CONNECTICUT
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of Federated Investors
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229105
0052406 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Connecticut
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements.
Connecticut Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Connecticut residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
Connecticut municipal securities, issued to fund projects as varied as
education, health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $3.6
million in total distributions to shareholders, and the fund's total net assets
increased from $190.4 million to $209.4 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
*Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Jeff A. Kozemchack, CFA, Vice President & Portfolio Manager
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield of the fund's
Institutional Service Shares rose from 2.75% on November 1, 1994, to 3.76% on
April 30, 1995.*
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A We added to the fund's holdings of short maturity commercial paper (CP) and
VRDNs in order to increase the responsiveness to changes in short-term
interest rates. VRDNs adjust quickly to changes in Fed policy as well as
supply and demand imbalances that are unique to the municipal money markets. The
purchase of CP typically allows us to pick up an additional yield premium over
VRDNs over time, while still retaining portfolio responsiveness to further rate
increases. Also, the average maturity of the fund was targeted within a range of
40 to 55 days, with an emphasis on the shorter end of the target range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become attractive versus comparable maturity taxable
securities.
* Past performance does not guarantee future results. Yield will vary.
CONNECTICUT MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- --------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--100.9%
- ------------------------------------------------------------------------------------
CONNECTICUT--97.1%
---------------------------------------------------------------------
$ 3,750,000 Capitol Region Education Council, CT, 5.35% BANs (First National Bank
of Boston LOC), 11/15/1995 P-1 $ 3,756,774
---------------------------------------------------------------------
10,000,000 Clipper Connecticut Tax Exempt Trust, Weekly VRDNs (Series 1994-1) VMIG1 10,000,000
---------------------------------------------------------------------
5,325,000 Connecticut Development Authority Weekly VRDNs (Jewish Community
Center of Greater New Haven)/(Fleet National Bank LOC) P-1 5,325,000
---------------------------------------------------------------------
1,539,400 Connecticut Development Authority Weekly VRDNs (RSA Corp.)/(Barclays
Bank PLC LOC)/(Subject to AMT) P-1 1,539,400
---------------------------------------------------------------------
12,000,000 Connecticut Development Authority Weekly VRDNs (Series 1985)/(Airport
Hotel)/(RK Bradley Associates Ltd. Partnership)/(Daiwa Securities
Ltd. and Royal Bank of Canada LOCs) A-2 12,000,000
---------------------------------------------------------------------
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
---------------------------------------------------------------------
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
---------------------------------------------------------------------
9,500,000 Connecticut State Development Authority PCR Weekly VRDNs (Series
1993A)/(Western Massachusetts Electric Co.)/(Union Bank of
Switzerland LOC) A-1+ 9,500,000
---------------------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- --------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
CONNECTICUT--CONTINUED
---------------------------------------------------------------------
$ 1,500,000 Connecticut State Development Authority Solid Waste
Disposal Facility, PCR Weekly VRDNs (Series 1993B)/
(Connecticut Light & Power Co.)/(Union Bank of
Switzerland LOC)/(Subject to AMT) A-1+ $ 1,500,000
---------------------------------------------------------------------
4,200,000 Connecticut Development Authority Weekly VRDNs
(Capital District Energy Center)/(Canadian Imperial
Bank of Commerce LOC)/(Subject to AMT) P-1 4,200,000
---------------------------------------------------------------------
700,000 Connecticut Development Authority Weekly VRDNs (Capital District
Energy Center)/(Canadian Imperial Bank of Commerce LOC)/(Subject to
AMT) P-1 700,000
---------------------------------------------------------------------
9,500,000 Connecticut State Development Health Care Facilities Weekly VRDNs
(Independence Living, Inc.)/(Daiwa Bank Ltd. LOC) VMIG2 9,500,000
---------------------------------------------------------------------
6,700,000 Connecticut Municipal Electric Energy Cooperative,
Power Supply System Revenue Bonds, 3.95% CP (Series
1995A)/(Fleet National Bank LOC), Mandatory Tender
7/20/1995 A-1 6,700,000
---------------------------------------------------------------------
2,880,000 Connecticut State Development Authority Weekly VRDNs (Banta
Associates)/(Marine Midland Bank N.A. and Hong Kong ShangHai Banking
Corp. LOCs)/(Subject to AMT) P-1 2,880,000
---------------------------------------------------------------------
3,000,000 Connecticut State Economic Recovery Notes Weekly VRDNs A-1+ 3,000,000
---------------------------------------------------------------------
1,700,000 Connecticut State HEFA Weekly VRDNs (Charlotte Hungerfield
Hospital)/(Mitsubishi Bank Ltd. LOC) VMIG1 1,700,000
---------------------------------------------------------------------
3,900,000 Connecticut State HEFA Weekly VRDNs (Series A)/
(Forman School Issue)/(National Westminster Bank PLC LOC) A-1+ 3,900,000
---------------------------------------------------------------------
1,500,000 Connecticut State HEFA Weekly VRDNs (Series A)/(Kent
School)/(Barclays Bank PLC LOC) A-1+ 1,500,000
---------------------------------------------------------------------
1,000,000 Connecticut State HEFA Weekly VRDNs (Series A)/
(Pomfret School Issue)/(Credit Local de France LOC) VMIG1 1,000,000
---------------------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- --------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
CONNECTICUT--CONTINUED
---------------------------------------------------------------------
$ 5,500,000 Connecticut State HEFA Weekly VRDNs (Series B)/ (Bridgeport
Hospital)/(Fuji Bank Ltd. LOC) A-1 $ 5,500,000
---------------------------------------------------------------------
5,000,000 Connecticut State HEFA Weekly VRDNs (Series A)/(Kent
School)/(Barclays Bank PLC LOC) A-1+ 5,000,000
---------------------------------------------------------------------
3,875,000 Connecticut State HEFA, 3.90% CP (Series L)/(Yale
University), Mandatory Tender 5/24/1995 A-1+ 3,875,000
---------------------------------------------------------------------
4,300,000 Connecticut State HEFA, 4.20% CP (Series N)/(Yale
University), Mandatory Tender 5/18/1995 A-1+ 4,300,000
---------------------------------------------------------------------
1,900,000 Connecticut State HFA, 3.55% Annual TOBs (Series G-1)/ (Housing
Mortgage Finance Program), Mandatory Tender 5/15/1995 A-1+ 1,900,000
---------------------------------------------------------------------
3,735,000 Connecticut State HFA, 3.65% Annual TOBs (Series G-2)/ (Housing
Mortgage Finance Program)/(Subject to AMT), Mandatory Tender
5/15/1995 A-1+ 3,735,000
---------------------------------------------------------------------
4,750,000 Connecticut State HFA, 4.15% CP (Series 1990C)/(Subject to AMT),
Mandatory Tender 7/19/1995 A-1+ 4,750,000
---------------------------------------------------------------------
3,200,000 Connecticut State HFA, 4.15% CP (Series 1990D)/(Subject to AMT),
Mandatory Tender 5/8/1995 A-1+ 3,200,000
---------------------------------------------------------------------
3,245,000 Connecticut State HFA, 4.15% CP (Series 1990D)/(Subject to AMT),
Mandatory Tender 7/21/1995 A-1+ 3,245,000
---------------------------------------------------------------------
6,750,000 (a)Connecticut State HFA, 4.40% Annual TOBs (Series H-2), 9/1/1995 A-1+ 6,750,000
---------------------------------------------------------------------
2,100,000 Connecticut State Resource Recovery Authority, 3.875% RANs (Fleet
National Bank BPA), 6/22/1995 A 2,100,792
