been deferred and are being amortized using the straight-line method over a
period of five years from the Fund's commencement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only be resold upon
registration under Federal securities law 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
Trustees. The Fund will not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7 under the
Investment Company of 1940. Additional information on each restricted security held at
April 30, 1994, is as follows:
</TABLE>
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
---------------------------------------------------- -------------------- -------------
<S> <C> <C>
Hamilton County, OH, Sewer System Improvement
and Revenue Bonds 7/1/93 $3,000,000
Ohio State Water Development Authority-
Pure Water Refunding and Improvement Bonds 12/27/93 and 1/28/94 $4,260,000
G. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1994, capital paid-in aggregated $189,947,681.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------
1994* 1993
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES
----------------------------------------------------------------
Shares sold 121,990,670 222,190,842
----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 37,339 60,099
----------------------------------------------------------------
Shares redeemed (141,918,269) (214,844,892)
---------------------------------------------------------------- ------------ ------------
Net change resulting from Fund share transactions (19,890,260) 7,406,049
---------------------------------------------------------------- ------------ ------------
CASH II SHARES
----------------------------------------------------------------
Shares sold 240,496,904 425,361,681
----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 1,192,968 2,643,817
----------------------------------------------------------------
Shares redeemed (240,617,456) (434,865,397)
---------------------------------------------------------------- ------------ ------------
Net change resulting from Fund share transactions 1,072,416 (6,859,899)
---------------------------------------------------------------- ------------ ------------
</TABLE>
* Six months ended April 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .40 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION AND SERVICE PLAN--The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the terms of the Plan, the Trust will compensate Federated Securities Corp.
("FSC"), the principal distributor, from the net assets of the Trust to finance
activities intended to result in the sale of the Trust's Cash II Shares. The
Plan provides
OHIO MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
that the Trust may incur distribution expenses up to .30 of 1% of the average
daily net assets of the Cash II Shares, annually, to compensate FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS") the Fund will pay FSS up to .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
personal services for shareholders and the maintenance of shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The fee is based on the size, type and number of accounts and transactions made
by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($37,324) and start-up
administrative service expenses ($40,612) were borne initially by Adviser. The
Fund has agreed to reimburse Adviser at an annual rate of .005 of 1% of average
daily net assets and .01 of 1% of average daily net assets for organizational
and start-up administrative expenses, respectively, until expenses initially
borne by Adviser are fully reimbursed or the expiration of five years after
April 24, 1991, date the Fund's portfolio first became effective, whichever
occurs earlier. For the six months ended April 30, 1994, the Fund paid $5,225
and $3,896, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $130,550,000 and $131,050,000, respectively. These purchases and sales were
conducted on an arms length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fees or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
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.
VIRGINIA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
[LOGO]
FEDERATED SECURITIES CORP.
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
G00133-01 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Virginia
Municipal Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the
"Trust"), for the six-month period from November 1, 1993 through April 30, 1994.
This Report includes an interview with the portfolio manager about economic
factors affecting the Fund, followed by Financial Statements containing the
Fund's Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
double-tax-free income-- free from federal regular income tax and Virginia state
income tax**--through a portfolio concentrated in high-quality, short-term
Virginia municipal securities. As a shareholder in the Fund, you have the
opportunity to earn a greater after-tax yield than you could in a comparable
high-quality taxable investment.
From the first day to the last day of the report period, the Fund's total net
assets virtually tripled, increasing from more than $52 million to more than
$156 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as education, health care, housing, mass transit, and
public utilities. Through these bonds, the Fund paid more than $1.2 million in
dividends to all shareholders during the report period.\
As a tax-sensitive Virginia resident, you can rely on the Fund to seek the best
tax-free income opportunities for your cash. As always, we will continue to
provide you with the highest level of professional service. We appreciate you
support and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1994
* As a money market mutual fund, the Fund is managed to pursue a stable share
price of $1.00, although there is no guarantee that it will do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax.
\ Please note that this report includes financial highlights for both
Institutional and Institutional Service Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Funds' Portfolio Manager, Jeff A. Kozemchak, CFA
Q What has happened to interest rates and the municipal money markets over
the report period?
A Throughout most of last year, economic numbers continued to be more anemic
than anticipated and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%.
The municipal money market reacted with a corresponding back-up in rates, which
was somewhat exacerbated by $3.2 billion of new fixed-rate supply offered by the
State of California in mid-February. With renewed concerns of economic recovery
and inflation, investors immediately began to demand higher liquidity premiums
to invest further out the yield curve, causing interest rates on national one-
year notes to rise to their highest levels since June, 1992. In April, the
municipal money market was affected by heavy cash outflows as investors withdrew
cash to pay tax bills. Also, in mid-April and mid-May the Fed tightened twice,
moving the Federal funds rate target from 3.50% to 4.25%.
Q How are you managing the Fund to capitalize on this interest rate
environment?
A Unlike most of last year, when expectations of stable to lower interest
rates were commonplace, we now are in an environment of rising interest
rate expectations. For most of last year, I maintained a longer average
maturity in the Fund to take advantage of the yield premium available on
fixed-rate notes and commercial paper relative to variable rate demand notes.
Since November, 1993, I have allowed the average maturity of the Fund to
decrease from 68 days to 43 days at the end of April, 1994. A shorter average
maturity, combined with a higher percentage of liquid variable rate demand
notes, will allow the Fund to be even more responsive to an increasing rate
environment.
Q Jeff, how has the Fund performed over the period?
A For the six-month period ending April 30, 1994, the Fund had an annualized
total return of 2.41% for the Institutional Shares and 2.31% for the
Institutional Service Shares.* For a Virginia resident in the highest
federal and state brackets, this was equivalent to taxable returns of 4.41% and
4.23%, respectively. These numbers illustrate the attractiveness of the Fund
relative to taxable investments.
Q Going forward, what is your outlook for the tax-free money markets and the
Fund?
A I believe that interest rates will continue to rise over the year, and that
the Federal funds rate target will be 4.25% to 4.50% by mid-year and 4.75%
or higher by year-end. In a rising interest rate environment, stable net
asset value money market funds like the Fund are a key component in any strategy
to preserve principal value. The Fund's yield should continue to rise as
interest rates rise. Also, I continue to expect that tax-free cash vehicles like
the Fund will continue to outperform taxable money fund alternatives as they
have over the past several years. If interest rates continue to rise this year,
I will keep the average maturity short and the portfolio liquid, while choosing
carefully and selectively along the yield curve as attractive fixed-rate
opportunities appear.
* Performance quoted represents past performance and is not indicative of future
returns.
VIRGINIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
<C> <S> <C> <C>
------------- -------------------------------------------------------------------- ----------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--99.8%
-----------------------------------------------------------------------------------
DISTRICT OF COLUMBIA--1.6%
--------------------------------------------------------------------
$ 2,500,000 Washington, DC, Metropolitan Transit Authority, 2.75% SB (FGIC
Insured), 7/1/94 (100% VA Exempt) NR(1) $ 2,500,401
-------------------------------------------------------------------- ---------------
PUERTO RICO--6.7%
--------------------------------------------------------------------
6,500,000 Commonwealth of Puerto Rico, 3.00% TRANs (Series 1994A), 7/29/94 SP-1+ 6,506,011
--------------------------------------------------------------------
1,400,000 Government Development Bank of Puerto Rico Weekly VRDNs (Credit
Suisse and Sumitomo Bank Ltd. LOCs) A-1 1,400,000
--------------------------------------------------------------------
2,600,000 Puerto Rico Industrial Medical and Environment Pollution Control
Finance Authority Weekly VRDNs (Ana G. Mendez Educational
Foundation)/(Bank of Tokyo Ltd. LOC) A-1 2,600,000
-------------------------------------------------------------------- ---------------
Total 10,506,011
-------------------------------------------------------------------- ---------------
VIRGINIA--91.5%
--------------------------------------------------------------------
1,000,000 Alexandria, VA, IDA Weekly VRDNs (American Red Cross)/(Sanwa Bank
Ltd. LOC) A-1+ 1,000,000
--------------------------------------------------------------------
6,000,000 Alexandria, VA, Redevelopment and Housing Authority Weekly VRDNs
(Crystal City Apartments)/(Safeco Insurance Co. of America
Insured)/(Sumitomo Bank BPA)/(Subject to AMT) A-1 6,000,000
--------------------------------------------------------------------
2,400,000 Amelia County, VA, IDA Weekly VRDNs (Series 1991)/ (Chambers Waste
Systems)/NationsBank of North
Carolina N.A. LOC)/(Subject to AMT) VMIG1 2,400,000
--------------------------------------------------------------------
2,000,000 Arlington County, VA, 3.60% BANs, 8/1/94 SP-1+ 2,004,443
--------------------------------------------------------------------
3,500,000 Arlington County, VA, Weekly VRDNs (Ballston Public
Parking)/(Citibank N.A. LOC) A-1 3,500,000
--------------------------------------------------------------------
1,440,000 \\Chesapeake Bay Bridge & Tunnel District, VA, General
Resolution Revenue Bonds Weekly VRDNs (P-Floats)/(Series 1991)/
(MBIA Insured) VMIG1 1,440,000
--------------------------------------------------------------------
1,000,000 Chesapeake, VA, IDA Weekly VRDNs (Series 1985)/
(Virginia Electric Power Co.) A-1 1,000,000
--------------------------------------------------------------------
1,900,000 Chesapeake, VA, IDA Weekly VRDNs (Series 1986)/ (Volvo of America,
Inc.)/(Union Bank of Switzerland LOC)/(Subject to AMT) P-1 1,900,000
--------------------------------------------------------------------
2,000,000 Chesapeake, VA, IDA Weekly VRDNs (Series 1988)/ (Sumitomo Machinery
Corp. of America)/(Sumitomo Bank Ltd. LOC)/(Subject to AMT) VMIG1 2,000,000
--------------------------------------------------------------------
1,500,000 Chesterfield County, VA, IDA Weekly VRDNs (Series 1987A)/(Virginia
Electric Power Co.)/CP A-1 1,500,000
--------------------------------------------------------------------
2,512,500 Dinwiddie County, VA, IDA Weekly VRDNs (Tindall
Concrete VA Inc. Project)/(First Union National Bank,
Charlotte LOC)/(Subject to AMT) P-1 2,512,500
--------------------------------------------------------------------
1,440,000 Fairfax County, VA, EDA Weekly VRDNs (Series 1993)/ (Future
Homemakers of America)/(NationsBank of Virginia N.A. LOC) P-1 1,440,000
--------------------------------------------------------------------
1,050,000 Fairfax County, VA, EDA Weekly VRDNs (William Byrd
Press)/(NationsBank of Virginia N.A. LOC) VMIG1 1,050,000
--------------------------------------------------------------------
10,000,000 Fairfax County, VA, Housing Authority Weekly VRDNs (Chase Commons
Associates)/(Bankers Trust Company LOC) VMIG1 10,000,000
--------------------------------------------------------------------
1,500,000 Fairfax County, VA, IDA Weekly VRDNs (Fairfax Hospital System,
Inc.)/(Dai-Ichi Kangyo Bank Ltd. LOC) A-1+ 1,500,000
--------------------------------------------------------------------
5,000,000 Fairfax County, VA, IDA, 2.75% CP (Series 1993B)/(Inova Health
System Guaranty), Mandatory Tender 8/19/94 A-1+ 5,000,000
--------------------------------------------------------------------
2,340,000 \\Fairfax County, VA, Water Authority Revenue Bonds Weekly VRDNs
(P-FLOATS)/(Series 1992) VMIG1 2,340,000
--------------------------------------------------------------------
3,000,000 Falls Church, VA, IDA, 2.65% (Series 1985)/(Kaiser
Permanente Medical Care Guaranty), 5/1/94 A-1+ 3,000,000
--------------------------------------------------------------------
1,000,000 Falls Church, VA, IDA, 3.15% Semi-Annual TOBs (Kaiser Permanente
Medical Care Guaranty), 11/1/94 P-1 1,000,000
--------------------------------------------------------------------
3,100,000 Fauquier County, VA, IDA Weekly VRDNs (Warrenton
Development Co.)/(NationsBank of Maryland N.A. LOC) P-1 3,100,000
--------------------------------------------------------------------
1,300,000 Greensville County, VA, IDA Daily VRDNs (Purdue Farms, Inc.)/(Morgan
Guaranty Trust Co. LOC)/(Subject to AMT) A-1+ 1,300,000
--------------------------------------------------------------------
4,000,000 Halifax County, VA, IDA, MMMs, 2.80% CP (Virginia Electric Power Co.
Guaranty)/(Subject to AMT), Mandatory Tender 7/14/94 A-1 4,000,000
--------------------------------------------------------------------
4,000,000 Halifax County, VA, IDA, MMMs, PCR, 3.10% CP (Virginia Electric
Power Co. Guaranty)/(Subject to AMT), Mandatory Tender 8/11/94 A-1 4,000,000
--------------------------------------------------------------------
3,500,000 Halifax County, VA, IDA, MMMs, PCR, 3.10% CP (Virginia Electric
Power Co. Guaranty)/(Subject to AMT), Mandatory Tender 8/16/94 A-1 3,500,000
--------------------------------------------------------------------
2,725,000 Lynchburg, VA, 3.80% BANs, 2/1/95 SP-1+ 2,738,948
--------------------------------------------------------------------
2,500,000 Newport News, VA, GO Weekly VRDNs (Series 1993E)/ (Canadian Imperial
Bank of Commerce) A-1+ 2,500,000
--------------------------------------------------------------------
3,000,000 Newport News, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series 1990)/(Fredericksburg-Oxford)/ (Bankers Trust Co. LOC) VMIG1 3,000,000
--------------------------------------------------------------------
2,225,000 Norfolk, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series 1990)/(St. Paul's Associates, L.P.)/
(NationsBank of Virginia N.A. LOC) P-1 2,225,000
--------------------------------------------------------------------
1,070,000 Norfolk, VA, Water Revenue Bonds, 2.80% SB (Series 1993), 11/1/94 NR(3) 1,070,000
--------------------------------------------------------------------
3,000,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series 1989)/(Belmont Apartments)/
(NationsBank of North Carolina N.A. LOC) P-1 3,000,000
--------------------------------------------------------------------
3,200,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series B)/(Tobacco Row)/(Bayerische
Landesbank LOC)/(Subject to AMT) VMIG1 3,200,000
--------------------------------------------------------------------
1,950,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series B-7)/(Bayerische Landesbank
LOC)/(Subject to AMT) VMIG1 1,950,000
--------------------------------------------------------------------
3,555,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series B-8)/(Bayerische Landesbank
LOC)/(Subject to AMT) VMIG1 3,555,000
--------------------------------------------------------------------
1,000,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series B-9)/(Tobacco Row)/(Bayerische
Landesbank LOC) VMIG1 1,000,068
--------------------------------------------------------------------
2,000,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series B6)/(Tobacco Row)/(Bayerische
Landesbank LOC)/(Subject to AMT) VMIG1 2,000,000
--------------------------------------------------------------------
2,800,000 Richmond, VA, Redevelopment and Housing Authority Weekly VRDNs
(Series B6)/(Tobacco Row)/(Bayerische
Landesbank LOC)/(Subject to AMT) VMIG1 2,800,000
--------------------------------------------------------------------
3,105,000 Suffolk, VA, Redevelopment and Housing Authority
Weekly VRDNs (Series 1994)/(Terry Peterson Associates
II)/(NationsBank of Virginia N.A. LOC) P-1 3,105,000
--------------------------------------------------------------------
2,000,000 Suffolk, VA, Redevelopment and Housing Authority
Weekly VRDNs (Terry Peterson Development Corp.)/
(NationsBank of Virginia N.A. LOC) P-1 2,000,000
--------------------------------------------------------------------
2,710,000 Tazewell County, VA, IDA Weekly VRDNs (Series 1993)/ (Seville
Properties Bluefield L.P.)/(Huntington National Bank, Columbus LOC) P-1 2,710,000
--------------------------------------------------------------------
3,870,000 Virginia College Building Authority, 3.95% Serial Bonds (Series
1994)/(Equipment Leasing Program), 8/1/94 AA 3,879,849
--------------------------------------------------------------------
1,000,000 Virginia Education Loan Authority, 3.45% SB (Series B),
3/1/95 AAA 1,000,000
--------------------------------------------------------------------
9,500,000 Virginia Housing Development Authority Weekly VRDNs (Series
1987A)/(AHC Service Corp.)/(Mitsubishi Bank Ltd. LOC) P-1 9,500,000
--------------------------------------------------------------------
5,800,000 Virginia Peninsula Port Authority Daily VRDNs (Kinyo
Virginia, Inc.)/(Industrial Bank of Japan Ltd. LOC)/
(Subject to AMT) A-1 5,800,000
--------------------------------------------------------------------
1,000,000 Virginia Peninsula Port Authority, Facility Revenue
Refunding Bonds, 2.60% CP (CSX Transportation, Inc.)/
(Bank of Nova Scotia LOC), Mandatory Tender 5/17/94 VMIG1 1,000,000
--------------------------------------------------------------------
3,500,000 Virginia Peninsula Port Authority, Facility Revenue
Refunding Bonds, 2.60% CP (Series 1992)/(CSX Transportation,
Inc.)/(Bank of Nova Scotia LOC), Mandatory Tender 5/19/94 VMIG1 3,500,000
--------------------------------------------------------------------
2,000,000 Virginia Peninsula Port Authority, Facility Revenue
Refunding Bonds, 2.50% CP (CSX Transportation, Inc.)/
(Bank of Nova Scotia LOC), Mandatory Tender 7/20/94 VMIG1 2,000,000
--------------------------------------------------------------------
400,000 Virginia Resources Authority Water and Sewer System Revenue Bonds,
2.85% SB (Washington County VA Service Authority), 10/1/94 AA 400,000
--------------------------------------------------------------------
2,000,000 Virginia State University, 2.40% Revenue Refunding Bonds, (Series
D)/(Medical College of Virginia Hospital Guaranty), 7/1/94 NR(2) 2,000,000
--------------------------------------------------------------------
4,000,000 Virginia State, HDA, 2.65% Annual TOBs, 12/15/94 A-1+ 4,000,000
--------------------------------------------------------------------
1,000,000 Virginia State, HDA, 2.85% Semi-Annual TOBs (Series C), Mandatory
Tender 8/10/94 A-1+ 1,000,000
--------------------------------------------------------------------
5,507,000 Williamsburg, VA, IDA Weekly VRDNs (Series 1988)/
(Colonial Williamsburg Foundation Museum)/(Sanwa Bank
Ltd. LOC) P-1 5,507,000
-------------------------------------------------------------------- ---------------
Total 142,927,808
-------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS (AT AMORTIZED COST) (NOTE 2A) $ 155,934,220\
-------------------------------------------------------------------- ---------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional
Information for an explantion of the credit ratings.