---------------------------------------------------------------------
1,800,000 Connecticut State Transportation Infrastructure Authority Weekly
VRDNs (Industrial Bank of Japan Ltd. LOC) A+ 1,800,000
---------------------------------------------------------------------
2,000,000 (b)Connecticut State, GO Bonds Weekly VRDNs (PA-50) VMIG1 2,000,000
---------------------------------------------------------------------
8,000,000 Connecticut State Special Assessment Unemployment Compensation, 3.85%
Annual TOBs (Series 1993C)/(FGIC Insured), Mandatory Tender 7/1/1995 A-1+ 8,000,000
---------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
CONNECTICUT--CONTINUED
---------------------------------------------------------------------
$ 4,815,000 East Lyme, CT, 4.25% BANs, 8/3/1995 NR(3) $ 4,818,443
---------------------------------------------------------------------
4,325,000 Groton City, CT, 4.50% BANs, 11/15/1995 NR(3) 4,335,659
---------------------------------------------------------------------
7,600,000 Hartford, CT, Redevelopment Authority Weekly VRDNs (Underwood
Towers)/(FSA Insured) A-1+ 7,600,000
---------------------------------------------------------------------
4,550,000 Meriden, CT, 4.50% BANs (Lot C), 8/16/1995 NR(3) 4,555,765
---------------------------------------------------------------------
550,000 Middlebury, CT, 4.15% BANs (Lot A), 5/31/1995 NR(1) 550,068
---------------------------------------------------------------------
1,480,000 Middlebury, CT, 5.00% BANs (Lot B), 2/8/1996 NR(1) 1,482,186
---------------------------------------------------------------------
3,200,000 Milford, CT, 4.56% BANs, 11/15/1995 NR(2) 3,204,311
---------------------------------------------------------------------
1,700,000 New Haven, CT, Weekly VRDNs (Starter Sportswear)/ (National
Westminster Bank PLC LOC)/(Subject to AMT) P-1 1,700,000
---------------------------------------------------------------------
2,500,000 Plainfield, CT, 4.60% TANs, 5/3/1995 NR 2,500,054
---------------------------------------------------------------------
3,415,000 Rocky Hill, CT, 4.25% BANs, 12/15/1995 NR(3) 3,421,045
---------------------------------------------------------------------
7,500,000 Stamford, CT, Housing Authority Weekly VRDNs (Series 1994)/(Morgan
Street Project)/(Deutsche Bank Financial, Inc. LOC)/(Subject to AMT) VMIG1 7,500,000
---------------------------------------------------------------------
2,250,000 Waterbury, CT, 5.625% BANs, 9/27/1995 NR(4) 2,253,303
--------------------------------------------------------------------- --------------
Total 203,276,800
--------------------------------------------------------------------- --------------
PUERTO RICO--1.7%
---------------------------------------------------------------------
3,500,000 Puerto Rico Industrial, Medical and Environmental PCA, 4.30% CP
(Series 1988)/(Inter American University of Puerto Rico)/(Bank of
Tokyo Ltd. LOC), Mandatory Tender 5/11/1995 A-1+ 3,500,000
--------------------------------------------------------------------- --------------
VIRGIN ISLANDS--2.1%
---------------------------------------------------------------------
4,500,000 Virgin Islands HFA, 5.00% Semi-Annual TOBs Home Mortgage Revenue
Bonds (Series 1994B)/(FGIC Capital Markets Services Investment
Agreement)/(Subject to AMT), Mandatory Tender 5/1/1995 SP-l+ 4,500,000
--------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST(C) $ 211,276,800
--------------------------------------------------------------------- --------------
</TABLE>
(a) Denotes when-issued security.
(b) Denotes restricted securities which are subject to resale under Federal
Securities laws. These securities have been determined to be liquid under
criteria established by the Board of Trustees.
(c) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 9.
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
Note: The categories of investments are shown as a percentage of net assets
($209,436,009) at April 30, 1995.
The following abbreviation(s) are used throughout this portfolio:
AMT--Alternative Minimum Tax
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
LOC(s)--Letter(s) of Credit
PCA--Pollution Control Authority
PCR--Pollution Control Revenue
PLC--Public Limited Company
RANs--Revenue Anticipation Notes
TANs--Tax Anticipation Notes
TOBs--Tender Option Bonds
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral Part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the long-
term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
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 edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
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 which suggest a susceptibility to impairment sometime in the future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1)The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2)The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3)The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $ 211,276,800
- -------------------------------------------------------------------------------------------------
Cash 352,391
- -------------------------------------------------------------------------------------------------
Income receivable 1,757,813
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 5,807
- ------------------------------------------------------------------------------------------------- --------------
Total assets 213,392,811
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 3,428,301
- -----------------------------------------------------------------------------------
Payable for shares redeemed 1,800
- -----------------------------------------------------------------------------------
Income distribution payable 464,825
- -----------------------------------------------------------------------------------
Accrued expenses 61,876
- ----------------------------------------------------------------------------------- ------------
Total liabilities 3,956,802
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 209,436,009 shares outstanding $ 209,436,009
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($209,436,009 / 209,436,009 shares 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, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 4,230,388
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 550,747
- ----------------------------------------------------------------------------------------
Administrative personnel and services fee 83,383
- ----------------------------------------------------------------------------------------
Custodian fees 14,319
- ----------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 12,116
- ----------------------------------------------------------------------------------------
Directors'/Trustees' fees 1,810
- ----------------------------------------------------------------------------------------
Auditing fees 7,240
- ----------------------------------------------------------------------------------------
Legal fees 7,240
- ----------------------------------------------------------------------------------------
Portfolio accounting fees 22,030
- ----------------------------------------------------------------------------------------
Shareholder services fee 132,179
- ----------------------------------------------------------------------------------------
Share registration costs 11,403
- ----------------------------------------------------------------------------------------
Printing and postage 5,249
- ----------------------------------------------------------------------------------------
Insurance premiums 3,620
- ----------------------------------------------------------------------------------------
Taxes 905
- ----------------------------------------------------------------------------------------
Miscellaneous 2,355
- ---------------------------------------------------------------------------------------- ----------
Total expenses 854,596
- ----------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 201,094
- ---------------------------------------------------------------------------------------- ----------
Net expenses 653,502
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 3,576,886
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------------
Net investment income $ 3,576,886 $ 4,066,496
- -------------------------------------------------------------------- ---------------------- --------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------------