\ Also represents cost for federal tax purposes.
\\ Denotes restricted security (Note 2F).
Note: The categories of investments are shown as a percentage of net asets
($156,166,826) at April 30, 1994.
The following abbreviations are used in this portfolio:
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
CP--Commercial Paper
EDA--Economic Development Authority
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
HDA--Hospital Development Authority
IDA--Industrial Development Authority
LOC--Letter of Credit
LOCs--Letters of Credit
MBIA--Municipal Bond Investors Assurance
MMMs--Money Market Municipals
PCR--Pollution Control Revenue
SB--Serial Bond
TOBs--Tender Option Bonds
TRANs--Tax Revenue Anticipation Notes
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $ 155,934,220
------------------------------------------------------------------------------------------------
Cash 2,033,929
------------------------------------------------------------------------------------------------
Interest receivable 739,676
------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 617
------------------------------------------------------------------------------------------------
Prepaid/deferred expenses (Note 2E) 81,215
------------------------------------------------------------------------------------------------ ---------------
Total assets 158,789,657
------------------------------------------------------------------------------------------------
LIABILITIES:
------------------------------------------------------------------------------------------------
Payable for investments purchased $ 2,502,346
---------------------------------------------------------------------------------
Dividends payable 49,681
---------------------------------------------------------------------------------
Accrued expenses 70,804
--------------------------------------------------------------------------------- -------------
Total liabilities 2,622,831
------------------------------------------------------------------------------------------------ ---------------
NET ASSETS for 156,166,826 shares of beneficial interest outstanding $ 156,166,826
------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
------------------------------------------------------------------------------------------------
Institutional Service Shares ($140,200,076 / 140,200,076 shares
of beneficial interest outstanding) $1.00
------------------------------------------------------------------------------------------------ ---------------
Institutional Shares ($15,966,750 / 15,966,750 shares of beneficial interest outstanding)
$1.00
------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 1,386,774
---------------------------------------------------------------------------------------------------
EXPENSES:
---------------------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 216,638
--------------------------------------------------------------------------------------
Administrative personnel and services fees (Note 4) 57,853
--------------------------------------------------------------------------------------
Custodian and portfolio accounting fees 9,461
--------------------------------------------------------------------------------------
Shareholder services fees (Note 4) 61,141
--------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses (Note 4) 4,609
--------------------------------------------------------------------------------------
Fund share registration costs 4,959
--------------------------------------------------------------------------------------
Printing and postage 8,500
--------------------------------------------------------------------------------------
Legal fees 8,000
--------------------------------------------------------------------------------------
Miscellaneous 200
-------------------------------------------------------------------------------------- -----------
Total expenses 371,361
--------------------------------------------------------------------------------------
Deduct--
--------------------------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 216,638
-------------------------------------------------------------------------
Reimbursement of other operating expenses by Adviser
(Note 4) 25,000 241,638
------------------------------------------------------------------------- ----------- -----------
Net expenses 129,723
--------------------------------------------------------------------------------------------------- -------------
Net investment income $ 1,257,051
--------------------------------------------------------------------------------------------------- -------------
(See Notes which are an integral part of the Financial Statements)
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
1994* 1993**
INCREASE (DECREASE) IN NET ASSETS:
------------------------------------------------------------------------------
OPERATIONS--
------------------------------------------------------------------------------
Net investment income $ 1,257,051 $ 139,261
------------------------------------------------------------------------------ ---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
------------------------------------------------------------------------------
Dividends to shareholders from net investment income:
------------------------------------------------------------------------------
Institutional Service Shares (1,119,481) (124,823)
------------------------------------------------------------------------------
Institutional Shares (137,570) (14,438)
------------------------------------------------------------------------------ ---------------- ---------------
Change in net assets from distributions to shareholders (1,257,051) (139,261)
------------------------------------------------------------------------------ ---------------- ---------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
------------------------------------------------------------------------------
Proceeds from sale of shares 538,963,878 122,368,804
------------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 992,954 95,476
------------------------------------------------------------------------------
Cost of shares redeemed (436,648,277) (69,606,009)
------------------------------------------------------------------------------ ---------------- ---------------
Change in net assets from Fund share transactions 103,308,555 52,858,271
------------------------------------------------------------------------------ ---------------- ---------------
Change in net assets 103,308,555 52,858,271
------------------------------------------------------------------------------
NET ASSETS:
------------------------------------------------------------------------------
Beginning of period 52,858,271 --
------------------------------------------------------------------------------ ---------------- ---------------
End of period $ 156,166,826 $ 52,858,271
------------------------------------------------------------------------------ ---------------- ---------------
</TABLE>
*Six months ended April 30, 1994 (unaudited).
**The period from September 16, 1993 (date of initial public investment) to
October 31, 1993.
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
1994* 1993**
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
-----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-----------------------------------------------------------------------------
Net investment income 0.01 0.003
----------------------------------------------------------------------------- --------- ---------
LESS DISTRIBUTIONS
-----------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.003)
----------------------------------------------------------------------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
----------------------------------------------------------------------------- --------- ---------
TOTAL RETURN*** 1.15% 0.34%
-----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------------------------------------------
Expenses 0.25 (b) 0.19%(b)
-----------------------------------------------------------------------------
Net investment income 2.31 (b) 2.67%(b)
-----------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.45 (b) 1.04%(b)
-----------------------------------------------------------------------------
SUPPLEMENTAL DATA
-----------------------------------------------------------------------------
Net assets, end of period (000 omitted)
$140,200
$45,648
-----------------------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from September 16, 1993 (date of initial
public investment) to October 31, 1993.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
1994* 1993**
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
-----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-----------------------------------------------------------------------------
Net investment income 0.01 0.003
----------------------------------------------------------------------------- --------- ---------
LESS DISTRIBUTIONS
-----------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.003)
----------------------------------------------------------------------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
----------------------------------------------------------------------------- --------- ---------
TOTAL RETURN*** 1.20% 0.35%
-----------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------------------------------------------
Expenses 0.15 (b) 0.09%(b)
-----------------------------------------------------------------------------
Net investment income 2.41 (b) 2.68%(b)
-----------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.45 (b) 1.04%(b)
-----------------------------------------------------------------------------
SUPPLEMENTAL DATA
-----------------------------------------------------------------------------
Net assets, end of period (000 omitted)
$15,967
$7,210
-----------------------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from September 16, 1993 (date of initial
public investment) to October 31, 1993.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of Virginia Municipal Cash Trust (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles (GAAP).
A. 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
Investment Company Act of 1940.
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state, than would be a comparable general tax
exempt mutual fund. In order to reduce the credit risk associated with such
factors, at April 30, 1994, 80.1% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The
aggregate percentages by financial institutions and agencies ranged from
0.8% to 9.3% of total investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended ("Code"). Distributions to
shareholders are recorded on the ex-dividend date.
C. 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 taxable income.
Accordingly, no provisions for federal tax are necessary.
D. WHEN-LSSUED 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under Federal securities law 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 Trustees. The Fund
will not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7 under
the Investment Company of 1940. Additional information on each restricted
security held at April 30, 1994 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Chesapeake Bay Bridge & Tunnel District, VA,
General Resolution Revenue Bonds, Weekly VRDNs 7/1/93 $ 1,440,000
Fairfax County, VA, Water Authority, Revenue Bonds,
Weekly VRDNs 10/1/93 2,340,000
</TABLE>
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1994, paid-in capital aggregated $156,166,826.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES 1994* 1993**
--------------------------------------------------------------------------------- --------------- --------------
Shares sold 515,021,988 113,204,248
---------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 984,643 95,476
---------------------------------------------------------------------------------
Shares redeemed (421,454,324) (67,651,955)
--------------------------------------------------------------------------------- --------------- --------------
Net change resulting from Fund share transactions 94,552,307 45,647,769
--------------------------------------------------------------------------------- --------------- --------------
</TABLE>
* Six months ended April 30, 1994.
** For the period from September 16, 1993 (date of initial public investment) to
October 31, 1993.
VIRGINIA MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
INSTITUTIONAL SHARES 1994* 1993**
--------------------------------------------------------------------------------- --------------- --------------
Shares sold 23,941,890 9,164,556
---------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 8,311 --
---------------------------------------------------------------------------------
Shares redeemed (15,193,953) (1,954,054)
--------------------------------------------------------------------------------- --------------- --------------
Net change resulting from Fund share transactions 8,756,248 7,210,502
--------------------------------------------------------------------------------- --------------- --------------
</TABLE>
* Six months ended April 30, 1994.
** For the period from September 16, 1993 (date of initial public investment) to
October 31, 1993.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .40 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS") the Fund will pay FSS up to .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
personal services for shareholders and the maintenance of shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The fee is based on the size, type and number of accounts and transactions made
by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($33,493) were borne initially
be Adviser. The Fund has agreed to reimburse Adviser at an annual rate of .005
of 1% of average daily net assets and .01 of 1% of average daily net assets for
organizational expenses until expenses initially borne by Adviser are fully
reimbursed or the expiration of five years after August 30, 1993, date the
Fund's portfolio first became effective, whichever occurs earlier. For the six
months ended April 30, 1994, the Fund paid $2,233 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other Funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $187,550,000 and $165,741,000, respectively. These purchases and sales were
conducted on an arms length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fees or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers or Directors of
the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not obligations of or insured by any bank nor are they
insured by the federal government or any of its agencies.
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.
MINNESOTA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
[LOGO]
FEDERATED SECURITIES CORP.
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
1052807 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Minnesota
Municipal Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the
"Trust"), for the six-month period from November 1, 1993 through April 30, 1994.
The Report includes an interview with the portfolio manager about economic
factors affecting the Fund, followed by Financial Statements containing the
Fund's Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
double-tax-free income-- free from federal regular income tax and Minnesota
personal regular income taxes**--through a portfolio concentrated in
high-quality, short-term Minnesota municipal securities. As a shareholder in the
Fund, you have the opportunity to earn a greater after-tax yield than you could
in a comparable high-quality taxable investment.
From the first day to the last day of the report period, the Fund's total net
assets increased by nearly $15 million to reach $248 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as education, health care, housing, and public
utilities. Through these bonds, the Fund paid more than $2.7 million in
dividends to all shareholders during the report period.\
As a tax-sensitive Minnesota resident, you can rely on the Fund to seek the best
tax-free income opportunities for your cash. As always, we will continue to
provide you with the highest level of professional service. We appreciate your
support and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1994
* As a money market mutual fund, the Fund is managed to pursue a stable share
price of $1.00, although there is no guarantee that it will do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax.
\ Please note that this report includes financial highlights for both Cash
Series Shares and Institutional Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Mary Jo Ochson
Q What has happened to interest rates and the municipal money markets since
our last reporting?
A Throughout most of last year, economic numbers continued to be more anemic
than anticipated, and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%. The municipal
money market reacted with a corresponding back-up in rates, which was somewhat
exacerbated by $3.2 billion of new fixed-rate supply offered by the State of
California in mid-February. With renewed concerns of economic recovery and
inflation, investors immediately began to demand higher liquidity premiums to
invest further out the yield curve, causing interest rates on national one-year
notes to rise to their highest levels since June, 1992. In April, the municipal
money market was affected by heavy cash outflows as investors withdrew cash to
pay tax bills. Also, in mid-April and mid-May the Fed tightened twice, moving
the Federal funds rate target from 3.50% to 4.25%.
Q How are you managing the portfolio in response to this interest rate
environment?
A For most of the period, I maintained a longer average maturity in the Fund
(60-70 days), to take advantage of the typical surge in issuance of
Minnesota School District Notes that occur in the first quarter of the
calendar year. Although we are in an environment of increasing interest rate
expectations, these fixed rate notes offer a significant yield premium relative
to Variable Rate Demand Notes (VRDNs). Since April, however, I have allowed the
average maturity of the Fund to slowly decrease to 58 days at the end of May. A
shorter average maturity, combined with a higher percentage of liquid VRDNs,
will allow the Fund to be even more responsive to an increasing interest rate
environment.
Q Mary Jo, how has the Fund performed over the period?
A On April 30, 1994, the Fund's annualized seven-day net yield and thirty-day
net yield for Institutional Shares and Cash Series Shares were 2.68% and
2.28%, respectively, and 2.38% and 1.98%, respectively, which is equivalent
to taxable yields of 4.85% and 4.13%, respectively, and 4.31% and 3.58%,
respectively*. These numbers illustrate the attractiveness of the Fund relative
to taxable investments.
* Performance quoted represents past performance and is not indicative of future
results.
Q Going forward, what is your outlook for the tax-free money markets and the
Fund?
A I believe that interest rates will continue to rise during the year and
that the Federal funds rate target will be 4.25% to 4.50% by mid-year and
4.75% or higher by year-end. The Fund's yield should improve if interest
rates rise (of course, Fund performance is not guaranteed). If interest rates do
in fact rise this year, I will continue to keep the average maturity short and
the portfolio liquid, while choosing carefully and selectively along the yield
curve as attractive fixed-rate opportunities appear.
Q Now let us take a few minutes to discuss the State of Minnesota. Since our
last interview, the State has received rating upgrades from two of the
three rating agencies. Would you please comment on the State's stellar
performance?
A In July, 1993, Fitch Investors Service, Inc.** raised Minnesota's general
obligation bond rating to "AAA" from "AA+"; this action allowed Minnesota
to join the ranks of only eight other states which carry a triple-A rating.
During March, 1994, Moody's Investors, Service, Inc.,** upgraded Minnesota's
general obligation bond rating to "Aa1" from "Aa." The rating agencies' actions
were not based upon any one particular event or circumstance. Rather, the
upgrades were attributable to a combination of factors that have supported
Minnesota's credit strength for some time; these include: prudent fiscal
administration, ample reserve levels, spending discipline, budgetary reform,
conservative debt management practices, and a stable and diverse economic base.
Standard & Poor's Corporation** currently rates the State's debt AA+ with a
"stable" outlook.
Q Also since our last interview, the State of Minnesota has implemented a
credit enhancement program for school districts. Would you please provide
us with some insight regarding the program?
A In August, 1993, Minnesota joined the ranks of fifteen other states which
provide support for school district bond financings through the creation of
the Minnesota School District Credit Enhancement Program. The program
establishes a standing appropriation from the State's general fund which
provides unlimited advances to avert potential defaults by qualified school
districts. Should a district covered by the program fail to notify the State of
an impending nonpayment of debt, then the paying agent for the particular bond
issuance is required to notify the State directly. This program and the
legislation associated with it has strengthened the State's oversight of school
districts. Both Moody's Investors Service, Inc., and Standard & Poor's
Corporation have reviewed the program and will assign (upon request) bond and
note ratings to program participants after ensuring an issuer's compliance with
all state program requirements. Tentative ratings for school districts
participating in the program are Aa/MIG-1 from Moody's and AA/SP-1 + from
Standard & Poor's.
** Ratings are subject to change.
MINNESOTA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT ISSUE FITCH* VALUE
<C> <S> <C> <C>
-------------- ------------------------------------------------------------------- ----------- ---------------
SHORT-TERM MUNICIPAL SECURITIES--101.3%
-----------------------------------------------------------------------------------
MINNESOTA--98.9%
-------------------------------------------------------------------
$ 4,365,000 Albert Lea, MN, ISD Pound241, 2.70% TANs (State of Minnesota
Guaranty), 3/1/95 NR(2) $ 4,365,000
-------------------------------------------------------------------
5,000,000 Anoka City, MN, 2.90% CP Solid Waste Disposal Authority (United
Power Associates)/(NRUCFC Guaranty)/(Subject to AMT), Mandatory
Tender 6/10/94 A-1 5,000,000
-------------------------------------------------------------------
3,750,000 Austin, MN, ISD Pound492, 3.15% TANs (State of Minnesota Guaranty),
9/30/94 NR(2) 3,753,019
-------------------------------------------------------------------
5,000,000 Bass Brook, MN, PCR, 2.85% CP (Minnesota Power & Light
Company)/(Mellon Bank N.A. LOC), Mandatory Tender 6/16/94 P-1 5,000,000
-------------------------------------------------------------------
2,775,000 Baudette, MN, IDR Weekly VRDNs (Series 1989)/(Reid-Rowell,
Inc.)/(NationsBank of Georgia, N.A. LOC)/ (Subject to AMT) P-1 2,775,000
-------------------------------------------------------------------
4,000,000 Becker, MN, 3.00% GO BANs (Series 1993), 10/1/94 MIG1 4,000,000
-------------------------------------------------------------------
5,000,000 Becker, MN, PCR, 2.75% CP (Series 1992A)/(Northern States Power
Company Guaranty), Mandatory Tender
8/12/94 A-1+ 5,000,000
-------------------------------------------------------------------
4,000,000 Becker, MN, PCR, 2.75% CP (Series 1993A & 1993B)/ (Northern States
Power Company Guaranty), Mandatory Tender 5/25/94 A-1+ 4,000,000
-------------------------------------------------------------------
4,000,000 Becker, MN, Temporary Solid Waste Facility, 3.25% BANs (Series
1994A)/(Liberty Paper, Inc.)/(Escrowed in Treasuries)/(Subject to
AMT), 10/1/94 MIG1 4,000,000
-------------------------------------------------------------------
5,000,000 Bloomington, MN, Multi-Family Housing Weekly VRDNs
(Crow/Bloomington Apartments)/(Citibank N.A. LOC) P-1 5,000,000
-------------------------------------------------------------------
8,265,000 Burnsville, MN, Multi-Family Housing Weekly VRDNs (Berkshire of
Burnsville)/(Sumitomo Bank Ltd. LOC) A-1 8,265,000
-------------------------------------------------------------------
1,000,000 Byron, MN, IDB Weekly VRDNs (Schmidt Printing, Inc.)/ (Norwest Bank
Minnesota LOC)/(Subject to AMT) A-1+ 1,000,000
-------------------------------------------------------------------
1,380,000 Chaska, MN, IDA Weekly VRDNs (Aeration Industries)/ (Norwest Bank
Minnesota LOC)/(Subject to AMT) A-1+ 1,380,000
-------------------------------------------------------------------
2,000,000 Coon Rapids, MN, Hospital Authority Weekly VRDNs (Series 1985)/(The
Health Central System)/(First Bank N.A. LOC) A-1 2,000,000
-------------------------------------------------------------------
5,350,000 Crystal, MN, IDA Weekly VRDNs (Crystal Gallery Mall)/ (Citibank
N.A. LOC) P-1 5,350,000
-------------------------------------------------------------------
2,540,000 Dakota County, MN, Housing & Redevelopment Authority, 3.00%
Semi-Annual TOBs (Custodial
Receipts)/(GNMA Collateralized), Optional Tender
9/1/94 NR(1) 2,540,000
-------------------------------------------------------------------
3,000,000 Dakota County, Washington County & Anoka City, MN, Housing &
Redevelopment Authority, 3.25% Annual TOBs (Series 1988)/(ETM
Insured)/(Subject to AMT), Optional Tender 3/1/95 NR(1) 3,000,000
-------------------------------------------------------------------
2,050,000 Duluth, MN, IDA Weekly VRDNs (Lake Superior Paper)/ (National
Austrialia Bank Ltd. LOC) VMIG1 2,050,000
-------------------------------------------------------------------
3,500,000 Eagan, MN, Multi-Family Housing Weekly VRDNs (Series
1992A)/(Cinnamon Ridge)/(Mellon Bank N.A. LOC) VMIG1 3,500,000
-------------------------------------------------------------------
272,692 Eden Prairie, MN, IDA Weekly VRDNs (Series 1987)/ (Minnesota Supply
Company)/(Norwest Bank Minnesota LOC) P-1 272,692
-------------------------------------------------------------------
880,000 Eden Prairie, MN, IDR PoundS-93 Weekly VRDNs (Richard W
Cohen)/(Norwest Bank Minnesota LOC) P-1 880,000
-------------------------------------------------------------------
1,400,000 Elk River, MN, Weekly VRDNs (Tescom Corp. Project)/ (Norwest Bank
Minnesota LOC)/(Subject to AMT) P-1 1,400,000
-------------------------------------------------------------------
5,000,000 Faribault, MN, IDA Weekly VRDNs (Series 1988)/(Jerome Foods,
Inc.)/(Norwest Bank Minnesota LOC) P-1 5,000,000
-------------------------------------------------------------------
2,500,000 Hubbard County, MN, Solid Waste Disposal Weekly VRDNs (Series
1990)/(Potlatch Corp.)/(Credit Suisse LOC)/(Subject to AMT) A-1+ 2,500,000
-------------------------------------------------------------------
4,220,000 Lakeville, MN, ISD Pound194, 3.00% GO TANs, 9/30/94 NR 4,220,000
-------------------------------------------------------------------
4,000,000 Maple Grove, MN, IDA Weekly VRDNs (Series 1991A)/ (Eagle Ridge
Apartment)/(Sumitomo Bank Ltd. LOC) A-1 4,000,000
-------------------------------------------------------------------
3,000,000 Maple Grove, MN, Weekly VRDNs (Series 1991B)/(Eagle Ridge
Apartment)/(First Bank N.A. LOC) A-1 3,000,000
-------------------------------------------------------------------
2,025,000 Maplewood, MN, Multi-Family Housing Weekly VRDNs (Series
1993)/(Silver Ridge)/(Federal Home Loan Bank of Chicago LOC) A-1+ 2,025,000
-------------------------------------------------------------------
2,670,000 Mendota Heights, MN, Multi-Family Revenue Bonds Weekly VRDNs
(Lexington Heights Apartments)/ (Sumitomo Bank Ltd. LOC) A-1 2,670,000
-------------------------------------------------------------------
1,500,000 Minneapolis, MN, 5.25% Serial Bonds (Escrowed in Treasuries),
11/1/94 NR(1) 1,516,548
-------------------------------------------------------------------
745,000 Minneapolis, MN, IDA Weekly VRDNs (JTJ Company)/ (First Bank N.A.
LOC) P-1 745,000
-------------------------------------------------------------------
990,000 Minneapolis, MN, Weekly VRDNs (Great River Road)/ (Bayerische
Vereinsbank BPA) VMIG1 990,000
-------------------------------------------------------------------
1,500,000 Minneapolis, MN, Weekly VRDNs (Series 1989)/(Mt. Sinai Medical
Building Association)/(Norwest Bank Minnesota LOC) A-1+ 1,500,000
-------------------------------------------------------------------
1,440,000 Minneapolis/St. Paul, MN, Housing Finance Board Revenue Bonds,
2.80% Semi-Annual TOBs (Series 1988A)/(GNMA
Collateralized)/(Subject to AMT),
8/1/94 NR(1) 1,440,000
-------------------------------------------------------------------
8,000,000 Minnesota State Commissioner of Iron Range Resources &
Rehabilitation Weekly VRDNs (Series 1991)/(Louisiana Pacific
Corp.)/(Wachovia Bank & Trust Co. LOC) P-1 8,000,000
-------------------------------------------------------------------
5,000,000 Minnesota State HFA, 2.60% Annual TOBs (Series 1993)/ (Societe
Generale, Paris LOC)/(Subject to AMT), Mandatory Tender 1/12/95 A-1 5,000,000
-------------------------------------------------------------------
1,000,000 Minnesota State Higher Education Coordinating Board Weekly VRDNs
(Student Loan Program)/(Subject to AMT) VMIG1 1,000,000
-------------------------------------------------------------------
1,000,000 Minnesota State Higher Education Coordinating Board Weekly VRDNs
(Student Loan Program)/(Subject to AMT) VMIG1 1,000,000
-------------------------------------------------------------------
1,500,000 Minnesota State Higher Education Coordinating Board Weekly VRDNs
(Supplemental Student Loan Program)/ (Series 1992A)/(Subject to
AMT) VMIG1 1,500,000
-------------------------------------------------------------------
2,700,000 Minnesota State Higher Education Coordinating Board Weekly VRDNs
(Supplemental Student Loan Program)/ (Subject to AMT) VMIG1 2,700,000
-------------------------------------------------------------------
5,000,000 Minnesota State Higher Education Facility Authority Weekly VRDNs
(Carlton College Guaranty) VMIG1 5,000,000
-------------------------------------------------------------------
3,900,000 Minnesota State Higher Education Facility Authority Weekly VRDNs
(Series 3D)/(College of St. Benedict)/ (Sumitomo Bank Ltd. LOC) VMIG1 3,900,000
-------------------------------------------------------------------
4,200,000 Minnesota State Higher Education Facility Authority Weekly VRDNs
(Supplemental Student Loan Program)/ (Mitsubishi Bank Ltd. LOC) VMIG1 4,200,000
-------------------------------------------------------------------
1,120,000 Minnesota State Weekly VRDNs P-Floats, R VMIG1 1,120,000
-------------------------------------------------------------------
3,000,000 Minnesota State, 4.90% GO Bonds, 8/1/94 NR(2) 3,014,783
-------------------------------------------------------------------
3,700,000 Minnetonka, MN, Multi-Family Housing Weekly VRDNs (Cliffs at
Ridgedale)/(Citibank, N.A. LOC) A-1 3,700,000
-------------------------------------------------------------------
2,160,000 Morehead, MN, ISD, 2.96% TANs (State of Minnesota Guaranty),
3/24/95 NR(2) 2,160,179
-------------------------------------------------------------------
1,300,000 New Brighton, MN, IDR Weekly VRDNs (Unicare Homes, Inc.)/(Banque
Paribas LOC) A-1 1,300,000
-------------------------------------------------------------------
4,000,000 New Hope, MN, Weekly VRDNs (Paddock Labs)/ (Norwest Bank Minnesota
LOC)/(Subject to AMT) P-1 4,000,000
-------------------------------------------------------------------
3,500,000 Perham, MN, IDA Weekly VRDNs (Land' O Lakes, Inc.)/ (Rabobank
Nederland LOC)/(Subject to AMT) A-1+ 3,500,000
-------------------------------------------------------------------
1,945,000 Port of Austin, MN, Weekly VRDNs (Mower House Color Co.)/(Norwest
Bank Minnesota LOC)/(Subject to AMT) P-1 1,945,000
-------------------------------------------------------------------
1,200,000 Prior Lake, MN, ISD Pound719, 3.28% TANs (Series 1994A), 3/29/95 NR 1,200,316
-------------------------------------------------------------------
4,000,000 Rochester, MN, Health Care Facility, 2.40% CP
(Series C)/(Mayo Clinic Foundation Guaranty), Mandatory Tender
5/12/94 A-1+ 4,000,000
-------------------------------------------------------------------
1,500,000 Rogers, MN, IDA Weekly VRDNs (Metal Sales Manufacturing
Corp.)/(Union Bank Switzerland LOC)/ (Subject to AMT) P-1 1,500,000
-------------------------------------------------------------------
3,950,000 Rosemount, MN, PCR Weekly VRDNs (Series 1984)/ (Koch Refining Co.
Guaranty) A-1+ 3,950,000
-------------------------------------------------------------------
12,000,000 Saint Cloud, MN, Hospital Facility Authority Weekly VRDNs (Series
1990A)/(St. Cloud Hospital)/(Kredeitbank N.V. Minnesota LOC) A-1+ 12,000,000
-------------------------------------------------------------------
300,000 Saint Louis Park, MN, GO Weekly VRDNs (Series 1987C) VMIGl 300,000
-------------------------------------------------------------------
6,000,000 Saint Paul Port Authority, MN, Tax Increment Weekly VRDNs (Series
1991)/(First Bank N.A. LOC) A-1 6,000,000
-------------------------------------------------------------------
800,000 Saint Paul, MN, Housing & Redevelopment Authority Weekly VRDNs
(Concord Green)/(First Bank N.A. LOC) P-1 800,000
-------------------------------------------------------------------
5,000,000 Saint Paul, MN, Housing & Redevelopment Authority Weekly VRDNs
(District Cooling, Inc.)/(Credit Local de France LOC)/(Subject to
AMT) A-1+ 5,000,000
-------------------------------------------------------------------
5,000,000 Saint Paul, MN, Housing & Redevelopment Authority Weekly VRDNs
(Series 1994)/(Minnesota Children's Museum)/(First Bank N.A. LOC) A-1 5,000,000
-------------------------------------------------------------------
500,000 Saint Paul, MN, Housing & Redevelopment Authority Weekly VRDNs
(United Way)/(First Bank N.A. LOC) A-1 500,000
-------------------------------------------------------------------
15,000,000 Saint Paul, MN, ISD Pound625, 3.25% TANs (Series 1994A), 3/1/1995 NR(2) 15,067,065
-------------------------------------------------------------------
6,000,000 Shakopee, MN, Hospital Finance Authority Weekly VRDNs (St. Francis
Regional Medical Center)/(Citibank N.A. LOC) A-1 6,000,000
-------------------------------------------------------------------
1,500,000 Shakopee, MN, ISD Pound720, 3.29% TANs (Series 1994),
3/30/95 NR 1,500,520
-------------------------------------------------------------------
5,800,000 South Saint Paul, MN, Housing & Redevelopment Authority Weekly
VRDNs (Health East Project)/(Series 1992)/(Sumitomo Trust and
Banking Co. Ltd. LOC) VMIG2 5,800,000
-------------------------------------------------------------------
3,000,000 Southern Minnesota, Municipal Power Agency, 2.90% CP (Series A),
Mandatory Tender 6/28/94 A-1 3,000,000
-------------------------------------------------------------------
1,135,000 Staples, MN, ISD, 3.00% GO Bonds (Series 1993),
9/10/94 NR(4) 1,135,000
-------------------------------------------------------------------
6,500,000 University of Minnesota, 2.40% Semi-Annual TOBs (Series F),
Optional Tender 8/1/94 VMIG1 6,500,000
-------------------------------------------------------------------
1,350,000 Wells, MN, 3.00% Semi-Annual TOBs (Stokely USA, Inc.)/(National
Bank of Detroit LOC)/(Subject to AMT), Mandatory Tender 6/1/94 P-1 1,350,000
-------------------------------------------------------------------
5,580,000 White Bear, MN, Weekly VRDNs (Thermoform Plastics, Inc.)/(Norwest
Bank Minnesota LOC)/(Subject to AMT) A-1+ 5,580,000
-------------------------------------------------------------------
2,000,000 Winsted, MN, IDA Weekly VRDNs (Sterner Lighting Systems)/(Fleet
National Bank LOC)/(Subject to AMT) A-1 2,000,000
------------------------------------------------------------------- ---------------
Total 245,360,122
------------------------------------------------------------------- ---------------
PUERTO RICO--2.4%
-------------------------------------------------------------------
4,000,000 Commonwealth of Puerto Rico, 3.00% TRANs (Series 1994A), 7/29/94 SP-1+ 4,003,257
-------------------------------------------------------------------
2,000,000 Government Development Bank of Puerto Rico Weekly VRDNs (Credit
Suisse and Sumitomo Bank Ltd. LOCs) A-1 2,000,000
------------------------------------------------------------------- ---------------
Total 6,003,257
------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS (AT AMORTIZED COST) (NOTE 2A) $ 251,363,379\
------------------------------------------------------------------- ---------------
</TABLE>
\ Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($248,001,686) at April 30, 1994.
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
CP--Commercial Paper
ETM--Escrowed to Maturity
GNMA--Government National Mortgage Association
GO--General Obligation
HFA--Housing Finance Authority/Agency
IDA--Industrial Development Authority
IDB--Industrial Development Bond
IDR--Industrial Development Revenue
ISD--Independent School District
LOC--Letter of Credit
NRUCFC--National Rural Utilities Cooperative Finance Corporation
PCR--Pollution Control Revenue
R--Denotes restricted securities which are subject to restrictions on resale
under Federal securities laws. These securities are considered liquid under
criteria established by the Board of Trustees.
TANs--Tax Anticipation Notes
TOBs--Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
VRDNs--Variable Rate Demand Notes
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $ 251,363,379
------------------------------------------------------------------------------------------------
Cash 1,014,250
------------------------------------------------------------------------------------------------
Interest receivable 1,136,746
------------------------------------------------------------------------------------------------
Deferred expenses (Note 2E) 5,604
------------------------------------------------------------------------------------------------ ---------------
Total assets 253,519,979
------------------------------------------------------------------------------------------------
LIABILITIES:
------------------------------------------------------------------------------------------------
Payable for investments purchased $ 5,000,000
---------------------------------------------------------------------------------
Dividends payable 323,478
---------------------------------------------------------------------------------
Payable for Fund shares redeemed 119,975
---------------------------------------------------------------------------------
Payable to Distributor (Note 4) 35,861
---------------------------------------------------------------------------------
Payable to Transfer and Dividend Disbursing Agent (Note 4) 18,242
---------------------------------------------------------------------------------
Accrued expenses 20,737
--------------------------------------------------------------------------------- -------------
Total liabilities 5,518,293
------------------------------------------------------------------------------------------------ ---------------
NET ASSETS for 233,386,545 shares of beneficial interest outstanding $ 248,001,686
------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
------------------------------------------------------------------------------------------------
Institutional Shares ($170,434,544 / 170,434,544 shares of beneficial interest outstanding)
$1.00
------------------------------------------------------------------------------------------------ ---------------
Cash Series Shares ($77,567,142 / 77,567,142 shares of beneficial interest outstanding)
$1.00
------------------------------------------------------------------------------------------------ ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 3,245,865
---------------------------------------------------------------------------------------------------
EXPENSES--
---------------------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 494,001
------------------------------------------------------------------------------------
Administrative personnel and services (Note 4) 153,903
------------------------------------------------------------------------------------
Custodian and portfolio accounting fees 54,994
------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 51,194
------------------------------------------------------------------------------------
Fund share registration costs 57,904
------------------------------------------------------------------------------------
Trustees' fees 1,913
------------------------------------------------------------------------------------
Auditing fees 17,823
------------------------------------------------------------------------------------
Legal fees 7,000
------------------------------------------------------------------------------------
Printing and postage 18,179
------------------------------------------------------------------------------------
Distribution services fees (Note 4) 201,595
------------------------------------------------------------------------------------
Insurance premiums 5,611
------------------------------------------------------------------------------------
Miscellaneous 7,591
------------------------------------------------------------------------------------ -------------
Total expenses 1,071,708
------------------------------------------------------------------------------------
Deduct--
------------------------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 494,001
-----------------------------------------------------------------------
Waiver of distribution services fees (Note 4) 40,319 534,320
----------------------------------------------------------------------- ----------- -------------
Net expenses 537,388
--------------------------------------------------------------------------------------------------- -------------
Net investment income $ 2,708,477
--------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
1994* 1993
INCREASE (DECREASE) IN NET ASSETS:
-----------------------------------------------------------------------------
OPERATIONS--
-----------------------------------------------------------------------------
Net investment income $ 2,708,477 $ 6,180,605
----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
-----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
-----------------------------------------------------------------------------
Institutional Shares (1,934,000) (4,723,866)
-----------------------------------------------------------------------------
Cash Series Shares (774,477) (1,456,739)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from distributions to shareholders (2,708,477) (6,180,605)
----------------------------------------------------------------------------- ---------------- ----------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
-----------------------------------------------------------------------------
Net proceeds from sale of shares 468,484,255 856,352,639
-----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 850,692 1,606,041
-----------------------------------------------------------------------------
Cost of shares redeemed (454,719,806) (944,784,209)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Fund share transactions 14,615,141 (86,825,529)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets 14,615,141 (86,825,529)
-----------------------------------------------------------------------------
NET ASSETS:
-----------------------------------------------------------------------------
Beginning of period 233,386,545 320,212,074
----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 248,001,686 $ 233,386,545
----------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C> <C>
1994* 1993 1992 1991 1990**
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
---------------------------------------------
Net investment income 0.01 0.02 0.03 0.05 0.01
--------------------------------------------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
---------------------------------------------
Dividends to shareholders from net
investment income (0.01) (0.02) (0.03) (0.05) (0.01)
--------------------------------------------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------- --------- --------- --------- --------- ---------
TOTAL RETURN*** 1.16% 2.43% 3.19% 4.89% 0.90%
---------------------------------------------
RATIOS TO AVERAGE NET ASSETS
---------------------------------------------
Expenses 0.30 (b) 0.31% 0.31% 0.30% 0.01 (b)
---------------------------------------------
Net investment income 2.32 (b) 2.40% 3.10% 4.73% 6.45 (b)
---------------------------------------------
Expense waiver/reimbursement (a) 0.40 (b) 0.34% 0.33% 0.43% 0.69 (b)
---------------------------------------------
SUPPLEMENTAL DATA
---------------------------------------------
Net assets, end of period
(000 omitted) $170,435 $165,865 $245,168 $124,603 $75,904
---------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from September 10, 1990 (date of initial
public investment) to October 31, 1990.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH SERIES SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C>
1994* 1993 1992 1991**
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------------------------------
Net investment income 0.01 0.02 0.03 0.04
---------------------------------------------------------------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
----------------------------------------------------------------
Dividends to shareholders
from net investment income (0.01) (0.02) (0.03) (0.04)
---------------------------------------------------------------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------- --------- --------- --------- ---------
TOTAL RETURN*** 0.96% 2.02% 2.78% 3.60%
----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------------------------------------
Expenses 0.70 (b) 0.71% 0.71% 0.64 (b)
----------------------------------------------------------------
Net investment income 1.92 (b) 2.01% 2.75% 4.11 (b)
----------------------------------------------------------------
Expense waiver/reimbursement (a) 0.50 (b) 0.44% 0.44% 0.59 (b)
----------------------------------------------------------------
SUPPLEMENTAL DATA
----------------------------------------------------------------
Net assets, end of period (000 omitted) $77,567 $67,521 $75,044 $69,747
----------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from January 7, 1991 (date of initial
public investment) to October 31, 1991.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of Minnesota Municipal Cash Trust (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 Fund provides two classes of shares ("Institutional Shares" and "Cash Series
Shares"). Cash Series Shares are identical in all respects to Institutional
Shares except that Cash Series Shares will be sold pursuant to a distribution
plan ("Plan") adopted in accordance with Investment Company Act rule 12b-1.