Distributions from net investment income (3,576,886) (4,066,496)
- -------------------------------------------------------------------- ---------------------- --------------------
SHARE TRANSACTIONS--
- --------------------------------------------------------------------
Proceeds from sale of Shares 258,584,209 486,727,225
- --------------------------------------------------------------------
Net asset value of Shares issued to shareholders
in payment of distributions declared 937,151 1,166,410
- --------------------------------------------------------------------
Cost of Shares redeemed (240,508,553) (437,916,644)
- -------------------------------------------------------------------- ---------------------- --------------------
Change in net assets resulting from Share transactions 19,012,807 49,976,991
- -------------------------------------------------------------------- ---------------------- --------------------
Change in net assets 19,012,807 49,976,991
- --------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------
Beginning of period 190,423,202 140,446,211
- -------------------------------------------------------------------- ---------------------- --------------------
End of period $ 209,436,009 $ 190,423,202
- -------------------------------------------------------------------- ---------------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30,
1995 YEAR ENDED OCTOBER 31, 1994
(UNAUDITED) 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------
Net investment income 0.02 0.02 0.02 0.03 0.04 0.05
- ---------------------------------------------- ------ --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- ----------------------------------------------
Distributions from net investment income (0.02) (0.02) (0.02) (0.03) (0.04) (0.05)
- ---------------------------------------------- ------ --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- ------ --------- --------- --------- --------- -----------
TOTAL RETURN(B) 1.62% 2.12% 1.96% 2.68% 4.04% 5.54%
- ----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------
Expenses 0.59%(c) 0.59% 0.57% 0.56% 0.56% 0.48%(c)
- ----------------------------------------------
Net investment income 3.25%(c) 2.11% 1.95% 2.66% 3.94% 5.32%(c)
- ----------------------------------------------
Expense waiver/reimbursement(d) 0.18%(c) 0.18% 0.25% 0.30% 0.21% 0.28%(c)
- ----------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------
Net assets, end of period (000 omitted) $209,436 $190,423 $140,446 $140,118 $140,113 $138,378
- ----------------------------------------------
</TABLE>
(a) Reflects operations for the period from November 1, 1989 (date of initial
public investment) to October 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS--Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the
"Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
64.0% 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 value of investments insured by
or supported (backed) by a letter of credit for any one institution or
agency does not exceed 9.2% of total investments.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In some cases, the restricted securities may be resold without registration
upon exercise of a demand feature. Such restricted securities may be
determined to be liquid under criteria established by the Board of Trustees
(the "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 Act. Additional information on each restricted
security held at April 30, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
Connecticut State General Obligation Bonds, Weekly VRDNs 12/27/93 $ 2,000,000
<S> <C> <C>
</TABLE>
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, 1995, capital paid-in aggregated $209,436,009. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994
<S> <C> <C>
Shares sold 258,584,209 486,727,225
- --------------------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 937,151 1,166,410
- --------------------------------------------------------------------
Shares redeemed (240,508,553) (437,916,644)
- -------------------------------------------------------------------- ---------------------- --------------------
Net change resulting from share transactions 19,012,807 49,976,991
- -------------------------------------------------------------------- ---------------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. This
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisors), common
Directors/Trustees, and/or common Officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$106,235,000 and $131,535,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit
Insurance Corporation, the Federal Reserve Board, or any other government
agency. Investment in mutual funds involves investment risk, including possible
loss of
principal. Although money market funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the 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, 1995
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of Federated Investors
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229881
314229204
0052405 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Pennsylvania
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995. The fund consists of two classes of
shares known as Institutional Service Shares and Cash Series Shares.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Service Shares and Cash
Series Shares.
Pennsylvania Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Pennsylvania residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
Pennsylvania municipal securities, issued to fund projects as varied as
education, health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $4.4
million in total distributions to shareholders. As of this report, the fund's
total net assets are $261.3 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* Income may be subject to the federal alternative minimum tax. Shares of the
fund are exempt from Pennsylvania's intangibles tax on personal property.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager Jeff A. Kozemchak
Q
Jeff, can you comment on the changes in money market rates during the
reporting period?
A
In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q
How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A
Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
- --------------------------------------------------------------------------------
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield of the fund's
Institutional Service Shares rose from 2.90% on November 1, 1994, to 3.86% on
April 30, 1995.* For the Cash Series Shares, the seven-day net yield rose from
2.50% on November 1, 1994, to 3.46% on April 30, 1995.*
Q
Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A
We continued to fully utilize and add to our positions of short maturity
commercial paper (CP) and VRDNs in order to maintain the responsiveness of
the portfolio to changes in short-term interest rates. VRDNs adjust quickly
to changes in Fed policy as well as supply and demand imbalances that are unique
to the municipal money markets. The purchase of CP typically allows us to pick
up an additional yield premium over VRDNs over time, while still retaining
portfolio responsiveness to further rate increases. Also, because of tight
fixed-rate note supply conditions, the average maturity of the fund was targeted
within a broader range of 45 to 60 days, with an emphasis on the shorter end of
the target range.
Q
What is your overall outlook for rates in the near future?
A
Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become attractive versus comparable maturity taxable
securities.
* Past performance does not guarantee future results. Yield will vary.
PENNSYLVANIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--100.4%
- --------------------------------------------------------------------------
PENNSYLVANIA--100.4%
--------------------------------------------------------
$1,700,000 Allegheny County, PA, IDA Weekly VRDNs (Series
1991B)/(Shandon, Inc.)/(PNC Bank N.A. LOC)/
(Subject to AMT) P-1 $ 1,700,000
--------------------------------------------------------
5,000,000 Allegheny County, PA, IDA PCR, 3.45% TOBs (Series
1992A)/(Duquesne Light Power Co.)/(Canadian Imperial
Bank of Commerce LOC), Mandatory Tender 10/17/1995 P-1 5,000,000
--------------------------------------------------------