(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 (GAAP).
A. 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
Investment Company Act of 1940.
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state, than would be a comparable general
tax-exempt mutual fund. In order to reduce the credit risk associated with
such factors, at April 30, 1994, 77% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The
aggregate percentages by financial institutions and agencies ranged from
0.52% to 9.8% of total investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended (the "Code"). Distributions to
shareholders are recorded on the ex-dividend date.
C. 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 taxable income.
Accordingly, no provisions for federal tax are necessary.
D. 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under Federal securities law 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 Trustees. The Fund
will not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7 under
the Investment Company of 1940. Additional information on each restricted
security held at April 30, 1994 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Minnesota State Weekly
VRDNs P-Floats 10/4/93 $ 1,120,000
</TABLE>
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At April
30, 1994, capital paid-in aggregated $248,001,686. Transactions in Fund shares
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C>
INSTITUTIONAL SHARES 1994* 1993
-------------------------------------------------------------------------------- --------------- ---------------
Shares sold 294,535,603 610,443,315
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 112,113 190,482
--------------------------------------------------------------------------------
Shares redeemed (290,078,318) (689,936,437)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 4,569,398 (79,302,640)
-------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CASH SERIES SHARES 1994* 1993
<S> <C> <C>
-------------------------------------------------------------------------------- --------------- ---------------
Shares sold 173,948,652 245,909,324
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 738,579 1,415,559
--------------------------------------------------------------------------------
Shares redeemed (164,641,488) (254,847,772)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 10,045,743 (7,522,889)
-------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
* Six months ended April 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .40 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive its fee and reimburse certain operating expenses of the Fund.
Adviser can modify or terminate this voluntary waiver and reimbursement at any
time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION AND SERVICE PLAN--The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the terms of the Plan, the Trust will compensate Federated Securities Corp.
("FSC"), the principal distributor, from the net assets of the Trust to finance
activities intended to result in the sale of the Trust's Cash Series Shares. The
Plan provides that the Trust may incur distribution expenses up to .50 of 1% of
the average daily net assets of the Cash Series Shares, annually, to compensate
FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The fee is based on the size, type and number of accounts and transactions made
by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($40,733) were borne initially
by Adviser. The Fund has agreed to reimburse Adviser at an annual rate of .005
of 1% of average daily net assets for organizational expenses until expenses
initially borne by Adviser are fully reimbursed or the expiration
of five years after August 31, 1990, date the Fund's portfolio first became
effective, whichever occurs earlier. For the six months ended April 30, 1994,
the Fund paid $6,145 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $237,330,000 and $221,080,000, respectively. These purchases and sales were
conducted on an arms length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fees or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
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.
NEW JERSEY
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
[LOGO]
FEDERATED SECURITIES CORP.
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
2052902 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of New Jersey
Municipal Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the
"Trust"), for the six-month period from November 1, 1993 through April 30, 1994.
The Report includes an interview with the portfolio manager about economic
factors affecting the Fund followed by Financial Statements containing the
Fund's Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
double-tax-free income-- free from federal regular income tax and New Jersey
state income tax**--through a portfolio concentrated in high-quality, short-term
New Jersey municipal securities. As a shareholder in the Fund, you have the
opportunity to earn a greater after-tax yield than you could in a comparable
high-quality taxable investment.
From the first day to the last day of the report period, the Fund's total net
assets increased by $7 million to reach $94 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as health care, housing, and public utilities. Through
these bonds, the Fund paid $898,080 in dividends to all shareholders during the
report period.\
As a tax-sensitive New Jersey resident, you can rely on the Fund to seek the
best tax-free income opportunities for your cash. As always, we will continue to
provide you with the highest level of professional service. We appreciate your
support and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1994
* As a money market mutual fund, the Fund is managed to pursue a stable share
price of $1.00, although there is no guarantee that it will do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax.
\ Please note that this report includes financial highlights for both
Institutional Shares and Institutional Service Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Jeff A. Kozemchak, CFA
Q What has happened to interest rates and the municipal money markets since
our last reporting?
A Throughout most of last year, economic numbers continued to be more anemic
than anticipated and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%.
The municipal money market reacted with a corresponding back-up in rates, which
was somewhat exacerbated by $3.2 billion of new fixed-rate supply offered by the
State of California in mid-February. With renewed concerns of economic recovery
and inflation, investors immediately began to demand higher liquidity premiums
to invest further out the yield curve, causing interest rates on national one-
year notes to rise to their highest levels since June, 1992. In April, the
municipal money market was affected by heavy cash outflows as investors withdrew
cash to pay tax bills. Also, in mid-April and mid-May the Fed tightened twice,
moving the Federal funds rate target from 3.50% to 4.25%.
Q How are you managing the Fund to capitalize on this interest rate
environment?
A Unlike most of last year, when expectations of stable to lower interest
rates were commonplace, we now are in an environment of rising interest
rate expectations. For most of last year, I maintained a longer average
maturity in the Fund to take advantage of the yield premium available on
fixed-rate notes and commercial paper relative to variable rate demand notes.
Since November, 1993, I have allowed the average maturity of the Fund to
decrease from 62 days to 55 days at the end of April, 1994. A shorter average
maturity, combined with a higher percentage of liquid variable rate demand
notes, will allow the Fund to be even more responsive to an increasing rate
environment.
Q Jeff, how has the Fund performed over the period?
A For the six-month period ending April 30, 1994, the Fund had an annualized
total return of 1.99% for the Institutional Shares and 1.89% for the
Institutional Service Shares.* For a New Jersey resident in the highest
federal and state brackets, this was equivalent to taxable returns of 3.73% and
3.54% respectively. These numbers illustrate the attractiveness of the Fund
relative to taxable investments.
Q Going forward, what is your outlook for the tax-free money markets and the
Fund?
A I believe that interest rates will continue to rise over the year, and that
the Federal funds rate target will be 4.25% to 4.50% by mid-year and 4.75%
or higher by year-end. In a rising rate environment, stable net asset value
money market funds like the Fund are a key component in any strategy to preserve
principal value. The Fund's yield should continue to rise as interest rates
rise. Also, I continue to expect that tax-free cash vehicles like the Fund will
continue to outperform taxable money fund alternatives as they have over the
past several years. If interest rates continue to rise this year, I will keep
the average maturity short and the portfolio liquid, while choosing carefully
and selectively along the yield curve as attractive fixed-rate opportunities
appear.
* Performance quoted represents past performance and is not indicative of future
returns.
NEW JERSEY MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
<C> <S> <C> <C>
------------- --------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--102.4%
------------------------------------------------------------------------------------
NEW JERSEY--102.4%
---------------------------------------------------------------------
$ 2,000,000 Atlantic County, NJ, Improvement Authority Weekly VRDNs (Marine
Midland Bank N.A. LOC) VMIG2 $ 2,000,000
---------------------------------------------------------------------
1,630,378 Barnegat Township, NJ, 3.39% GO BANs, 10/3/94 NR 1,632,005
---------------------------------------------------------------------
2,700,000 Cape May County, NJ, Municipal Utilities Authority Solid Waste
Resource Recovery Revenue Bonds, 2.80% Annual TOBs (Series
1991)/(Societe Generale, Paris LOC)/(Subject to AMT), Mandatory
Tender 11/30/94 SP-1+ 2,700,000
---------------------------------------------------------------------
5,000,000 Cherry Hill, NJ, 3.00% BANs, 12/14/94 NR 5,006,939
---------------------------------------------------------------------
1,813,245 Lavallette Borough, NJ, 3.25% BANs, 5/6/94 NR 1,813,305
---------------------------------------------------------------------
3,322,025 Lawrence Township, NJ, 3.00% BANs, 2/10/95 NR 3,332,115
---------------------------------------------------------------------
2,800,000 Mercer County, NJ, Improvement Authority Weekly VRDNs (Credit Suisse
LOC) A-1+ 2,800,000
---------------------------------------------------------------------
593,750 Middle Township, NJ, 2.97% BANs, 6/15/94 NR 593,904
---------------------------------------------------------------------
1,500,000 Middlesex County, NJ, Pollution Control Finance Authority Weekly
VRDNs (FMC Corporation)/(Wachovia Bank & Trust Co. N.A. LOC) P-1 1,500,000
---------------------------------------------------------------------
2,000,000 Morristown, NJ, 3.125% BANs, 10/13/94 NR(3) 2,003,291
---------------------------------------------------------------------
3,000,000 New Jersey EDA Weekly VRDNs (Center for Aging, Inc.)/ (Banque Paribas
LOC) A-1 3,000,000
---------------------------------------------------------------------
1,150,000 New Jersey EDA Weekly VRDNs (Series 1992D-1)/(Danlin Corp.)/(Banque
National de Paris LOC)/(Subject to AMT) VMIG1 1,150,000
---------------------------------------------------------------------
2,645,000 New Jersey EDA Weekly VRDNs (Series 1992I-1)/(Geshem Realty)/(Banque
Nationale de Paris LOC)/(Subject to AMT) VMIG1 2,645,000
---------------------------------------------------------------------
2,000,000 New Jersey EDA Weekly VRDNs (Series 1992L)/(Kent Place
School)/(Banque Nationale de Paris LOC) VMIG1 2,000,000
---------------------------------------------------------------------
1,250,000 New Jersey EDA Weekly VRDNs (Series 1993I)/(Holt Hauling and
Warehousing Systems)/Meridian Bank LOC)/
(Subject to AMT) P-1 1,250,000
---------------------------------------------------------------------
6,400,000 New Jersey EDA Weekly VRDNs (YM-MWHA of Bergen County)/(Bank of New
York LOC) VMIG1 6,400,000
---------------------------------------------------------------------
1,400,000 New Jersey Health Care Facilities Financing Authority, 2.90% SB
(Series D)/(Chilton Memorial Hospital), 7/1/94 NR(3) 1,400,000
---------------------------------------------------------------------
915,000 New Jersey Housing Mortgage Finance Authority, 3.00% (MBIA Insured),
10/1/94 NR(1) 915,000
---------------------------------------------------------------------
3,000,000 New Jersey Housing Mortgage Finance Authority, 3.15% (Series A),
8/1/94 NR(2) 3,000,000
---------------------------------------------------------------------
2,200,000 New Jersey State, 3.00% TRANs (Series 1992B), 6/15/94 SP-1+ 2,201,002
---------------------------------------------------------------------
1,000,000 New Jersey Turnpike Authority Weekly VRDNs (Series 1991D)/(FGIC
Insured) A-1+ 1,000,000
---------------------------------------------------------------------
760,000 Palisades Park, NJ, 2.75% BANs, 5/24/94 NR(3) 760,058
---------------------------------------------------------------------
2,400,000 New Jersey EDA Weekly VRDNs (Church & Dwight Co.)/ (Bank of Nova
Scotia LOC) VMIG1 2,400,000
---------------------------------------------------------------------
1,300,000 New Jersey EDA Weekly VRDNs (Edison Associates)/
(Dai-Ichi Kangyo Bank Ltd LOC, Ford Motor Credit BPA) P-1 1,300,000
---------------------------------------------------------------------
2,500,000 New Jersey EDA Weekly VRDNs (Franciscan Oaks)/(Bank of Scotland LOC) A-1+ 2,500,000
---------------------------------------------------------------------
5,698,000 New Jersey EDA Weekly VRDNs (Meridian Healthcare)/ (First National
Bank of Maryland LOC)/(Subject to AMT) P-1 5,698,000
---------------------------------------------------------------------
4,473,000 New Jersey EDA Weekly VRDNs (Mulins Machines)/
(Sovran Bank N.A. LOC) P-1 4,473,000
---------------------------------------------------------------------
1,550,000 New Jersey EDA Weekly VRDNs (Nash Group)/(Chemical Bank LOC)/(Subject
to AMT) A-1 1,550,000
---------------------------------------------------------------------
4,300,000 New Jersey EDA Weekly VRDNs (Series 1986)/(Ridgefield
Associates)/(Bank of Tokyo Ltd. LOC)/(Subject to AMT) P-1 4,300,000
---------------------------------------------------------------------
350,000 New Jersey EDA Weekly VRDNs (Series 1987G)/(W.Y.
Urban Renewal)/(National Westminster Bank PLC LOC)/
(Subject to AMT) VMIG1 350,000
---------------------------------------------------------------------
2,550,000 New Jersey EDA Weekly VRDNs (Series 1988F)/(Lamington Corners
Assoc.)/(First Fidelity Bank LOC)/(Subject to AMT) VMIG1 2,550,000
---------------------------------------------------------------------
1,800,000 New Jersey EDA Weekly VRDNs (Series 1988B)/(Hyland Industrial
Associates)/(First Fidelity Bank LOC) VMIG1 1,800,000
---------------------------------------------------------------------
1,430,000 New Jersey EDA Weekly VRDNs (Series 1992Q)/(Physical Acoustics
Inc.)/(Banque Nationale de Paris LOC), (Subject to AMT) VMIG1 1,430,000
---------------------------------------------------------------------
1,425,000 New Jersey EDA Weekly VRDNs (Series 1992Z)/(West-Ward
Pharmaceuticals)/(Banque Nationale de Paris LOC), (Subject to AMT) VMIG1 1,425,000
---------------------------------------------------------------------
2,000,000 Port Authority of New York and New Jersey Special Project Bonds
Weekly VRDNs (Series 3)/(KIAC Partners)/(Subject to AMT)/(Deutsche
Bank AG LOC) A-1+ 2,000,000
---------------------------------------------------------------------
9,000,000 Port Authority of New York and New Jersey Weekly VRDNs (Series
1991-4)/(Subject to AMT) P-1 9,000,000
---------------------------------------------------------------------
800,000 Roxbury Township, NJ, 3.58% BANs, 10/28/94 NR(3) 801,077
---------------------------------------------------------------------
1,409,450 Winslow Township, NJ, 2.78% BANs, 6/17/94 NR(3) 1,409,679
---------------------------------------------------------------------
2,090,000 Woodbury, NJ, 3.75% GO BANs, 7/15/94 NR 2,092,549
---------------------------------------------------------------------
1,639,000 Woodbury, NJ, 4.15% GO BANs, 4/15/95 NR 1,647,306
---------------------------------------------------------------------
1,000,000 Woodcliff Lake, NJ, 2.83% BANs, 6/10/94 NR(3) 1,000,138
--------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST) $ 96,829,368\
--------------------------------------------------------------------- --------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
\ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($94,524,906) at April 30, 1994.
The following abbreviations are used in this portfolio:
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
EDA--Economic Development Authority
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance
SB--Serial Bond
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)
NEW JERSEY MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
--------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $ 96,829,368
--------------------------------------------------------------------------------------------------
Cash 346,674
--------------------------------------------------------------------------------------------------
Interest receivable 493,078
--------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 869
--------------------------------------------------------------------------------------------------
Deferred expenses (Note 2E) 16,686
-------------------------------------------------------------------------------------------------- --------------
Total assets 97,686,675
--------------------------------------------------------------------------------------------------
LIABILITIES:
--------------------------------------------------------------------------------------------------
Payable for investments purchased $ 3,000,000
-----------------------------------------------------------------------------------
Dividends payable 127,792
-----------------------------------------------------------------------------------
Payable for Fund shares redeemed 20,246
-----------------------------------------------------------------------------------
Accrued expenses 13,731
----------------------------------------------------------------------------------- -------------
Total liabilities 3,161,769
-------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 94,524,906 shares of beneficial interest outstanding $ 94,524,906
-------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
--------------------------------------------------------------------------------------------------
Institutional Shares ($62,170,803 / 62,170,803 shares of beneficial interest outstanding)
$1.00
-------------------------------------------------------------------------------------------------- --------------
Institutional Service Shares ($32,354,103 / 32,354,103 shares of beneficial interest outstanding)
$1.00
-------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 1,155,177
---------------------------------------------------------------------------------------------------
EXPENSES:
--------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 183,423
--------------------------------------------------------------------------------------
Administrative personnel and services (Note 4) 126,862
--------------------------------------------------------------------------------------
Custodian and portfolio accounting fees 36,177
--------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 17,334
--------------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares (Note 4) 5,514
--------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares (Note 4) 2,292
--------------------------------------------------------------------------------------
Fund share registration costs 17,231
--------------------------------------------------------------------------------------
Trustees' fees 1,400
--------------------------------------------------------------------------------------
Auditing fees 7,822
--------------------------------------------------------------------------------------
Legal fees 6,250
--------------------------------------------------------------------------------------
Printing and postage 13,500
--------------------------------------------------------------------------------------
Distribution services fees (Note 4) 12,377
--------------------------------------------------------------------------------------
Insurance premiums 5,638
--------------------------------------------------------------------------------------
Taxes 1,100
--------------------------------------------------------------------------------------
Miscellaneous 3,600
-------------------------------------------------------------------------------------- -----------
Total expenses 440,520
--------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee (Note 4) 183,423
---------------------------------------------------------------------------------------------------
Net expenses 257,097
--------------------------------------------------------------------------------------------------- -------------
Net investment income $ 898,080
--------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994* 1993
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
-----------------------------------------------------------------------------
OPERATIONS--
-----------------------------------------------------------------------------
Net investment income $ 898,080 $ 2,157,015
----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
-----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
-----------------------------------------------------------------------------
Institutional Shares (663,940) (1,458,805)
-----------------------------------------------------------------------------
Institutional Service Shares (234,140) (602,534)
-----------------------------------------------------------------------------
Cash Series Shares -- (95,676)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from distributions to shareholders (898,080) (2,157,015)
----------------------------------------------------------------------------- ---------------- ----------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
-----------------------------------------------------------------------------
Proceeds from sale of shares 165,760,420 344,229,882
-----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 127,478 213,366
-----------------------------------------------------------------------------
Cost of shares redeemed (158,714,084) (346,170,580)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Fund share transactions 7,173,814 (1,727,332)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets 7,173,814 (1,727,332)
-----------------------------------------------------------------------------
NET ASSETS:
-----------------------------------------------------------------------------
Beginning of period 87,351,092 89,078,424
----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 94,524,906 $ 87,351,092
----------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C>
1994* 1993 1992 1991**
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------------------------------
Net investment income 0.01 0.02 0.03 0.04
---------------------------------------------------------------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
----------------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.02) (0.03) (0.04)
---------------------------------------------------------------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------- --------- --------- --------- ---------
TOTAL RETURN*** 0.94% 2.12% 2.86% 3.82%
----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------------------------------------
Expenses 0.63 (b) 0.56% 0.55% 0.35%(b)
----------------------------------------------------------------
Net investment income 1.89 (b) 2.08% 2.69% 4.11%(b)
----------------------------------------------------------------
Expense waiver/reimbursement (a) 0.40 (b) 0.45% 0.51% 0.69%(b)
----------------------------------------------------------------
SUPPLEMENTAL DATA
----------------------------------------------------------------
Net assets, end of period (000 omitted)
$32,354 $21,005 $26,844 $17,709
----------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from December 13, 1990 (date of initial
public investment) to October 31, 1991.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994* 1993 1992 1991**
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------------------------------
Net investment income 0.01 0.02 0.03 0.04
---------------------------------------------------------------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
----------------------------------------------------------------
Dividends to shareholders from net investment
income (0.01) (0.02) (0.03) (0.04)
---------------------------------------------------------------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------- --------- --------- --------- ---------
TOTAL RETURN*** 0.99% 2.22% 2.96% 3.87%
----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------------------------------------
Expenses 0.53 (b) 0.46% 0.45% 0.27%(b)
----------------------------------------------------------------
Net investment income 1.98 (b) 2.19% 2.86% 4.19%(b)
----------------------------------------------------------------
Expense waiver/reimbursement (a) 0.40 (b) 0.45% 0.51% 0.67%(b)
----------------------------------------------------------------
SUPPLEMENTAL DATA
----------------------------------------------------------------
Net assets, end of period (000 omitted)
$62,171 $66,346 $57,657 $39,423
----------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from December 13, 1990 (date of initial
public investment) to October 31, 1991.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of New Jersey Municipal Cash Trust
(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 Fund provides two classes of shares ("Institutional Shares" and
"Institutional Service Shares"). Institutional Service Shares are identical in
all respects to Institutional Shares except that Institutional Service Shares
will be sold pursuant to a distribution plan ("Plan") adopted in accordance with
Investment Company Act rule 12b-1.
(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. The
policies are in conformity with generally accepted accounting principles (GAAP).
A. 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
Investment Company Act of 1940.
Since the Fund may invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state, than would be a comparable general
tax-exempt mutual fund. In order to reduce the risk associated with such
factors, at
April 30, 1994, 61.1% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial
institutions and financial guaranty assurance agencies. The aggregate
percentages by financial institutions and agencies ranged from 0.4% to 8.9%
of total investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended ("Code"). Distributions to
shareholders are recorded on the ex-dividend date.
C. 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 taxable income.
Accordingly, no provisions for federal tax are necessary.
D. 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1994, capital paid-in aggregated $94,524,906.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
INSTITUTIONAL SHARES 1994* 1993
<S> <C> <C>
Shares sold 122,525,950 184,549,947
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 713 2,221
--------------------------------------------------------------------------------
Shares redeemed (126,701,501) (175,863,610)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions (4,174,838) 8,688,558
-------------------------------------------------------------------------------- --------------- ---------------
INSTITUTIONAL SERVICE SHARES
Shares sold 43,234,470 141,401,508
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 126,765 134,265
--------------------------------------------------------------------------------
Shares redeemed (32,012,583) (147,373,988)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 11,348,652 (5,838,215)
-------------------------------------------------------------------------------- --------------- ---------------
CASH SERIES SHARES
Shares sold -- 18,278,427
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared -- 76,880
--------------------------------------------------------------------------------
Shares redeemed -- (22,932,982)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions -- (4,577,675)
-------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
* Six months ended April 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .40 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION AND SERVICE PLAN--The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the terms of the Plan, the Trust will compensate Federated Securities Corp.
("FSC"), the principal distributor, from the net assets of the Trust to finance
activities intended to result in the sale of the Trust's Institutional Service
Shares. The Plan provides that the Fund may incur distribution expenses up to
.10 of 1% of the average daily net assets of the Institutional Service Shares,
annually, to compensate FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
personal services for shareholders and the maintenance of shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The fee is based on the size, type and number of accounts and transactions made
by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($61,531) were borne initially
by Adviser. The Fund has agreed to reimburse Adviser at an annual rate of .005
of 1% of average daily net assets for organizational expenses, until expenses
initially borne by Adviser are fully reimbursed or the expiration of five years
after December 10, 1990, the date the Fund's portfolio first became effective,
whichever occurs earlier. For the six months ended April 30, 1994, the Fund paid
$2,284 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $74,300,000 and $62,550,000, respectively. These purchases and sales were
conducted on an arms length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fees or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
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.
PENNSYLVANIA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
[LOGO]
FEDERATED SECURITIES CORP.
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
0052405 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Pennsylvania
Municipal Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the
"Trust"), for the six-month period from November 1, 1993 through April 30, 1994.
The Report includes an interview with the portfolio manager about economic
factors affecting the Fund, followed by Financial Statements containing the
Fund's Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
triple-tax-free income--free from federal regular income tax, Pennsylvania state
income tax, and Pennsylvania personal property tax**--through a portfolio
concentrated in high-quality, short-term Pennsylvania municipal securities. As a
shareholder in the Fund, you have the opportunity to earn a greater after-tax
yield than you could in a comparable high-quality taxable investment.
On the last day of the report period, the Fund's total net assets were more than
$306 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as education, health care, housing, and public
utilities. Through these bonds, the Fund paid more than $3.3 million in
dividends to all shareholders during the report period.\
As a tax-sensitive Pennsylvania resident, you can rely on the Fund to seek the
best tax-free income opportunities for your cash. As always, we will continue to
provide you with the highest level of professional service. We appreciate your
support and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1994
* As a money market mutual fund, the Fund is managed to pursue a stable share
price of $1.00, although there is no guarantee that it will do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax.
\ Please note that this report includes financial highlights for both Cash
Series and Institutional Service Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Jeff A. Kozemchak, CFA
Q What has happened to interest rates and the municipal money markets over
the report period?
A Throughout most of last year, economic numbers continued to be more anemic
than anticipated and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%.
The municipal money market reacted with a corresponding back-up in rates, which
was somewhat exacerbated by $3.2 billion of new fixed-rate supply offered by the
State of California in mid-February. With renewed concerns of economic recovery
and inflation, investors immediately began to demand higher liquidity premiums
to invest further out the yield curve, causing interest rates on national one-
year notes to rise to their highest levels since June, 1992. In April, the
municipal money market was affected by heavy cash outflows as investors withdrew
cash to pay tax bills. Also, in mid-April and mid-May the Fed tightened twice,
moving the Federal funds rate target from 3.50% to 4.25%.
Q How are you managing the Fund to capitalize on this interest rate
environment?
A Unlike most of last year, when expectations of stable to lower interest
rates were commonplace, we now are in an environment of rising interest
rate expectations. For most of last year, I maintained a longer average
maturity in the Fund to take advantage of the yield premium available on
fixed-rate notes and commercial paper relative to variable rate demand notes.
Since November, 1993, I have allowed the average maturity of the Fund to
decrease from 78 days to 54 days at the end of
April, 1994. A shorter average maturity, combined with a higher percentage of
liquid variable rate demand notes, will allow the Fund to be even more
responsive to an increasing rate environment.
Q Going forward, what is your outlook for the tax-free money markets and the
Fund?
A I believe that interest rates will continue to rise over the year, and that
the Federal funds rate target will be 4.25% to 4.50% by mid-year and 4.75%
or higher by year-end. In a rising interest rate environment, stable net
asset value money market funds like the Fund are a key component in any strategy
to preserve principal value. The Fund's yield should continue to rise as
interest rates rise. Also, I continue to expect that tax-free cash vehicles like
the Fund will continue to outperform taxable money fund alternatives as they
have over the past several years. If interest rates continue to rise this year,
I will keep the average maturity short and the portfolio liquid, while choosing
carefully and selectively along the yield curve as attractive fixed-rate
opportunities appear.
PENNSYLVANIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
-------------- ------------------------------------------------------------------- ----------- ---------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--100.2%
-----------------------------------------------------------------------------------
PENNSYLVANIA--99.2%
-------------------------------------------------------------------
$ 1,000,000 Allegheny County, PA, IDA Weekly VRDNs (Series 1991)/(Mine Safety
Appliances Co.)/(Sanwa Bank Ltd. LOC) P-1 $ 1,000,000
-------------------------------------------------------------------
1,900,000 Allegheny County, PA, IDA Weekly VRDNs (Series 1991B)/(Shandon,
Inc.)/(PNC Bank N.A. LOC)/(Subject to AMT) P-1 1,900,000
-------------------------------------------------------------------
3,290,000 Allegheny County, PA, IDA Weekly VRDNs, Adjustable Rate Commercial
Development Revenue Bonds (Series 1992)/(Eleven Parkway Center
Associates)/(Mellon Bank N.A. LOC) P-1 3,290,000
-------------------------------------------------------------------
6,500,000 Allegheny County, PA, IDA, 2.80% CP (Duquesne Light
Company)/(Barclays Bank PLC LOC), Mandatory Tender 10/20/94 A-1+ 6,500,000
-------------------------------------------------------------------
6,000,000 Allegheny County, PA, IDA, 3.20% CP (USX, Inc.)/(Long Term Credit
Bank of Japan Ltd. LOC), Mandatory Tender 5/16/94 A-2 6,000,000
-------------------------------------------------------------------
1,500,000 Allegheny County, PA, IDA, 3.45% CP (USX, Inc.)/(Long Term Credit
Bank of Japan Ltd. LOC), Mandatory Tender 8/11/94 A-2 1,500,000
-------------------------------------------------------------------
3,000,000 Allegheny County, PA, IDA, PCR, 2.70% Annual TOBs (Series
1992A)/(Duquesne Light Company)/(Canadian Imperial Bank of Commerce
LOC), Mandatory Tender
7/12/94 P-1 3,000,000
-------------------------------------------------------------------
2,000,000 Athens, PA, Area School District, 2.77% TRANs, 6/30/94 NR(3) 2,000,125
-------------------------------------------------------------------
2,800,000 Berks County, PA, 2.70% GO TRANs (Series 1993),
12/30/94 NR(3) 2,800,000
-------------------------------------------------------------------
1,920,000 Berks County, PA, IDA Weekly VRDNs (Beacon Container)/(Hamilton
National Bank LOC)/(Subject to AMT) P-1 1,920,000
-------------------------------------------------------------------
1,385,000 Berks County, PA, IDA Weekly VRDNs (Quaker Maid Meats,
Inc.)/(Meridian Bank LOC)/(Subject to AMT) VMIG1 1,385,000
-------------------------------------------------------------------
2,100,000 Berks County, PA, IDA Weekly VRDNs (Series 1988)/ (Arrow
International, Inc.)/(Hamilton National Bank LOC)/ (Subject to AMT) P-1 2,100,000
-------------------------------------------------------------------
2,000,000 Bethel Park, PA, 2.74% TANs, 12/30/94 NR(3) 2,001,490
-------------------------------------------------------------------
3,000,000 Blackhawk, PA, School District, 2.72% TRANs, 6/30/94 NR(3) 3,000,000
-------------------------------------------------------------------
3,080,000 Bucks County, PA, IDA Weekly VRDNs (Pennsylvania
Associates)/(Meridian Bank LOC) P-1 3,080,000
-------------------------------------------------------------------
1,000,000 Bucks County, PA, IDA Weekly VRDNs (Series 1986)/ (Winks Lane,
Inc.)/ (Mellon Bank N.A. LOC) P-1 1,000,000
-------------------------------------------------------------------
5,305,000 Bucks County, PA, IDA Weekly VRDNs (Series 1991)/ (Cabot Medical
Corp.)/(Meridian Bank LOC)/(Subject to AMT) VMIG1 5,305,000
-------------------------------------------------------------------
2,445,000 Bucks County, PA, IDA Weekly VRDNs (Series 1993)/ (Double Plastics,
Inc.)/(Meridian Bank LOC)/(Subject to AMT) VMIG1 2,445,000
-------------------------------------------------------------------
1,000,000 Butler County, PA, IDA Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd. LOC) P-1 1,000,000
-------------------------------------------------------------------
3,000,000 Butler County, PA, IDA Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd. LOC)/(Subject to AMT) P-1 3,000,000
-------------------------------------------------------------------
1,000,000 Butler County, PA, IDA Weekly VRDNs (Series 1992B)/ (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd. LOC)/ (Subject to AMT) P-1 1,000,000
-------------------------------------------------------------------
700,000 Cambria County, PA, IDA Weekly VRDNs (Cambria Cogeneration
Corp.)/(Fuji Bank Ltd. LOC)/(Subject to AMT) A-1 700,000
-------------------------------------------------------------------
2,100,000 Carbon County, PA, IDA Weekly VRDNs (Summit
Management & Utilities, Inc.)/(PNC Bank, Northeast PA LOC)/(Subject
to AMT) A-1 2,100,000
-------------------------------------------------------------------
4,300,000 Clearfield County, PA, IDA Weekly VRDNs (Penn Traffic
Co.)/(ABN-AMRO Bank N.V. LOC)/(Subject to AMT) P-1 4,300,000
-------------------------------------------------------------------
2,500,000 Clinton County, PA, IDA Weekly VRDNs (Armstrong World
Industries)/(Mellon Bank N.A. LOC) P-1 2,500,000
-------------------------------------------------------------------
10,000,000 Clinton County, PA, IDA, Solid Waste Disposal Revenue Bonds, 2.90%
Annual TOBs (Series 1992A)/(International Paper Co.