1,000,000 Allegheny County, PA, IDA Weekly VRDNs (Series 1991)/
(Mine Safety Appliances Co.)/(Sanwa Bank Ltd. LOC) P-1 1,000,000
--------------------------------------------------------
3,175,000 Allegheny County, PA, IDA Weekly VRDNs, Adjustable Rate
Commercial Development Revenue Bonds (Series
1992)/(Eleven Parkway Center Associates)/ (Mellon Bank
N.A. LOC) A-1 3,175,000
--------------------------------------------------------
6,500,000 Allegheny County, PA, IDA, 4.75% CP (Duquesne Light
Power Co.)/(Barclays Bank PLC LOC), Mandatory Tender
12/7/1995 A-1+ 6,500,000
--------------------------------------------------------
3,000,000 Beaver County, PA, PCR IDA, 4.20% CP (Series 1992E)/
(Toledo Edison Co.)/(Toronto Dominion Bank LOC),
Mandatory Tender 5/3/1995 P-1 3,000,000
--------------------------------------------------------
2,000,000 Berks County, PA, 5.20% TRANs (Series 1995), 12/31/1995 NR(3) 2,000,000
--------------------------------------------------------
1,580,000 Berks County, PA, IDA Weekly VRDNs (Beacon
Container)/(Corestates Bank NA, Philadelphia LOC)/
(Subject to AMT) P-1 1,580,000
--------------------------------------------------------
1,320,000 Berks County, PA, IDA Weekly VRDNs (Quaker Maid Meats,
Inc.)/(Meridian Bank LOC)/(Subject to AMT) VMIG1 1,320,000
--------------------------------------------------------
2,000,000 Berks County, PA, IDA Weekly VRDNs (Series 1988)/ (Arrow
International, Inc.)/(Corestates Bank N.A., Philadelphia
LOC)/(Subject to AMT) P-1 2,000,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$2,960,000 Bucks County, PA, IDA Weekly VRDNs (Pennsylvania
Associates)/(Meridian Bank LOC) P-1 $ 2,960,000
--------------------------------------------------------
1,000,000 Bucks County, PA, IDA Weekly VRDNs (Series 1986)/ (Winks
Lane, Inc.)/(Mellon Bank N.A. LOC) P-1 1,000,000
--------------------------------------------------------
5,090,000 Bucks County, PA, IDA Weekly VRDNs (Series 1991)/ (Cabot
Medical Corp.)/(Meridian Bank LOC)/
(Subject to AMT) VMIG1 5,090,000
--------------------------------------------------------
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
--------------------------------------------------------
2,435,000 Butler County, PA, IDA Weekly VRDNs (Series 1994)/
(Lue-Rich Holding Co., Inc.)/(ABN AMRO Bank N.V. LOC) A-1+ 2,435,000
--------------------------------------------------------
700,000 Cambria County, PA, IDA Weekly VRDNs (Cambria
Cogeneration Corp.)/(Fuji Bank Ltd. LOC)/
(Subject to AMT) A-1 700,000
--------------------------------------------------------
1,900,000 Carbon County, PA, IDA Weekly VRDNs (Summit Management &
Utilities, Inc.)/(PNC Bank, N.A. LOC)/ (Subject to AMT) A-1 1,900,000
--------------------------------------------------------
5,000,000 Carbon County, PA, IDA, 4.30% CP (Panther Creek)/
(National Westminster Bank, PLC LOC)/(Subject to AMT),
Mandatory Tender 5/15/1995 A-1+ 5,000,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$1,545,000 Carbon County, PA, IDA, 4.30% CP (Panther Creek)/
(National Westminster Bank, PLC LOC)/(Subject to AMT),
Mandatory Tender 6/13/1995 A-1+ $ 1,545,000
--------------------------------------------------------
2,000,000 Carbon County, PA, IDA, 4.30% CP (Series A)/(Panther
Creek)/(National Westminster Bank, PLC LOC)/(Subject to
AMT), Mandatory Tender 7/20/1995 A-1+ 2,000,000
--------------------------------------------------------
1,620,000 Carbon County, PA, IDR Resource Recovery Bonds, 4.35% CP
(Panther Creek)/(National Westminster Bank PLC
LOC)/(Subject to AMT), Mandatory Tender 5/15/1995 A-1+ 1,620,000
--------------------------------------------------------
2,510,000 Carlisle, PA, Area Hospital Authority, 7.45% (Cumberland
Crossing)/(Prerefunded), 8/1/1995 (@100) Aaa 2,527,662
--------------------------------------------------------
7,300,000 Clearfield County, PA, IDA Weekly VRDNs (Penn Traffic
Co.)/(ABN AMRO Bank N.V. LOC)/(Subject to AMT) P-1 7,300,000
--------------------------------------------------------
3,000,000 Clinton County, PA, IDA Weekly VRDNs (Armstrong World
Industries, Inc.)/(Mellon Bank N.A. LOC) P-1 3,000,000
--------------------------------------------------------
3,505,000 Clinton County, PA, Municipal Authority Weekly VRDNs
(Series A)/(Lock Haven Hospital)/(Mellon Bank N.A. LOC) P-1 3,505,000
--------------------------------------------------------
1,600,000 Cumberland County, PA, IDA Weekly VRDNs (Series
1994)/(Lane Enterprises, Inc.)/(Meridian Bank
LOC)/(Subject to AMT) P-1 1,600,000
--------------------------------------------------------
1,500,000 Delaware County, PA, PCR, 3.95% CP (Philadelphia
Electric Co.)/(FGIC Insured), Mandatory Tender 5/31/1995 A-1+ 1,500,000
--------------------------------------------------------
1,200,000 Delaware County, PA, PCR, 4.30% CP (Philadelphia
Electric Co.)/(FGIC Insured), Mandatory Tender 7/20/1995 A-1+ 1,200,000
--------------------------------------------------------
5,000,000 Downington, PA, Area School District, 4.50% TRANs
(Series 1994), 6/30/1995 NR(2) 5,007,137
--------------------------------------------------------
1,900,000 East Hempfield Township, PA, IDA Weekly VRDNs (Series
1985)/(Yellow Freight System, Inc.)/(Wachovia
Bank & Trust Co. N.A. LOC) A-1 1,900,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$5,300,000 Erie County, PA, Hospital Authority Weekly VRDNs (St.
Vincent Health System)/(Fuji Bank Ltd. LOC) A-1 $ 5,300,000
--------------------------------------------------------
500,000 Erie County, PA, IDA Weekly VRDNs (P.H.B., Inc.)/
(PNC Bank N.A. LOC)/(Subject to AMT) P-1 500,000
--------------------------------------------------------
525,000 Erie County, PA, IDA Weekly VRDNs (R. P.C. Valve, Inc.)/
(PNC Bank N.A. LOC)/(Subject to AMT) P-1 525,000
--------------------------------------------------------
600,000 Erie County, PA, IDA Weekly VRDNs (Series B)/(P.H.B.,
Inc.)/(PNC Bank N.A. LOC)/(Subject to AMT) P-1 600,000
--------------------------------------------------------
1,725,000 Erie County, PA, IDA Weekly VRDNs Multi-Mode Revenue
Reference Bonds (Corry Manor, Inc.)/(PNC Bank N.A. LOC) A-1 1,725,000
--------------------------------------------------------
600,000 Forest County, PA, IDA Weekly VRDNs (Industrial Timber &
Land Co.)/(National City Bank LOC) P-1 600,000
--------------------------------------------------------
1,405,000 Forest County, PA, IDA Weekly VRDNs (Marienville
Healthcare Facility)/(PNC Bank N.A. LOC) P-1 1,405,000
--------------------------------------------------------
2,000,000 Franklin County, PA, IDR Weekly VRDNs (Guarriello
Limited Partnership)/(PNC Bank N.A. LOC)/
(Subject to AMT) P-1 2,000,000
--------------------------------------------------------
2,000,000 Governor Mifflin School District, 3.85% TRANs
(Series 1994), 6/30/1995 NR(3) 2,000,316
--------------------------------------------------------
2,900,000 Lackawanna County, PA, IDA Weekly VRDNs
(Series 1992)/(HEM Project)/(Corestates Bank N.A. LOC)/
(Subject to AMT) P-1 2,900,000
--------------------------------------------------------
2,000,000 Lancaster (City of), PA, 4.35% TRANs (Series 1995),
5/10/1995 NR(3) 2,000,000
--------------------------------------------------------
2,350,000 Lancaster, PA, Higher Education Authority Weekly VRDNs
(Series 1995)/(Franklin and Marshall College) VMIG1 2,350,000
--------------------------------------------------------
2,856,092 Lawrence County, PA, IDA Weekly VRDNs (Series 1989A)/
(Ellwood Uddeholm Steel Co.)/(Society National
Bank LOC) P-1 2,856,092
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$3,300,000 Lehigh County, PA, IDA Weekly VRDNs (Cedar Crest
College)/(PNC Bank N.A. LOC) A-1 $ 3,300,000
--------------------------------------------------------
3,100,000 Lehigh County, PA, IDA Weekly VRDNs (Series 1989A)/
(Hershey Pizza Co., Inc.)/(PNC Bank N.A. LOC)/(Subject
to AMT) A-1 3,100,000
--------------------------------------------------------
1,005,000 McKean County, PA, IDA Weekly VRDNs Multi-Mode Revenue
Reference Bonds (Bradford Manor, Inc.)/(Marine Bank LOC) A-1 1,005,000
--------------------------------------------------------
3,300,000 Monroe County, PA, IDA PCR Weekly VRDNs (Cooper
Industries)/(Sanwa Bank Ltd. LOC) A-1+ 3,300,000
--------------------------------------------------------
2,600,000 Montgomery County, PA, IDA Weekly VRDNs (Series
1984)/(General Signal Corp.)/(Morgan Guaranty Trust Co.