Guaranty)/(Subject to AMT), Optional Tender 1/15/95 A-2 10,000,000
-------------------------------------------------------------------
2,285,000 Clinton County, PA, Municipal Authority Weekly VRDNs (Series
A)/(Lock Haven Hospital)/(Mellon Bank N.A. LOC) P-1 2,285,000
-------------------------------------------------------------------
10,000,000 Commonwealth of Pennsylvania, 3.25% TANs, 6/30/94 SP-1+ 10,008,857
-------------------------------------------------------------------
1,825,000 Conrad Weiser, PA, Area School District, 2.72% TRANs, 6/30/94 NR(3) 1,825,000
-------------------------------------------------------------------
4,000,000 Delaware County, PA, 2.45% IDA, CP (Standard Oil Co.), Mandatory
Tender 5/24/94 A-1+ 4,000,000
-------------------------------------------------------------------
1,620,000 Delaware County, PA, PCR, 2.40% CP (Series C)/(Philadelphia
Electric Co.)/(FGIC Insured), Mandatory Tender 5/12/94 A-1+ 1,620,000
-------------------------------------------------------------------
1,370,000 Eastern York, PA, School District, 2.78% TRANs,
6/30/94 NR(3) 1,370,795
-------------------------------------------------------------------
700,000 Erie County, PA, IDA Weekly VRDNs (P.H.B., Inc.)/ (Marine Bank,
Warren LOC)/(Subject to AMT) P-1 700,000
-------------------------------------------------------------------
625,000 Erie County, PA, IDA Weekly VRDNs (Series 1985)/
(R.P-C Value, Inc.)/(PNC Bank N.A. LOC) P-1 625,000
-------------------------------------------------------------------
700,000 Erie County, PA, IDA Weekly VRDNs (Series B)/(P.H.B., Inc.)/(Marine
Bank, Warren LOC)/(Subject to AMT) P-1 700,000
-------------------------------------------------------------------
1,780,000 Erie County, PA, IDA Weekly VRDNs Multi-Mode Revenue Reference
Bonds (Corry Manor, Inc.)/(Marine Bank, Warren LOC) A-1 1,780,000
-------------------------------------------------------------------
750,000 Forest County, PA, IDA Weekly VRDNs (Industrial
Timber and Land Co.)/(National City Bank LOC) P-1 750,000
-------------------------------------------------------------------
1,530,000 Forest County, PA, IDA Weekly VRDNs (Marienville Healthcare
Facility)/(PNC Bank N.A. LOC) P-1 1,530,000
-------------------------------------------------------------------
2,100,000 Franklin County, PA, IDR Weekly VRDNs (Guarriello Limited
Partnership)/(PNC Bank N.A. LOC)/(Subject to AMT) P-1 2,100,000
-------------------------------------------------------------------
2,100,000 Grove City, PA, School District, 2.79% TRANs, 6/30/94 NR(3) 2,101,218
-------------------------------------------------------------------
3,000,000 Lackawanna County, PA, IDA Weekly VRDNs (Series 1992)/(HEM
Project)/(Corestates Bank N.A. LOC)/
(Subject to AMT) P-1 3,000,000
-------------------------------------------------------------------
4,840,000 Lehigh County, PA, General Purpose Authority Revenue Bonds Weekly
VRDNs (Series 1990)/(Phoebe Terrace, Inc.)/(Meridian Bank LOC) P-1 4,840,000
-------------------------------------------------------------------
3,350,000 Lehigh County, PA, IDA Weekly VRDNs (Cedar Crest College)/(PNC
Bank, Northeast PA LOC) A-1 3,350,000
-------------------------------------------------------------------
3,100,000 Lehigh County, PA, IDA Weekly VRDNs (Series 1989A)/ (Hershey Pizza
Co., Inc.)/(PNC Bank, Northeast PA LOC)/(Subject to AMT) A-1 3,100,000
-------------------------------------------------------------------
1,200,000 McKean County, PA, IDA Weekly VRDNs Multi-Mode Revenue Reference
Bonds (Bradford Manor, Inc.)/(Marine Bank, Warren LOC) A-1 1,200,000
-------------------------------------------------------------------
3,300,000 Monroe County, PA, IDA PCR Weekly VRDNs (Cooper Industries)/(Sanwa
Bank Ltd. LOC) A-1+ 3,300,000
-------------------------------------------------------------------
3,000,000 Montgomery County, PA, Higher Education and Health Authority Weekly
VRDNs (Pooled Loan Program)/ (AMBAC Insured) A-1+ 3,000,000
-------------------------------------------------------------------
1,500,000 Montgomery County, PA, IDA Weekly VRDNs (Series 1992)/(RJI Limited
Partnership)/Meridian Bank LOC)/ (Subject to AMT) VMIG1 1,500,000
-------------------------------------------------------------------
2,800,000 Montgomery County, PA, IDA Weekly VRDNs (Thomas & Betts
Corp.)/(Wachovia Bank & Trust Co. N.A. LOC)/ (Subject to AMT) P-1 2,800,000
-------------------------------------------------------------------
3,500,000 Montgomery County, PA, IDR Weekly VRDNs (Series 84)/(Seton
Company)/(Banque Paribas LOC) A-1 3,500,000
-------------------------------------------------------------------
2,725,000 Moon Township, PA, IDA Weekly VRDNs (Airport Hotel
Associates)/(ABN-AMBRO Bank LOC) A-1+ 2,725,000
-------------------------------------------------------------------
5,000,000 North Lebanon Township, PA, Municipal Authority Mortgage Weekly
VRDNs (Grace Community, Inc.)/(Meridian Bank LOC) VMIG1 5,000,000
-------------------------------------------------------------------
4,000,000 Northampton County, PA, IDA, 2.70% CP (Citizens
Utilities Company)/(Subject to AMT), Mandatory Tender 7/14/94 A-1+ 4,000,000
-------------------------------------------------------------------
2,000,000 Northampton County, PA, IDA, 2.75% CP (Citizens Utilities
Company)/(Subject to AMT), Mandatory Tender
5/19/94 A-1+ 2,000,000
-------------------------------------------------------------------
5,000,000 Northampton County, PA, IDA, 2.85% CP (Citizens Utilities
Company)/(Subject to AMT), Mandatory Tender
5/13/94 A-1+ 5,000,000
-------------------------------------------------------------------
350,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs (D.D.I., Inc.)/(PNC
Bank N.A. LOC)/(Subject to AMT) Aa3 350,000
-------------------------------------------------------------------
725,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs (Ram Forest
Products)/(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 725,000
-------------------------------------------------------------------
1,525,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs
(Series G4)/(Metamura Products, Inc.)/(PNC Bank N.A. LOC)/(Subject
to AMT) Aa3 1,525,000
-------------------------------------------------------------------
2,800,000 Pennsylvania EDA Solid Waste Disposal Revenue Bonds, 2.50% CP
(Series 1992A)/(Inter-Power/AhlCon Partners)/(Banque Paribas
LOC)/(Subject to AMT), Mandatory Tender 5/26/94 A-1 2,800,000
-------------------------------------------------------------------
825,000 Pennsylvania EDA Weekly VRDNs (PNC Bank N.A. LOC) P-1 825,000
-------------------------------------------------------------------
325,000 Pennsylvania EDA Weekly VRDNs (Cavery Wire Co.)/ (PNC Bank N.A.
LOC)/(Subject to AMT) Aa3 325,000
-------------------------------------------------------------------
3,600,000 Pennsylvania EDA Weekly VRDNs (Industrial Scientific Corp.)/(Mellon
Bank N.A. LOC)/(Subject to AMT) P-1 3,600,000
-------------------------------------------------------------------
1,800,000 Pennsylvania EDA Weekly VRDNs (Joseph J. Brunner, Inc.)/(PNC Bank
N.A. LOC)/(Subject to AMT) A-1 1,800,000
-------------------------------------------------------------------
800,000 Pennsylvania EDA Weekly VRDNs (Pioneer Fluid)/(PNC Bank N.A.
LOC)/(Subject to AMT) Aa3 800,000
-------------------------------------------------------------------
925,000 Pennsylvania EDA Weekly VRDNs (Reale Associates)/ (PNC Bank N.A.
LOC)/(Subject to AMT) Aa3 925,000
-------------------------------------------------------------------
5,050,000 Pennsylvania EDA Weekly VRDNs (Series 1986)/(B.W. Ebensburg)/(Swiss
Bank LOC)/(Subject to AMT) VMIG1 5,050,000
-------------------------------------------------------------------
575,000 Pennsylvania EDA Weekly VRDNs (Series B8)/(Payne Printing Co.)/(PNC
Bank N.A. LOC)/(Subject to AMT) Aa3 575,000
-------------------------------------------------------------------
1,000,000 Pennsylvania EDA Weekly VRDNs (Walnut & Craig Street
Associates)/(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 1,000,000
-------------------------------------------------------------------
4,000,000 Pennsylvania EDA, 2.50% CP (Inter-Power AhlCon Partners)/(Banque
Paribas LOC), Mandatory Tender 7/22/94 A-1 4,000,000
-------------------------------------------------------------------
3,000,000 Pennsylvania Floating Rate Trust Certificate, 2.90% Monthly TOBs
(Series 1993H)/(Commonwealth of Pennsylvania)/(AMBAC Insured),
6/6/94 NR(2) 3,000,000
-------------------------------------------------------------------
7,300,000 Pennsylvania HFA, 3.00% Semi-Annual TOBs, Optional Tender 10/1/94 AA 7,300,000
-------------------------------------------------------------------
1,000,000 Pennsylvania HFA, Section 8 Assisted Residential Development
Refunding Bonds Weekly VRDNs (Series 1992A)/ (Capital Guaranty
Insured, Citibank N.A. BPA) NR(1) 1,000,000
-------------------------------------------------------------------
3,000,000 Pennsylvania Higher Education Assistance Agency
Weekly VRDNs (Fuji Bank Ltd. LOC)/(Subject to AMT) VMIG1 3,000,000
-------------------------------------------------------------------
1,500,000 Pennsylvania Higher Education Facilities Authority Weekly VRDNs
(Carnegie Mellon University Guaranty) A+ 1,500,000
-------------------------------------------------------------------
3,900,000 Pennsylvania State Higher Education Assistance Agency Weekly VRDNs
(Union Bank of Switzerland LOC)/
(Subject to AMT) A-1+ 3,900,000
-------------------------------------------------------------------
9,625,000 Pennsylvania State Higher Education Facilities Authority, 2.85%
TOBs (Carnegie-Mellon University), Optional Tender 11/1/94 A-1 9,625,000
-------------------------------------------------------------------
3,000,000 Pennsylvania State Higher Education Facilities Authority, 2.55%
Annual TOBs (Carnegie Mellon University),
Optional Tender 5/1/94 A-1 3,000,000
-------------------------------------------------------------------
3,000,000 Pennsylvania State Higher Education Facilities Authority, 4.00%
Annual TOBs (Pennsylvania State University),
Optional Tender 5/4/95 A-1 3,014,430
-------------------------------------------------------------------
3,000,000 Pennsylvania State University, 3.00% BANs (Series 1993B), 12/5/94 SP-1+ 3,004,707
-------------------------------------------------------------------
5,800,000 Pennsylvania State University, 3.00% BANs (Series 93), 5/26/94 MIG1 5,801,450
-------------------------------------------------------------------
2,900,000 Philadelphia Authority for Industrial Development Weekly VRDNs
(Series 1991A)/(Levin Corp.)/(PNC Bank N.A. LOC) P-1 2,900,000
-------------------------------------------------------------------
4,000,000 Philadelphia Redevelopment Authority Multi-Family Revenue Bonds
Weekly VRDNs (Series 1985)/(Franklin Town Towers)/(Marine Midland
Bank N.A. and Hong-Kong Shanghai Banking Corp. LOCs) A-1 4,000,000
-------------------------------------------------------------------
2,900,000 Philadelphia, PA, 2.45% GO CP (Series 1990)/(Fuji Bank Ltd. LOC),
Mandatory Tender 5/23/94 A-1 2,900,000
-------------------------------------------------------------------
3,000,000 Philadelphia, PA, 2.55% CP (Fuji Bank LOC), Mandatory Tender
5/24/94 A-1 3,000,000
-------------------------------------------------------------------
5,930,000 Philadelphia, PA, HEFA, 2.70% Annual TOBs (Pennsylvania
Hospital)/(PNC Bank N.A. LOC), Optional Tender 7/1/94 A-1 5,930,000
-------------------------------------------------------------------
3,500,000 Philadelphia, PA, IDA, 3.15% Annual TOBs (Series A)/ (Suite
Hotel)/(First National Bank of Boston & Bank of
Tokyo LOCs), Optional Tender 6/1/94 A-1 3,500,000
-------------------------------------------------------------------
7,600,000 Philadelphia, PA, IDR Weekly VRDNs (Series 93)/(Sackett
Development)/(Mellon Bank N.A. LOC) P-1 7,600,000
-------------------------------------------------------------------
4,450,000 Phoenixville, PA, Area School District, 2.82% TRANs,
6/30/94 NR(3) 4,450,706
-------------------------------------------------------------------
1,715,000 Pittsburgh, PA, Urban Redevelopment Authority, 2.85% Mortgage
Revenue Bonds (Series B)/(Barclays Bank PLC Investment
Agreement)/(Subject to AMT), Mandatory Tender 6/1/94 A-1+ 1,715,000
-------------------------------------------------------------------
1,800,000 Port Authority of Allegheny County, PA, 2.90% Grant Anticipation
Notes (Series 1993A)/(PNC Bank N.A. LOC), 8/1/94 P-1 1,800,000
-------------------------------------------------------------------
500,000 Quakertown, PA, Weekly VRDNs (Hapsco Group)/(First National Bank,
Chicago LOC) VMIG1 500,000
-------------------------------------------------------------------
2,400,000 Riverside, PA, Beaver County School District, 2.77% TRANs, 6/30/94 NR(3) 2,400,190
-------------------------------------------------------------------
1,300,000 Sayre, PA, Health Care Facility Authority Hospital Weekly VRDNs
(Series J)/(VHA of PA Capital Asset Finance Program)/(AMBAC
Insured) A-1 1,300,000
-------------------------------------------------------------------
620,000 Sayre, PA, Health Care Facility Authority Hospital Weekly VRDNs
(VHA of PA Capital Asset Finance Program)/ (AMBAC Insured) A-1 620,000
-------------------------------------------------------------------
2,530,000 Sewickley Valley, PA, 3.00% Hospital Authority Revenue Bonds (PNC
Bank N.A. LOC), 12/15/94 NR 2,535,721
-------------------------------------------------------------------
1,550,000 Shippensburg, PA, Area School District, 2.73% TRANs, 6/30/94 NR(3) 1,550,000
-------------------------------------------------------------------
10,000,000 Upper Allegheny, PA, Joint Sanitary Authority, 2.85% Annual TOBs
(Series 1986C)/(AIG Investment Agreement), Mandatory Tender 7/15/94 A-1+ 10,000,000
-------------------------------------------------------------------
2,000,000 Venango, PA, IDA Recovery Revenue, 2.45% CP (Series A)/(National
Westminster Bank, PLC LOC)/(Subject to AMT), Mandatory Tender
5/20/94 A-1+ 2,000,000
-------------------------------------------------------------------
3,785,000 Venango, PA, IDA Recovery Revenue, 2.75% CP (Series A)/(Scrubgrass
Power Co.)/(National Westminster Bank, PLC LOC)/(Subject to AMT),
Mandatory Tender 6/17/94 A-1+ 3,785,000
-------------------------------------------------------------------
4,000,000 Venango, PA, IDA Resource Recovery Bonds, 2.45% CP (Series
1993)/(Scrubgrass Power Co.)/(National Westminster Bank, PLC
LOC)/(Subject to AMT), Mandatory
Tender 5/27/94 A-1+ 4,000,000
-------------------------------------------------------------------
2,000,000 Washington County, PA, HDA Weekly VRDNs (Keystone Diversified
Management Corp.)/(Mellon Bank N.A. LOC) A-1 2,000,000
-------------------------------------------------------------------
1,500,000 Washington County, PA, IDA Weekly VRDNs (Series 1988)/(Cameron
Coca-Cola, Inc.)/(Mellon Bank N.A. LOC) P-1 1,500,000
-------------------------------------------------------------------
1,215,000 Washington County, PA, IDA Weekly VRDNs (Series 1990)/(Mac
Plastics, Inc.)/ (National City Bank LOC)/ (Subject to AMT) A+ 1,215,000
-------------------------------------------------------------------
1,300,000 Washington County, PA, Municipal Authority Facilities Revenue Bonds
Weekly VRDNs (Series 1985)/(Pooled Capital Program)/(Sumitomo Bank
Ltd. LOC) P-1 1,300,000
-------------------------------------------------------------------
5,700,000 Washington County, PA, Weekly VRDNs (Series 1985A)/ (Pooled
Equipment Lease)/(Sanwa Bank Ltd. LOC) VMIG1 5,700,000
-------------------------------------------------------------------
3,000,000 York County, PA, IDA Weekly VRDNs (West Manchester Inn
Associates)/(Mellon Bank N.A. LOC) P-1 3,000,000
------------------------------------------------------------------- ---------------
Total 304,184,689
------------------------------------------------------------------- ---------------
PUERTO RICO--1.0%
-------------------------------------------------------------------
3,000,000 Commonwealth of Puerto Rico, 3.00% TRANs (Series 1994A), 7/29/94 SP-1+ 3,002,701
------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS (AT AMORTIZED COST) $ 307,187,390\
------------------------------------------------------------------- ---------------
</TABLE>
\ Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($306,449,768) at April 30, 1994.
The following abbreviations are used in this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
CP--Commerical Paper
EDA--Economic Development Authority
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
HDA--Hospital Development Authority
HEFA--Health and Education Facilities Authority
HFA--Housing Finance Authority/Agency
IDA--Industrial Development Authority
IDR--Industrial Development Revenue
LOC--Letter of Credit
LOCs--Letters of Credit
PCR--Pollution Control Revenue
TANs--Tax Anticipation Notes
TOBs--Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
VHA--Voluntary Hospitals of America
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $ 307,187,390
------------------------------------------------------------------------------------------------
Cash 716,740
------------------------------------------------------------------------------------------------
Interest receivable 2,130,844
------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 1,470
------------------------------------------------------------------------------------------------
Deferred expenses (Note 2E) 8,494
------------------------------------------------------------------------------------------------ ---------------
Total assets 310,044,938
------------------------------------------------------------------------------------------------
LIABILITIES:
------------------------------------------------------------------------------------------------
Payable for investments purchased $ 3,014,430
--------------------------------------------------------------------------------
Dividends payable 455,569
--------------------------------------------------------------------------------
Payable for Fund shares redeemed 134
--------------------------------------------------------------------------------
Accrued expenses 125,037
-------------------------------------------------------------------------------- --------------
Total liabilities 3,595,170
------------------------------------------------------------------------------------------------ ---------------
NET ASSETS for 306,449,768 shares of beneficial interest outstanding $ 306,449,768
------------------------------------------------------------------------------------------------ ---------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
------------------------------------------------------------------------------------------------
Institutional Service Shares ($285,970,412 / 285,970,412 shares
of beneficial interest outstanding) $1.00
------------------------------------------------------------------------------------------------ ---------------
Cash Series Shares ($20,479,356 / 20,479,356 shares of
beneficial interest outstanding) $1.00
------------------------------------------------------------------------------------------------ ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 4,556,346
---------------------------------------------------------------------------------------------------
EXPENSES:
---------------------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 871,080
------------------------------------------------------------------------------------
Administrative personnel and services fees (Note 4) 189,347
------------------------------------------------------------------------------------
Custodian and portfolio accounting fees 68,365
------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 10,976
------------------------------------------------------------------------------------
Fund share registration costs 29,738
------------------------------------------------------------------------------------
Trustees' fees 4,150
------------------------------------------------------------------------------------
Auditing fees 10,322
------------------------------------------------------------------------------------
Legal fees 4,650
------------------------------------------------------------------------------------
Printing and postage 15,250
------------------------------------------------------------------------------------
Distribution services fees (Note 4) 44,617
------------------------------------------------------------------------------------
Insurance premiums 4,763
------------------------------------------------------------------------------------
Miscellaneous 2,762
------------------------------------------------------------------------------------ -------------
Total expenses 1,256,020
------------------------------------------------------------------------------------
Deduct--
------------------------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) 98,051
------------------------------------------------------------------------------------ -------------
Net expenses 1,157,969
--------------------------------------------------------------------------------------------------- -------------
Net investment income $ 3,398,377
--------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994* 1993
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
-----------------------------------------------------------------------------
OPERATIONS--
-----------------------------------------------------------------------------
Net investment income $ 3,398,377 $ 7,625,175
----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
-----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
-----------------------------------------------------------------------------
Institutional Service Shares (3,235,281) (7,195,929)
-----------------------------------------------------------------------------
Cash Series Shares (163,096) (429,246)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from distributions to shareholders (3,398,377) (7,625,175)
-----------------------------------------------------------------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
-----------------------------------------------------------------------------
Proceeds from sale of shares 416,900,888 932,887,176
-----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 612,874 1,613,211
-----------------------------------------------------------------------------
Cost of shares redeemed (448,143,394) (930,314,734)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Fund share transactions (30,629,632) 4,185,653
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets (30,629,632) 4,185,653
-----------------------------------------------------------------------------
NET ASSETS:
-----------------------------------------------------------------------------
Beginning of period 337,079,400 332,893,747
----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 306,449,768 $ 337,079,400
----------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994* 1993 1992 1991 1990**
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------------
Net investment income 0.01 0.02 0.03 0.05 0.05
---------------------------------------------- --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
----------------------------------------------
Dividends to shareholders from
net investment income (0.01) (0.02) (0.03) (0.05) (0.05)
---------------------------------------------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------- --------- --------- --------- --------- -----------
TOTAL RETURN*** 0.99% 2.24% 3.08% 4.64% 5.78%
----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------------------
Expenses 0.64 (b) 0.57% 0.56% 0.55% 0.50%(b)
----------------------------------------------
Net investment income 1.99 (b) 2.21% 3.04% 4.53% 5.56%(b)
----------------------------------------------
Expense waiver/reimbursement (a) 0.06 (b) 0.12% 0.12% 0.11% 0.18%(b)
----------------------------------------------
SUPPLEMENTAL DATA
----------------------------------------------
Net assets, end of period (000 omitted) $285,970 $318,518 $308,200 $317,165 $275,882
----------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from November 21, 1989 (date of initial
public investment) to October 31, 1990.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH SERIES SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994* 1993 1992 1991**
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
------------------------------------------------------------------
Net investment income 0.01 0.02 0.03 0.03
------------------------------------------------------------------ --------- --------- --------- -----------
LESS DISTRIBUTIONS
------------------------------------------------------------------
Dividends to shareholders from net investment
income (0.01) (0.02) (0.03) (0.03)
------------------------------------------------------------------ --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------ --------- --------- --------- -----------
TOTAL RETURN*** 0.79% 1.83% 2.67% 3.55%
------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
------------------------------------------------------------------
Expenses 1.04 (b) 0.97% 0.96% 0.78%(b)
------------------------------------------------------------------
Net investment income 1.59 (b) 1.88% 2.64% 3.92%(b)
------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.06 (b) 0.12% 0.12% 0.28%(b)
------------------------------------------------------------------
SUPPLEMENTAL DATA
------------------------------------------------------------------
Net assets, end of period (000 omitted) $20,479 $18,561 $24,694 $19,846
------------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from January 25, 1991 (date of initial
public offering) to October 31, 1991.
*** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of Pennsylvania Municipal Cash Trust
(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 Fund provides two classes of shares ("Institutional Service Shares" and
"Cash Series Shares"). Cash Series Shares are identical in all respects to
Institutional Service Shares except that Cash Series Shares will be sold
pursuant to a distribution plan ("Plan") adopted in accordance with Investment
Company Act rule 12b-1.
(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 (GAAP).
A. 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
Investment Company Act of 1940.
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state, than would be a comparable general
tax-exempt mutual fund. In order to reduce the risk associated with such
factors, at April 30, 1994, 69.6% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The
aggregate percentages by financial institutions and agencies ranged from
0.3% to 12.0% of total investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended ("Code"). Distributions to
shareholders are recorded on the ex-dividend date.
C. 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 taxable income.
Accordingly, no provisions for federal tax are necessary.
D. 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
PENNSYLVANIA MUNICIPAL CASH TRUST
--------------------------------------------------------------------------------
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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1994, paid-in capital aggregated $306,449,768.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1994* 1993
<S> <C> <C>
Shares sold 390,359,530 889,559,906
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 438,890 1,201,127
--------------------------------------------------------------------------------
Shares redeemed (423,346,635) (880,442,017)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions (32,548,215) 10,319,016
-------------------------------------------------------------------------------- --------------- ---------------
CASH SERIES SHARES
Shares sold 26,541,358 43,327,270
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 173,984 412,084
--------------------------------------------------------------------------------
Shares redeemed (24,796,759) (49,872,717)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 1,918,583 (6,133,363)
-------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
* Six months ended April 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .50 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION AND SERVICE PLAN--The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the terms of the Plan, the Trust will compensate Federated Securities Corp.
("FSC"), the principal distributor, from the net assets of the Trust to finance
activities intended to result in the sale of the Trust's Cash Series Shares. The
Plan provides that the Trust may incur distribution expenses up to .40 of 1% of
the average daily net assets of the Cash Series Shares, annually, to compensate
FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
personal services for shareholders and the maintenance of shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The fee is based on the size, type and number of accounts and transactions made
by shareholders.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other Funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $183,700,000 and $222,300,000, respectively. These purchases and sales were
conducted on an arms length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fees or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers or Directors of
the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
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.
MASSACHUSETTS
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1994
[LOGO]
FEDERATED SECURITIES CORP.
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
1052806 (6/94)
PRESIDENT'S MESSAGE
--------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Massachusetts
Municipal Cash Trust (the "Fund"), a portfolio of Federated Municipal Trust (the
"Trust"), for the six-month period from November 1, 1993 through April 30, 1994.
The Report includes an interview with the portfolio manager about economic
factors affecting the Fund, followed by Financial Statements containing the
Fund's Portfolio of Investments.
The Fund is a convenient and stable* way to put your cash to work earning
double-tax-free income-- free from federal regular income tax and Massachusetts
state income tax**--through a portfolio concentrated in high-quality, short-term
Massachusetts municipal securities. As a shareholder in the Fund, you have the
opportunity to earn a greater after-tax yield than you could in a comparable
high-quality taxable investment.
From the first day to the last day of the report period, the Fund's total net
assets increased by $25 million to reach $128 million.
The Fund's highly diversified portfolio consisted of municipal bonds issued to
fund projects as varied as education, health care, housing, and mass transit.
Through these bonds, the Fund paid more than
$1.1 million in dividends to all shareholders during the report period.\
No one wants to pay more taxes than are necessary. The Fund is one investment
strategy that can help you lower your tax bill. As a tax sensitive Massachusetts
resident, you can rely on the Fund to seek the best tax-free income
opportunities for your cash. If you are interested in other tax-advantaged
investment strategies, please contact your account representative.
Sincerely,
Glen R. Johnson
President
June 15, 1994
*As a money market mutual fund, the Fund is managed to pursue a stable share
price of $1.00, although there is no guarantee that it will do so. An
investment in the Fund is neither insured nor guaranteed by the U.S.
government.
**Income may be subject to the federal alternative minimum tax.
\Please note that this report includes financial highlights for both
Institutional Shares and BayFunds Shares.
INVESTMENT REVIEW
--------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Mary Jo Ochson
Q What has happened to interest rates and the municipal money markets since
our last reporting?
A Throughout most of last year, economic numbers continued to be more anemic
than anticipated, and inflation appeared to be under control. With little
threat of inflation, the municipal markets responded with some of the
lowest yields over the past decade in both the bond and the money markets.
Despite the low yield environment, total assets of municipal money market funds
reached an all-time high of over $116 billion in March, 1994, illustrating the
popularity of tax-exempt cash investments.
In the first quarter of 1994, signs of economic strength prompted the Federal
Reserve Board (the "Fed") to twice "tighten" or increase short-term interest
rates, moving the Federal funds rate target from 3.0% to 3.50%. The municipal
money market reacted with a corresponding back-up in rates, which was somewhat
exacerbated by $3.2 billion of new fixed-rate supply offered by the State of
California in mid-February. With renewed concerns of economic recovery and
inflation, investors immediately began to demand higher liquidity premiums to
invest further out the yield curve, causing interest rates on national one-year
notes to rise to their highest levels since June, 1992. In April, the municipal
money market was affected by heavy cash outflows as investors withdrew cash to
pay tax bills. Also, in mid-April and mid-May the Fed tightened twice, moving
the Federal funds rate target from 3.50% to 4.25%.
Q How are you managing the portfolio in response to this interest rate
environment?
A For most of the period, I maintained the average maturity in the Fund in
the 50-60 day range. Although we were in an environment of increasing
interest rate expectations, Massachusetts-exempt fixed rate notes and
commercial paper offered a significant yield premium relative to
Massachusetts-exempt Variable Rate Demand Notes (VRDNs). Since April 30, 1994,
however, I have allowed the average maturity of the Fund to slowly decrease from
58 days to 52 days at May 31, 1994. A shorter average maturity, combined with a
higher percentage of liquid VRDNs, will allow the Fund to be even more
responsive to an increasing interest rate environment.
Q Mary Jo, how has the Fund performed over the period?
A On April 30, 1994, the Fund's annualized seven-day net yield and thirty-day
net yield for Institutional Service Shares and BayFunds Shares were 2.23%
and 2.13%, respectively, and 1.93% and 1.83%, respectively, which is
equivalent to taxable yields of 4.20% and 4.01%, respectively,
and 3.63% and 3.44%, respectively.* These numbers illustrate the attractiveness
of the Fund relative to taxable investments.
Q Going forward, what is your outlook for the tax-free money markets and the
Fund?
A I believe that interest rates will continue to rise during the year and
that the Federal funds rate target will be 4.50% by mid-year and 4.75% or
higher by year-end. The Fund's yield should improve if interest rates rise
(of course, Fund performance is not guaranteed). If interest rates do in fact
rise this year, I will continue to keep the average maturity on the short end of
our target average maturity range (40-70 days) and the portfolio liquid, while
choosing carefully and selectively along the yield curve as attractive
fixed-rate opportunities appear.
*Performance quoted represents past performance and is not indicative of future
results.
MASSACHUSETTS MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
MOODY'S,
PRINCIPAL S&P OR
AMOUNT FITCH* VALUE
------------- -------------------------------------------------------------------- ----------- ---------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.1%
-----------------------------------------------------------------------------------
MASSACHUSETTS--97.3%
--------------------------------------------------------------------
$ 1,250,000 Agawam, MA, 2.44% BANs, 9/15/94 NR(3) $ 1,250,184
--------------------------------------------------------------------
3,852,500 Attleboro, MA, 2.75% BANs, 7/8/94 NR 3,853,649
--------------------------------------------------------------------
9,000,000 Attleboro, MA, 3.00% BANs, 8/19/94 NR 9,006,667
--------------------------------------------------------------------
1,625,000 Attleboro, MA, 3.05% BANs, 7/8/94 NR 1,626,428
--------------------------------------------------------------------
2,900,000 Boston, MA, Water & Sewer Commission Weekly VRDNs (Series
1985A)/(Dai-Ichi Kangyo Bank Ltd. LOC) VMIG1 2,900,000
--------------------------------------------------------------------
1,000,000 Boston, MA, Water & Sewer Commission Weekly VRDNs (Series
1985A)/(Dai-Ichi Kangyo Bank Ltd. LOC) VMIG1 1,000,000
--------------------------------------------------------------------
2,650,000 Brockton, MA, 4.00% RANs, 6/10/94 NR 2,653,168
--------------------------------------------------------------------
4,950,000 Clipper, MA, Tax Exempt Trust Weekly VRDNs (Series 1993-1)/(State
Street Bank and Trust BPA) (R) VMIG1 4,950,000
--------------------------------------------------------------------
3,500,000 Commonwealth of Massachusetts, 4.00% SB, 1/1/95 NR(3) 3,528,710
--------------------------------------------------------------------
3,200,000 Framingham, MA, IDA Weekly VRDNs (Perin Corp.)/
(Barclays Bank PLC LOC) A-1+ 3,200,000
--------------------------------------------------------------------
575,000 Gloucester, MA, 4.50% SB (FSA Insured), 11/15/94 NR(1) 579,853
--------------------------------------------------------------------
550,000 Ludlow, MA, Weekly VRDNs (Advanced Drainage Systems, Inc.)/(FNB,
Chicago LOC) P-1 550,000
--------------------------------------------------------------------
1,800,000 Massachusettes Municipal Wholesale Electric Company VRDC Trust,
Weekly VRDNs (Series 1993D)/(AMBAC Insured, Hong Kong Shanghai
Banking Corp. BPA) (R) A-1 1,800,000
--------------------------------------------------------------------
3,000,000 Massachusetts Bay Transit Authority, 2.80% CP (Industrial Bank of
Japan Ltd, Tokyo LOC), Mandatory Tender
7/13/94 A-1 3,000,000
--------------------------------------------------------------------
3,000,000 Massachusetts Bay Transit Authority, 3.75% BANs, 3/1/95 MIG2 3,014,042
--------------------------------------------------------------------
3,720,000 Massachusetts Commonwealth Weekly VRDNs (Series PA32B)/(AMBAC
Insured) (R) VMIG1 3,720,000
--------------------------------------------------------------------
2,000,000 Massachusetts Commonwealth Weekly VRDNs GO Bonds (Series PA13)/(MBIA
and FGIC Insured) (R) VMIG1 2,000,000
--------------------------------------------------------------------
3,000,000 Massachusetts GO Refunding Bonds Weekly VRDNs (Series 1993A)/(AMBAC
Insured) NR(1) 3,000,000
--------------------------------------------------------------------
4,455,000 Massachusetts HEFA Weekly VRDNs (Harvard University Guaranty) A-1+ 4,455,000
--------------------------------------------------------------------
1,930,000 Massachusetts HEFA Weekly VRDNs (Newbury College)/ (Barclays Bank
PLC LOC) P-1 1,930,000
--------------------------------------------------------------------
200,000 Massachusetts HEFA Weekly VRDNs (Series A)/(Brigham & Women's
Hospital)/(Sanwa Bank Ltd. LOC) P-1 200,000
--------------------------------------------------------------------
3,495,000 Massachusetts HEFA Weekly VRDNs (Series A)/(New England Home for
Little Wanderers Issue)/(First National Bank of Boston LOC) P-1 3,495,000
--------------------------------------------------------------------
1,300,000 Massachusetts HEFA Weekly VRDNs (Series B)/(Clark University)/(Sanwa
Bank Ltd. LOC) VMIG1 1,300,000
--------------------------------------------------------------------
4,500,000 Massachusetts HEFA Weekly VRDNs (Series E)/(Capital Asset
Program)/(Sanwa Bank Ltd. LOC) A-1+ 4,500,000
--------------------------------------------------------------------
2,500,000 Massachusetts HEFA Weekly VRDNs (Series G)/(Massachusetts Institute
of Technology Guaranty) NR(1) 2,500,000
--------------------------------------------------------------------
5,000,000 Massachusetts HEFA, 2.10% CP (Series E)/(Tufts University Guaranty),
Mandatory Tender 5/17/94 A-1+ 5,000,000
--------------------------------------------------------------------
1,155,000 Massachusetts HEFA, 2.70% SB (Boston College Guaranty), 6/1/94 NR(3) 1,155,000
--------------------------------------------------------------------
1,500,000 Massachusetts HEFA, 2.85% SB (Series E)/(Brigham & Women's Hospital
Guaranty), 7/1/94 NR(2) 1,500,000
--------------------------------------------------------------------
600,000 Massachusetts HEFA, 2.90% SB (Morton Hospital &
Medical Center)/(Connie Lee Insured), 7/1/94 NR(1) 599,897
--------------------------------------------------------------------
2,000,000 Massachusetts HFA SFH, 2.75% Annual TOBs (Series 23)/ (FGIC
Insured), Mandatory Tender 6/1/94 A-1+ 2,000,000
--------------------------------------------------------------------
1,000,000 Massachusetts HFA SFH, 2.95% Annual TOBs (Series 25)/ (Bayerische
Landesbank LOC), Mandatory Tender 9/1/94 A-1+ 1,000,000
--------------------------------------------------------------------
1,900,000 Massachusetts IDA Weekly VRDNs (Williston Northampton School)/
(National Westminster Bank PLC LOC) P-1 1,900,000
--------------------------------------------------------------------
300,000 Massachusetts IFA PCR Weekly VRDNs (Series 1992A)/ (Holyoke Water
Power Co.)/(Canadian Imperial Bank of Commerce LOC) VMIG1 300,000
--------------------------------------------------------------------
3,000,000 Massachusetts IFA PCR, 2.45% CP (Series 1993A)/(New England Power
Company Guaranty), Mandatory Tender
5/26/94 A-1 3,000,000
--------------------------------------------------------------------
1,500,000 Massachusetts IFA PCR, 2.40% CP (New England Power Company
Guaranty), Mandatory Tender 5/25/94 A-1 1,500,000
--------------------------------------------------------------------
2,000,000 Massachusetts IFA PCR, 2.65% CP (Series 1993A)/(New England Power
Company Guaranty), Mandatory Tender
7/21/94 A-1 2,000,000
--------------------------------------------------------------------
2,000,000 Massachusetts IFA PCR, 2.90% CP (Series 1993A)/(New England Power
Company Guaranty), Mandatory Tender
8/15/94 A-1 2,000,000
--------------------------------------------------------------------
1,000,000 Massachusetts IFA Weekly VRDNs (Berkshire School)/ (National
Westminster Bank PLC LOC) VMIG1 1,000,000
--------------------------------------------------------------------
1,300,000 Massachusetts IFA Weekly VRDNs (Groton School
Project)/(National Westminster Bank PLC LOC) VMIG1 1,300,000
--------------------------------------------------------------------
6,325,000 Massachusetts IFA Weekly VRDNs (Kendall Square, Inc.)/ (National
Westminster Bank PLC LOC) A-1+ 6,325,000
--------------------------------------------------------------------
4,000,000 Massachusetts IFA Weekly VRDNs (Series 1992A)/(Ogden
Haverhill)/(Union Bank of Switzerland LOC) A-1+ 4,000,000
--------------------------------------------------------------------
2,000,000 Massachusetts IFA Weekly VRDNs (Series 1993B)/(New England Deaconess
Association)/(Banque Paribas LOC) A-1 2,000,000
--------------------------------------------------------------------
925,000 Massachusetts IFA Weekly VRDNs (Series A)/(Hockomock YMCA)/(Westpac
Banking Corp. LOC) P-1 925,000
--------------------------------------------------------------------
2,500,000 New Bedford, MA, 3.75% BANs (Fleet National Bank BPA) 8/12/94 P-1 2,506,574
--------------------------------------------------------------------
3,330,000 North Andover, MA, 3.00% BANs, 6/29/94 NR 3,331,308
--------------------------------------------------------------------
1,923,000 Northampton, MA, 2.47% BANs, 6/29/94 NR 1,923,212
--------------------------------------------------------------------
1,080,000 Norwood, MA, IDRB, 3.125% Annual TOBs (Dash Realty Trust)/(Fleet
National Bank LOC), Mandatory Tender
7/1/94 SP-1 1,080,000
--------------------------------------------------------------------
1,000,000 Peabody, MA, 3.03% BANs, 2/17/95 NR 1,000,000
--------------------------------------------------------------------
1,500,000 Springfield, MA, 4.10% RANs (Fleet National Bank BPA), 5/20/94 P-1 1,501,010
--------------------------------------------------------------------
2,300,000 Woods Hole, MA, Marthas Vineyard Steamship Authority, 3.25% BANs,
11/30/94 NR 2,305,736
--------------------------------------------------------------------
1,000,000 Worcester, MA, 2.98% BANs (BayBank BPA ), 8/24/94 P-2 1,001,141
--------------------------------------------------------------------
2,000,000 Worcester, MA, 3.00% BANs (BayBank BPA), 8/24/94 P-2 2,002,781
-------------------------------------------------------------------- ---------------
Total 124,169,360
-------------------------------------------------------------------- ---------------
PUERTO RICO--1.8%
--------------------------------------------------------------------
$ 2,290,000 Puerto Rico Industrial, Medical and Environmental PCA, 2.90% Annual
TOBs (Series 1983A)/(Reynolds Metals Co.)/ (ABN AMRO Bank N.V. LOC),
Optional Tender
9/1/94 A-1+ $ 2,290,749
-------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS (AT AMORTIZED COST) (NOTE 2A) $ 126,460,109\
-------------------------------------------------------------------- ---------------
</TABLE>
\ Also represents cost for federal tax purposes.