LOC) P-1 2,600,000
--------------------------------------------------------
1,400,000 Montgomery County, PA, IDA Weekly VRDNs (Series
1992)/(RJI Limited Partnership)/(Meridian Bank
LOC)/(Subject to AMT) VMIG1 1,400,000
--------------------------------------------------------
4,480,000 Montgomery County, PA, IDA Weekly VRDNs Commercial
Development Revenue Bonds (Series 1992)/(Hickory
Pointe)/(First Fidelity Bank, N.A. LOC) P-1 4,480,000
--------------------------------------------------------
3,500,000 Montgomery County, PA, IDR Weekly VRDNs (Series 84)/
(Seton Co.)/(Banque Paribas LOC) A-1 3,500,000
--------------------------------------------------------
2,625,000 Moon Township, PA, IDA Weekly VRDNs (Airport Hotel
Associates)/(ABN-AMRO Bank N.V., Amsterdam LOC) A-1+ 2,625,000
--------------------------------------------------------
2,000,000 Northampton County, PA, IDA, 4.30% CP (Citizens
Utilities Co.)/(Subject to AMT), Mandatory Tender
5/11/1995 A-1+ 2,000,000
--------------------------------------------------------
9,000,000 Northampton County, PA, IDA, 4.40% CP (Citizens
Utilities Co.)/(Subject to AMT), Mandatory Tender
5/8/1995 A-1+ 9,000,000
--------------------------------------------------------
4,000,000 Pennsylvania Authority for Improvements in
Municipalities Weekly VRDNs (Pooled Hospital Equipment &
Leasing Program)/(MBIA Insured)/(Swiss Bank Corporation
PTC) VMIG1 4,000,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$1,875,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs (Cyrogenics,
Inc.)/(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 $ 1,875,000
--------------------------------------------------------
325,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs (D.D.I.,
Inc.)/(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 325,000
--------------------------------------------------------
625,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs (Ram Forest
Products)/(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 625,000
--------------------------------------------------------
1,300,000 Pennsylvania EDA Revenue Bonds Weekly VRDNs (Series
G4)/(Matamura Products, Inc.)/(PNC Bank N.A.
LOC)/(Subject to AMT) Aa3 1,300,000
--------------------------------------------------------
3,300,000 Pennsylvania EDA Weekly VRDNs (Industrial Scientific
Corp.)/(Mellon Bank N.A. LOC)/(Subject to AMT) P-1 3,300,000
--------------------------------------------------------
1,300,000 Pennsylvania EDA Weekly VRDNs (Joseph J. Brunner,
Inc.)/(PNC Bank N.A. LOC)/(Subject to AMT) A-1+ 1,300,000
--------------------------------------------------------
750,000 Pennsylvania EDA Weekly VRDNs (PNC Bank N.A. LOC) P-1 750,000
--------------------------------------------------------
750,000 Pennsylvania EDA Weekly VRDNs (Pioneer Fluid)/
(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 750,000
--------------------------------------------------------
900,000 Pennsylvania EDA Weekly VRDNs (Reale Associates)/ (PNC
Bank N.A. LOC)/(Subject to AMT) Aa3 900,000
--------------------------------------------------------
550,000 Pennsylvania EDA Weekly VRDNs (Series B8)/(Payne
Printing Co.)/(PNC Bank N.A. LOC)/(Subject to AMT) Aa3 550,000
--------------------------------------------------------
975,000 Pennsylvania EDA Weekly VRDNs (Walnut & Craig Street
Associates)/(PNC Bank N.A. LOC)/(Subject to AMT) P-1 975,000
--------------------------------------------------------
7,300,000 Pennsylvania HFA, 4.35% TOBs (First National Bank,
Chicago LOC), Optional Tender 10/1/1995 NR(2) 7,300,000
--------------------------------------------------------
2,660,000 Pennsylvania HFA, 4.875% TOBs SFH (Series O)/(Meridian
Bank LOC)/(Subject to AMT), Optional Tender 4/1/1996 NR(2) 2,660,000
--------------------------------------------------------
995,000 Pennsylvania HFA, Section 8 Assisted Residential
Development Refunding Bonds Weekly VRDNs (Series
1992A)/(Capital Guaranty Insured, Citibank N.A. BPA) NR(1) 995,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$3,000,000 Pennsylvania Higher Education Assistance Agency Weekly
VRDNs (Fuju Bank Ltd. LOC)/(Subject to AMT) VMIG1 $ 3,000,000
--------------------------------------------------------
1,100,000 Pennsylvania Higher Education Facilities Authority
Weekly VRDNs (Carnegie-Mellon University Guaranty) A+ 1,100,000
--------------------------------------------------------
9,405,000 Pennsylvania State Higher Education Facilities
Authority, 4.20% Annual TOBs (Carnegie-Mellon
University), Optional Tender 11/1/1995 A-1 9,405,000
--------------------------------------------------------
3,190,000 Pennsylvania State Higher Education Facilities
Authority, 4.50% (Carnegie-Mellon University), 5/1/1996 A-1 3,190,000
--------------------------------------------------------
1,945,000 Pennsylvania State Higher Education Facilities
Authority, College & University Revenues, 7.70% (Drexel
University)/ (Prerefunded), 11/1/1995 (@102) AAA 2,016,236
--------------------------------------------------------
3,100,000 Pennsylvania State University, 5.25%, 4/5/1996 MIG1 3,123,448
--------------------------------------------------------
3,000,000 Pennsylvania State University, 4.00% BANs (Series 1994),
5/4/1995 NR(2) 3,000,119
--------------------------------------------------------
1,000,000 Philadelphia, PA, 4.75% TRANs (Series B)/(Corestates
Bank N.A. LOC), 6/15/1995 SP-1 1,001,010
--------------------------------------------------------
2,200,000 Philadelphia, PA, 4.375% GO CP (Series 1990)/(Fuji Bank
Ltd. LOC), Mandatory Tender 7/20/1995 A-1 2,200,000
--------------------------------------------------------
5,000,000 Philadelphia, PA, 4.75% TRANs (Series A)/(Canadian
Imperial Bank of Commerce LOC), 6/15/1995 SP-1+ 5,005,051
--------------------------------------------------------
1,700,000 Philadelphia, PA, IDA Commercial Development Revenue
Bonds, 3.95% Annual TOBs (Series B)/(Economy Inn)/
(First National Bank of Boston LOC), Optional Tender
7/1/1995 P-1 1,700,000
--------------------------------------------------------
3,750,000 Philadelphia, PA, IDA Commercial Development Revenue
Bonds, 3.95% Annual TOBs (Series A)/(Economy Inn)/
(First National Bank of Boston LOC), Optional Tender
7/1/1995 P-1 3,750,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$7,000,000 Philadelphia, PA, IDA, 4.00% Annual TOBs (Suite Hotel)/
(First National Bank of Boston LOC), Optional Tender
6/1/1995 P-1 $ 7,000,000
--------------------------------------------------------
9,000,000 Philadelphia, PA, Redevelopment Authority Weekly VRDNs
(Series 1985)/(Franklin Town Towers)/(Marine Midland
Bank N.A. LOC) A-2 9,000,000
--------------------------------------------------------
1,750,000 Phoenixville, PA, School District, 4.50% TRANs (Series
1994), 6/30/1995 NR(3) 1,752,077
--------------------------------------------------------
1,700,000 Sayre, PA, Health Care Facilities Authority Weekly VRDNs
(VHA of Pennsylvania Capital Asset Finance Program)/
(AMBAC Insured) A-1+ 1,700,000
--------------------------------------------------------
620,000 Sayre, PA, Health Care Facilities Authority Weekly VRDNs
(VHA of Pennsylvania Capital Asset Program)/(AMBAC
Insured) A-1+ 620,000
--------------------------------------------------------
2,500,000 Temple University Commonwealth System of Higher
Education, 4.50% BANs (Series 1994), 5/24/1995 SP-1+ 2,500,986
--------------------------------------------------------
5,900,000 Venango, PA, IDA, 4.20% CP (Series A)/(Scrubgrass Power
Corp.)/(National Westminster Bank, PLC LOC)/(Subject to
AMT), Mandatory Tender 7/18/1995 A-1+ 5,900,000
--------------------------------------------------------
3,785,000 Venango, PA, IDA, 4.25% CP (Series A)/(Scrubgrass Power
Corp.)/(National Westminster Bank, PLC LOC)/(Subject to
AMT), Mandatory Tender 7/19/1995 A-1+ 3,785,000
--------------------------------------------------------
2,100,000 Venango, PA, IDA, 4.30% CP (Series 1993)/(Scrubgrass
Power Corp.)/(National Westminster Bank, PLC LOC)/
(Subject to AMT), 5/18/1995 A-1+ 2,100,000
--------------------------------------------------------
4,000,000 Venango, PA, IDA, 4.35% CP (Series 1993)/(Scrubgrass
Power Corp.)/(National Westminster Bank, PLC LOC)/
(Subject to AMT), Mandatory Tender 5/16/1995 A-1+ 4,000,000
--------------------------------------------------------
1,045,000 Washington County, PA, IDA Weekly VRDNs (Series
1990)/(Mac Plastics, Inc.)/(National City Bank
LOC)/(Subject to AMT) AA 1,045,000
--------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
--------------------------------------------------------
$1,350,000 Washington County, PA, IDA Weekly VRDNs (Series
1988)/(Cameron Coca-Cola, Inc.)/(Mellon Bank N.A. LOC) P-1 $ 1,350,000
--------------------------------------------------------
3,700,000 Washington County, PA, Weekly VRDNs (Series 1985A)/