(r) Denotes restricted securities which are subject to restrictions on resale
under Federal Securities laws. These securities have been determined to be
liquid under criteria established by the Board of Trustees (Note 2F).
* See Notes to Portfolio of Investments on page 9.
Note: The categories of investments are shown as a percentage of net assets
($127,640,891) at April 30, 1994.
The following abbreviations are used in this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
BANs--Bond Anticipation Notes
BPA--Bond Purchase Agreement
CP--Commercial Paper
FGIC--Financial Guaranty Insurance Company
FSA--Financial Security Assurance
GO--General Obligation
HEFA--Health and Education Facilities Authority
HFA--Housing Finance Authority/Agency
IDA--Industrial Development Authority
IDRB--Industrial Development Revenue Bonds
IFA--Industrial Finance Authority/Agency
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance
PCA--Pollution Control Authority
PCR--Pollution Control Revenue
RANs--Revenue Anticipation Notes
SB--Serial Bond
SFH--Single Family Housing
TOBs--Tender Option Bonds
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
--------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
S&P
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
FITCH
Fitch's short-term ratings place greater emphasis on the existence of liquidity
necessary to meet the issuer's obligations in a timely manner.
F-1 Strongest degree of assurance for timely payment. Those issues determined to
provide exceptionally strong credit quality are given a plus (+)
designation.
F-2 Notes reflecting a degree of assurance for timely payment only slightly less
in degree than the highest category.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
S&P
Standard & Poor's assigns dual ratings to all long-term debt issues that have as
part of their provisions a variable rate demand feature. The first rating
(long-term rating) addresses the likelihood of repayment of principal and
interest when due, and the second rating (short-term rating) describes the
demand characteristics. Several examples are AAA/A-1+, AA/A-1K, and A/A-1. (The
definitions for the long-term and the short-term ratings are provided below.)
MOODY'S
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG rating can be
assigned a 1 or 2 designation using the same definitions described above for the
MIG rating.
FITCH
Fitch usually assigns two ratings to long-term debt issues that include
provisions for a variable rate demand feature. The long-term rating addresses
the ability of the obligor to pay debt service and the short-term rating
addresses the timely payment of the demand feature. Examples of rating
designation are as follows: AAA/F-1+, AA/F-1K, and A/F-1. (The definitions for
the long-term and short-term ratings are provided below.)
COMMERCIAL PAPER (CP) RATINGS
S&P
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-1."
MOODY'S
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations.
The following is an explanation of the Fitch ratings. These ratings are not
referenced in the Portfolio of Investments.
FITCH
F-1 Issues assigned this rating reflect a stong degree of assurance for timely
payment. Those issuers determined to possess the strongest degree of
assurance for timely payment are denoted with a plus (+) sign designation.
F-2 Issuers carrying this rating have a satisfactory degree of assurance for
timely payment, but the margin of safety is not as great as the "F-1+" and
"F-1" categories.
LONG-TERM DEBT RATINGS
(INVESTMENT GRADE)
S&P
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest than
debt rated in higher ratings categories.
MOODY'S
Aaa Bonds that are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large margin and principal
is secure. While the various protective elements are likely to change, such
changes which can be foreseen are most unlikely to impair the fundamentally
strong position of such issues.
Aa Bonds that are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A Bonds that are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered
adequate, but elements may be present that suggest a susceptibility to
impairment some time in the future.
Baa Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
FITCH
AAA Bonds that are rated AAA are of the highest credit quality. The obligor has
an exceptionally strong ability to pay debt service.
AA Bonds that are rated AA are of very high quality. The obligor has a very
strong ability to pay debt service. Debt rated in this category may also
have a (+) or (-) sign with a rating to indicate the relative position
within the rating category.
A Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to
be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and
therefore impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P, Moody's, or Fitch with respect to short-term
indebtedness. However, management considers them to be of comparable quality to
securities rated in one of the two highest short-term ratings categories by a
nationally recognized statistical ratings organization.
NR(1)The underlying issuer/obligor/guarantor has other outstanding long-term
debt rated "AAA" by Standard & Poor's, "Aaa" by Moody's or "AAA" by Fitch.
NR(2)The underlying issuer/obligor/guarantor has other outstanding long-term
debt rated "AA" by Standard & Poor's, "Aa" by Moody's or "AA" by Fitch.
NR(3)The underlying issuer/obligor/guarantor has other outstanding long-term
debt rated "A" by Standard & Poor's, Moody's, or Fitch.
NR(4)The underlying issuer/obligor/guarantor has other outstanding long-term
debt rated "BBB" by Standard & Poor's, "Baa" by Moody's, or "BBB" by Fitch.
MASSACHUSETTS MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
-------------------------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $ 126,460,109
-------------------------------------------------------------------------------------------------
Cash 505,266
-------------------------------------------------------------------------------------------------
Interest receivable 800,811
-------------------------------------------------------------------------------------------------
Deferred expenses (Note 2E) 4,058
------------------------------------------------------------------------------------------------- ---------------
Total assets 127,770,244
-------------------------------------------------------------------------------------------------
LIABILITIES:
------------------------------------------------------------------------------------
Dividends payable $ 112,981
------------------------------------------------------------------------------------
Accrued expenses 16,372
------------------------------------------------------------------------------------ -----------
Total liabilities 129,353
------------------------------------------------------------------------------------------------- ---------------
NET ASSETS for 127,640,891 shares of beneficial interest outstanding $ 127,640,891
------------------------------------------------------------------------------------------------- ---------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
-------------------------------------------------------------------------------------------------
Institutional Service Shares ($96,084,045 / 96,084,045 shares of beneficial interest outstanding)
$1.00
------------------------------------------------------------------------------------------------- ---------------
BayFunds Shares ($31,556,846 / 31,556,846 shares of beneficial interest outstanding) $1.00
------------------------------------------------------------------------------------------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
---------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 1,454,970
---------------------------------------------------------------------------------------------------
EXPENSES:
--------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 298,293
--------------------------------------------------------------------------------------
Administrative personnel and services (Note 4) 109,939
--------------------------------------------------------------------------------------
Custodian and portfolio accounting fees 18,874
--------------------------------------------------------------------------------------
Sub-Transfer Agent fees--BayFunds Shares 12,733
--------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 11,577
--------------------------------------------------------------------------------------
Shareholder service fees--Institutional Service Shares (Note 4) 8,549
--------------------------------------------------------------------------------------
Shareholder service fees--BayFunds Shares (Note 4) 2,638
--------------------------------------------------------------------------------------
Fund share registration costs 16,165
--------------------------------------------------------------------------------------
Trustees' fees 1,349
--------------------------------------------------------------------------------------
Auditing fees 7,823
--------------------------------------------------------------------------------------
Legal fees 6,500
--------------------------------------------------------------------------------------
Printing and postage 25,000
--------------------------------------------------------------------------------------
Insurance premiums 4,250
--------------------------------------------------------------------------------------
Taxes 500
--------------------------------------------------------------------------------------
Miscellaneous 4,165
-------------------------------------------------------------------------------------- -----------
Total expenses 528,355
--------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee (Note 4) 187,500
-------------------------------------------------------------------------------------- -----------
Net expenses 340,855
--------------------------------------------------------------------------------------------------- -------------
Net investment income $ 1,114,115
--------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1994* 1993
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
-----------------------------------------------------------------------------
OPERATIONS--
-----------------------------------------------------------------------------
Net investment income $ 1,114,115 $ 1,958,060
----------------------------------------------------------------------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
-----------------------------------------------------------------------------
Dividends to shareholders from net investment income:
-----------------------------------------------------------------------------
Institutional Service Shares (886,232) (1,874,757)
-----------------------------------------------------------------------------
BayFunds Shares (227,883) (83,303)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from distributions to shareholders (1,114,115) (1,958,060)
----------------------------------------------------------------------------- ---------------- ----------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
-----------------------------------------------------------------------------
Proceeds from sale of shares 175,410,543 277,390,674
-----------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 473,859 451,819
-----------------------------------------------------------------------------
Cost of shares redeemed (150,910,703) (260,744,847)
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets from Fund share transactions 24,973,699 17,097,646
----------------------------------------------------------------------------- ---------------- ----------------
Change in net assets 24,973,699 17,097,646
-----------------------------------------------------------------------------
NET ASSETS:
-----------------------------------------------------------------------------
Beginning of period 102,667,192 85,569,546
----------------------------------------------------------------------------- ---------------- ----------------
End of period $ 127,640,891 $ 102,667,192
----------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C> <C>
1994* 1993 1992 1991 1990**
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------------------------
Net investment income 0.01 0.02 0.03 0.05 0.03
------------------------------------------------------- --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
-------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.02) (0.03) (0.05) (0.03)
------------------------------------------------------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------- --------- --------- --------- --------- -----------
TOTAL RETURN*** 0.94% 1.99% 2.87% 4.63% 2.59%
-------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-------------------------------------------------------
Expenses 0.55%(b) 0.53% 0.34% 0.30% 0.17%(b)
-------------------------------------------------------
Net investment income 1.89%(b) 1.97% 2.82% 4.48% 5.66%(b)
-------------------------------------------------------
Expense waiver/reimbursement (a) 0.31%(b) 0.43% 0.55% 0.69% 0.57%(b)
-------------------------------------------------------
SUPPLEMENTAL DATA
-------------------------------------------------------
Net assets, end of period (000 omitted) $96,084 $84,524 $85,570 $81,681 $63,483
-------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from May 18, 1990 (date of initial public
investment) to October 31, 1990.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--BAYFUNDS SHARES
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31,
1994* 1993**
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
------------------------------------------------------------------------------------------
Net investment income 0.01 0.01
------------------------------------------------------------------------------------------ --------- -----------
LESS DISTRIBUTIONS
------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.01) (0.01)
------------------------------------------------------------------------------------------ --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
------------------------------------------------------------------------------------------ --------- -----------
TOTAL RETURN*** 0.89% 1.25%
------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
------------------------------------------------------------------------------------------
Expenses 0.65%(b) 0.65%(b)
------------------------------------------------------------------------------------------
Net investment income 1.79%(b) 1.85%(b)
------------------------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.31%(b) 0.43%(b)
------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $31,557 $18,143
------------------------------------------------------------------------------------------
</TABLE>
* Six months ended April 30, 1994 (unaudited).
** Reflects operations for the period from March 8, 1993 (date of initial
public investment) to October 31, 1993.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of twelve, non-diversified portfolios. The financial
statements included herein are only those of Massachusetts Municipal Cash Trust
(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 Fund provides two classes of shares ("Institutional Service Shares" and
"BayFunds Shares"). BayFunds Shares are identical in all respects to
Institutional Service Shares except that BayFunds Shares are subject to a
sub-transfer agent fee.
(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 (GAAP).
A. 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
Investment Company Act of 1940.
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state, than would be a comparable general
tax-exempt mutual fund. In order to reduce the risk associated with such
factors, at April 30, 1994, 73.5% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The
aggregate percentages by financial institutions and agencies ranged from
0.24% to 8.32% of total investments.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended ("Code"). Distributions to
shareholders are recorded on the ex-dividend date.
C. 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 taxable income.
Accordingly, no provisions for federal tax are necessary.
D. 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under Federal securities law 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 Trustees. The Fund
will not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7 under
the Investment Company Act of 1940. Additional information on each
restricted security held at April 30, 1994 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Clipper, MA, Tax Exempt Trust
Weekly Variable Rate Demand Notes 1/6/94 $ 4,950,000
Massachusetts Municipal Wholesale
Electric Company VRDC Trust
Weekly Variable Rate Demand Notes 6/11/93 1,800,000
Massachusetts Commonwealth
Weekly Variable Rate Demand Notes 7/1/93 2,000,000
Massachusetts Commonwealth
Weekly Variable Rate Demand Notes 11/18/93 3,720,000
</TABLE>
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1994, capital paid-in aggregated $127,640,891.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1994* 1993
<S> <C> <C>
-------------------------------------------------------------------------------- --------------- ---------------
Shares sold 149,500,706 254,082,837
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 245,203 367,572
--------------------------------------------------------------------------------
Shares redeemed (138,186,211) (255,495,608)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 11,559,698 (1,045,199)
-------------------------------------------------------------------------------- --------------- ---------------
BAYFUNDS SHARES
--------------------------------------------------------------------------------
Shares sold 25,909,837 23,307,837
--------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 228,656 84,247
--------------------------------------------------------------------------------
Shares redeemed (12,724,492) (5,249,239)
-------------------------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 13,414,001 18,142,845
-------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
* Six months ended April 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to .50 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive its fee and reimburse certain operating expenses of the Fund.
Adviser can modify or terminate this voluntary waiver and reimbursement at any
time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the fee is based on
the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during any fiscal year shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS") for Institutional Service Shares and
BayBank Systems, Inc. for BayFunds Shares ("BFS"), the Fund will pay FSS and BFS
up to .25 of 1% of average net assets of each class for the period. This fee is
to obtain certain personal services for shareholders and the maintenance of
shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT--Federated Services Company ("FServ")
serves as transfer agent and dividend disbursing agent for the Fund. The FServ
fee is based on the size, type and number of accounts and transactions made by
shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($44,840) and start-up
administrative service expenses ($43,014) were borne initially by Adviser. The
Fund has agreed to reimburse the Adviser at an annual rate of .005 of 1% of
average daily net assets and .01 of 1% of average daily net assets for
organizational and start-up administrative expenses, respectively, until
expenses initially borne by Adviser are fully reimbursed or the expiration of
five years after May 18, 1990, date the Fund's portfolio first became effective,
whichever occurs earlier. For the six months ended April 30, 1994, the Fund paid
$2,875 and $5,751, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1994, the Fund
engaged in purchase and sale transactions with other funds advised by the
Adviser pursuant to Rule 17a-7 of the Investment Company Act of 1940 amounting
to $81,500,000 and $82,300,000, respectively. These purchases and sales were
conducted on an arms length basis and transacted for cash consideration only, at
independent current market prices and without brokerage commissions, fees or
other remuneration.
Certain of the Officers and Trustees of the Trust are Officers and Trustees or
Directors of the above companies.
TRUSTEES OFFICERS
--------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
John A. Staley, IV
Vice President
David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by a Fund's prospectus which contains
facts concerning its objective and policies, management
fees, expenses and other information.