(Pooled Equipment Lease)/(Sanwa Bank Ltd. LOC) VMIG1 3,700,000
--------------------------------------------------------
1,100,000 West Cornwall Township, PA, Municipal Authority Weekly
VRDNs (Series 1995)/(Lebanon Valley Brethern Home)/
(Meridian Bank LOC) P-1 1,100,000
--------------------------------------------------------
3,000,000 York County, PA, IDA Weekly VRDNs (West Manchester Inn
Associates)/(Mellon Bank N.A. LOC) P-1 3,000,000
-------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (A) $262,230,134
-------------------------------------------------------- ------------
</TABLE>
(a) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 14.
Note: The categories of investments are shown as a percentage of net assets
($261,250,783) at April 30, 1995.
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following abbreviation(s) are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
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
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
PTC -- Pass Through Certificates
SFH -- Single Family Housing
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
VHA -- Veterans Housing Administration
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1Very 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 INVESTORS SERVICE, INC.
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.
MIG1This 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.
MIG2This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
- --------------------------------------------------------------------------------
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG rating can be
assigned a 1 or 2 designation using the same definitions described above for the
MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.
A-2Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
AAABonds 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
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized 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 which suggest a susceptibility to impairment sometime in the future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" by Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $262,230,134
- --------------------------------------------------------------------------------
Cash 381,918
- --------------------------------------------------------------------------------
Income receivable 2,487,966
- --------------------------------------------------------------------------------
Receivable for shares sold 1,185
- -------------------------------------------------------------------------------- ------------
Total assets 265,101,203
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $3,190,000
- -------------------------------------------------------------------
Payable for shares redeemed 7,581
- -------------------------------------------------------------------
Income distribution payable 649,633
- -------------------------------------------------------------------
Accrued expenses 3,206
- ------------------------------------------------------------------- ----------
Total liabilities 3,850,420
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 261,250,783 shares outstanding $261,250,783
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
Institutional Service Shares: ($240,310,071 / 240,310,071 shares outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
Cash Series Shares: ($20,940,712 / 20,940,712 shares 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, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest $5,298,651
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 661,900
- ----------------------------------------------------------------------
Administrative personnel and services fee 100,212
- ----------------------------------------------------------------------
Custodian fees 26,476
- ----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 5,295
- ----------------------------------------------------------------------
Directors'/Trustees' fees 2,648
- ----------------------------------------------------------------------
Auditing fees 3,972
- ----------------------------------------------------------------------
Legal fees 3,972
- ----------------------------------------------------------------------
Portfolio accounting fees 25,152
- ----------------------------------------------------------------------
Distribution services fee-Cash Series Shares 48,749
- ----------------------------------------------------------------------
Shareholder services fee-Cash Series Shares 29,249
- ----------------------------------------------------------------------
Share registration costs 18,534
- ----------------------------------------------------------------------
Printing and postage 9,267
- ----------------------------------------------------------------------
Insurance premiums 3,972
- ----------------------------------------------------------------------
Miscellaneous 1,320
- ---------------------------------------------------------------------- ----------
Total expenses 940,718
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $ 2,250
- -----------------------------------------------------------
Waiver of distribution services fee--Cash Series Shares 29,249 31,499
- ----------------------------------------------------------- -------- ----------
Net expenses 909,219
- ------------------------------------------------------------------------------------ ----------
Net investment income $4,389,432
- ------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------
Net investment income $ 4,389,432 $ 6,997,846
- -------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------
Distributions from net investment income:
- --------------------------------------------------------------
Institutional Service Shares (4,029,883) (6,625,711)
- --------------------------------------------------------------
Cash Series Shares (359,549) (372,135)
- -------------------------------------------------------------- ------------- -------------
Change in net assets resulting from distributions to
shareholders (4,389,432) (6,997,846)
- -------------------------------------------------------------- ------------- -------------
SHARE TRANSACTIONS--
- --------------------------------------------------------------
Proceeds from sale of Shares 469,328,125 800,515,592
- --------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 1,005,108 1,321,124
- --------------------------------------------------------------
Cost of Shares redeemed (456,594,861) (891,403,705)
- -------------------------------------------------------------- ------------- -------------
Change in net assets resulting from Share transactions 13,738,372 (89,566,989)
- -------------------------------------------------------------- ------------- -------------
Change in net assets 13,738,372 (89,566,989)
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Beginning of period 247,512,411 337,079,400
- -------------------------------------------------------------- ------------- -------------
End of period $ 261,250,783 $ 247,512,411
- -------------------------------------------------------------- ------------- -------------
</TABLE>
(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>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1995 ------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990(A)
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------
Net investment income 0.02 0.02 0.02 0.03 0.05 0.05
- ------------------------------------
-------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
- ------------------------------------
Distributions from net investment
income (0.02) (0.02) (0.02) (0.03) (0.05) (0.05)
- ------------------------------------
-------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------
-------- ------ ------ ------ ------ ------
TOTAL RETURN (B) 1.67% 2.25% 2.24% 3.08% 4.64% 5.78%
- ------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------
Expenses 0.65%(c) 0.64% 0.57% 0.56% 0.55% 0.50%(c)
- ------------------------------------
Net investment income 3.35%(c) 2.19% 2.21% 3.04% 4.53% 5.56%(c)
- ------------------------------------
Expense waiver/reimbursement (d) 0.00%(c) 0.02% 0.12% 0.12% 0.11% 0.18%(c)
- ------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------
Net assets, end of period
(000 omitted) $240,310 $229,160 $318,518 $308,200 $317,165 $275,882
- ------------------------------------
</TABLE>
(a) Reflects operations for the period from November 21, 1989 (date of initial
public investment) to October 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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>
SIX MONTHS
ENDED APRIL YEAR ENDED OCTOBER 31,
30, 1995 -----------------------------------------
(UNAUDITED) 1994 1993 1992 1991(A)
----------- -------- -------- -------- --------
<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 0.02 0.03 0.03
- -------------------------------------- -------- ------ ------ ------ ------
LESS DISTRIBUTIONS
- --------------------------------------
Distributions from net investment
income (0.01) (0.02) (0.02) (0.03) (0.03)
- -------------------------------------- -------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------- -------- ------ ------ ------ ------
TOTAL RETURN (B) 1.47% 1.84% 1.83% 2.67% 3.55%
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 1.05%(c) 1.04% 0.97% 0.96% 0.78%(c)
- --------------------------------------
Net investment income 2.95%(c) 1.73% 1.88% 2.64% 3.92%(c)
- --------------------------------------
Expense waiver/reimbursement (d) 0.24%(c) 0.18% 0.12% 0.12% 0.28%(c)
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000
omitted) $20,941 $18,352 $18,561 $24,694 $19,846
- --------------------------------------
</TABLE>
(a) Reflects operations for the period from January 25, 1991 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present 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 offers two classes of shares: Institutional Service and Cash
Series.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
CONCENTRATION OF CREDIT RISK--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
tax-exempt mutual fund that invests nationally. In order to reduce the credit
risk associated with such factors, at April 30, 1995, 79.8% 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 value of investments insured by or supported (backed) by a
letter of credit for any one institution or agency does not exceed 9.9% of
total investments.
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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, 1995, capital paid-in aggregated $261,250,783. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED APRIL OCTOBER 31,
30, 1995 1994
------------ ------------
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
- ----------------------------------------------------------------
Shares sold 428,431,008 749,671,233
- ----------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 650,216 937,173
- ----------------------------------------------------------------
Shares redeemed (417,931,409) (839,966,777)
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from Institutional Service Shares
transactions 11,149,815 (89,358,371)
- ---------------------------------------------------------------- ------------ ------------
CASH SERIES SHARES
- ----------------------------------------------------------------
Shares sold 40,897,117 50,844,359
- ----------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 354,892 383,951
- ----------------------------------------------------------------
Shares redeemed (38,663,452) (51,436,928)
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from Cash Series Shares transactions 2,588,557 (208,618)
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from share transactions 13,738,372 (89,566,989)
- ---------------------------------------------------------------- ------------ ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund's Cash Series Shares. The Plan provides that the Fund may incur
distribution expenses up to .40 of 1% of the average daily net assets of the
Cash Series Shares, annually, to compensate FSC. The distributor may voluntarily
choose to waive a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Cash Series Shares for the period. This
fee is to obtain certain services for shareholders and to maintain the
shareholder accounts. For the six months ended April 30, 1995, Institutional
Service Shares did not incur a Shareholder Services fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. This
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$195,900,000 and $195,067,500, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- -----------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson Vice President
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Vice President and Treasurer
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance they
will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
- --------------------------------------------------------------------------------
MINNESOTA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229873
314229402
1052807 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Minnesota
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995. The fund consists of two classes of
shares known as Institutional Shares and Cash Series Shares.
We begin this report with our customary update from the fund's portfolio
manager, Mary Jo Ochson, who will discuss market activity and changes in the
fund's strategy relative to that activity. Mary Jo's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Shares and Cash Series
Shares.
Minnesota Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Minnesota residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
Minnesota municipal securities, issued to fund projects as varied as education,
health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid more than $5.7
million in total distributions to shareholders. As of this report, the fund's
total net assets are $326.0 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Mary Jo Ochson
Q
Mary Jo, can you comment on the changes in money market rates during the
reporting period?
A
In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period, as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q
How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A
Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The portfolio of the fund responded favorably to the overall increase in
short-term interest rates over the reporting period. The seven-day net yield* of
the fund's Institutional Shares rose from 3.09% at the beginning of the
reporting period to 4.29% on April 30, 1995. For the fund's Cash Series Shares,
the seven-day net yield* rose from 2.65% at the beginning of the period to 3.89%
on April 30, 1995.
* Past performance does not guarantee future results. Yield will vary.
- --------------------------------------------------------------------------------
Q
What is your overall outlook for rates in the near future?
A
Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We would
expect that Fed policy will be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. As such, short-term interest rates should
trade within a range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly in mid-June, 1995,
cheapening note levels. We plan on average to extend our maturities during that
period of heavy issuance as yields on fixed-rate notes may become attractive
versus comparable maturity taxable securities.
Q
What was your strategy during the period?
A
The fund's average maturity was targeted within a range of 45-55 days, with
an emphasis on the longer end of our target. Early in the reporting period,
the yields on fixed-rate notes and longer term commercial paper were very
attractive versus both comparable taxable securities and variable rate paper.
The yield advantage reflected market expectations of several more rate hikes in
short-term interest rates by the Fed. Since early 1995, note yields have
declined, although still very attractive versus taxables. Our strategy
throughout the reporting period was to maintain our average maturity band with
selective purchases of fixed-rate notes and commercial paper.
Q
The last time we were updated on Minnesota, the outlook was very positive
and included several rating agency upgrades. Is the current outlook still
positive?
A
The overall outlook is still quite strong for the state of Minnesota, and
the ratings for the state have not changed since our last report (Fitch
Investors Service, Inc. AAA, Moody's Investors Service, Inc. Aa1, and
Standard and Poor's Ratings Group AA+).**
Minnesota came through the last recession with very strong economic statistics.
For instance, employment (excluding farming) grew at nearly three times the
national average over the 1990-1994 time period; over 66,000 new jobs were
created over the past year alone. The largest recent job increases were in
retail trade and business services. In manufacturing, the biggest gains were in
industrial machinery and equipment, printing and publishing, and wood products.
In 1994, unemployment in Minnesota (3.8%) was also lower than the national
average (6.2%). Income levels and employment continue to grow faster than the
national averages and are predicted to do so for the next few years.
These strong economic indicators, as well as Minnesota's continuing conservative
debt management, spending discipline, and budgetary reform bode well for the
future success of the state and the fund.
** Ratings are subject to change.
MINNESOTA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--100.8%
- --------------------------------------------------------------------------
MINNESOTA--100.0%
-------------------------------------------------------
$6,000,000 Anoka City, MN, 4.15% CP Solid Waste Disposal Authority
(United Power Associates)/(NRUCFC Guaranty)/(Subject to
AMT), Mandatory Tender 7/14/95 A-1+ $ 6,000,000
-------------------------------------------------------
5,000,000 Bass Brook, MN, PCR, 4.55% CP (Minnesota Power And
Light Company Guaranty), Mandatory Tender 5/17/95 P-2 5,000,000
-------------------------------------------------------
2,950,000 Baudette, MN, IDR Weekly VRDNs (Series 1989)/
(Reid Rowell, Inc.)/(NationsBank of Georgia, N.A.
LOC)/(Subject to AMT) P-1 2,950,000
-------------------------------------------------------
8,400,000 Becker, MN, PCR, 4.10% CP (Series 1992A)/(Northern
States Power Co. Guaranty), Mandatory Tender 6/15/95 A-1+ 8,400,000
-------------------------------------------------------
4,000,000 Becker, MN, PCR, 4.15% CP (Series 1993A & B)/(Northern
States Power Co. Guaranty), Mandatory Tender 8/18/95 A-1+ 4,000,000
-------------------------------------------------------
2,000,000 Becker, MN, PCR, 4.15% CP (Series 1993B)/(Northern
States Power Co. Guaranty), Mandatory Tender 7/26/95 A-1+ 2,000,000
-------------------------------------------------------
5,000,000 Becker, MN, PCR, 4.15% CP (Series 1993B)/(Northern
States Power Co. Guaranty), Mandatory Tender 7/18/95 A-1+ 5,000,000
-------------------------------------------------------
5,000,000 Becker, MN, PCR, 4.40% CP (Series 1993A & B)/(Northern
States Power Co. Guaranty), Mandatory Tender 7/21/95 A-1+ 5,000,000
-------------------------------------------------------
1,200,000 Beltrami & Clearwater Counties, MN, ISD #38, 4.08% RANs
GO Aid Anticipation Certificates of Indebtedness
(Series 1994)/(State of Minnesota Guaranty), 9/14/95 NR(2) 1,200,126
-------------------------------------------------------
5,000,000 Bloomington, MN, Multi-Family Housing Weekly VRDNs
(Crow/Bloomington Apartments)/(Citibank N.A. LOC) P-1 5,000,000
-------------------------------------------------------
3,490,000 Brooklyn Center, MN, ISD #286, 4.70% TANs (State of
Minnesota Guaranty), 3/27/96 NR(2) 3,492,998
-------------------------------------------------------
8,175,000 Burnsville, MN, Multi-Family Housing Weekly VRDNs
(Berkshire of Burnsville)/(Sumitomo Bank Ltd. LOC) A-1 8,175,000
-------------------------------------------------------
760,000 Byron, MN, IDB Weekly VRDNs (Schmidt Printing,
Inc.)/(Norwest Bank Minnesota LOC)/(Subject to AMT) A-1+ 760,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$1,250,000 Center Hospital, MN, 5.05% Revenue Bonds (Hennepin
County Guaranty), 6/1/95 NR(2) $ 1,250,885
-------------------------------------------------------
1,325,000 Chaska, MN, IDA Weekly VRDNs (Aeration Industries)/
(Norwest Bank Minnesota LOC)/(Subject to AMT) A-1+ 1,325,000
-------------------------------------------------------
1,500,000 Coleraine, MN, IDS #316, 4.30% RANs GO Aid Anticipation
Certificates of Indebtedness (Series 1994)/ (State of
Minnesota Guaranty), 9/28/95 NR(2) 1,500,000
-------------------------------------------------------
2,000,000 Coon Rapids, MN, Hospital Authority Weekly VRDNs
(Series 1985)/(The Health Central System)/(First Bank
N.A. Minneapolis LOC) A-1 2,000,000
-------------------------------------------------------
1,065,000 Crosby-Ironton, MN, ISD #182, 4.75% GO TANs (Series
1995A)/(State of Minnesota Guaranty), 3/22/96 NR(2) 1,065,446
-------------------------------------------------------
5,200,000 Crystal, MN, IDA Weekly VRDNs (Crystal Gallery
Mall)/(Citibank N.A. LOC) P-1 5,200,000
-------------------------------------------------------
1,935,000 Dakota County, MN, Housing & Redevelopment Authority,
5.10% TOBs (Custodial Receipts)/(GNMA Collateralized)/
(Meridian Bank BPA), Optional Tender 3/1/96 NR(1) 1,935,000
-------------------------------------------------------
3,000,000 Dakota County, Washington County & Anoka City, MN,
Housing & Redevelopment Authority, 4.50% TOBs
(Custodial Receipts)/(Series 1988)/(Escrowed in
Treasuries)/(Meridian Bank BPA)/(Subject to AMT),
Optional Tender 5/1/95 NR(1) 3,000,000
-------------------------------------------------------
3,000,000 Dakota County, Washington County & Anoka City, MN,
Housing & Redevelopment Authority, 4.625% TOBs
(Custodial Receipts)/(Series 1988)/(Escrowed in
Treasuries)/(Meridian Bank BPA)/(Subject to AMT),
Optional Tender 6/1/95 NR(1) 3,000,000
-------------------------------------------------------
4,785,000 Duluth, MN, 5.00% GO TANs (Series 1995), 12/29/95 NR(3) 4,788,645
-------------------------------------------------------
3,000,000 Eagan, MN, Multi-Family Housing Weekly VRDNs (Series
1992A)/(Cinnamon Ridge)/(Mellon Bank N.A. LOC) VMIG1 3,000,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$ 184,368 Eden Prairie, MN, IDA Weekly VRDNs (Series 1987)/
(Minnesota Supply Company)/(Norwest Bank Minnesota LOC) P-1 $ 184,368
-------------------------------------------------------
870,000 Eden Prairie, MN, IDR #S-93 Weekly VRDNs (Richard W.
Cohen)/(Norwest Bank Minnesota LOC) P-1 870,000
-------------------------------------------------------
1,300,000 Elk River, MN, Weekly VRDNs (Tescom Corp. Project)/
(Norwest Bank Minnesota LOC)/(Subject to AMT) P-1 1,300,000
-------------------------------------------------------
5,000,000 Fairbault, MN, IDA Weekly VRDNs (Series 1988)/(Jerome
Foods, Inc.)/(Norwest Bank Minnesota LOC) P-1 5,000,000
-------------------------------------------------------
2,000,000 Hoyt Lakes, MN, PCR Refunding Bonds, 5.15% CP (Series
1986)/(Minnesota Power and Light Company Guaranty),
Mandatory Tender 5/4/95 P-2 2,000,000
-------------------------------------------------------
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
-------------------------------------------------------
4,000,000 Maple Grove, MN, IDA Weekly VRDNs (Series 1991A)/
(Eagle Ridge Apartments)/(Sumitomo Bank Ltd. LOC) A-1 4,000,000
-------------------------------------------------------
3,000,000 Maple Grove, MN, Weekly VRDNs (Series 1991B)/(Eagle
Ridge Apartments)/(First Bank N.A. Minneapolis 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
-------------------------------------------------------
2,640,000 Mendota Heights, MN, Multi-Family Revenue Bonds Weekly
VRDNs (Lexington Heights Apartments)/ (Sumitomo Bank
Ltd. LOC) A-1 2,640,000
-------------------------------------------------------
1,000,000 Metropolitan Council, MN, 5.50% Bond (Series B)/
(Minneapolis-St. Paul Metropolitan Area), 12/1/95 NR(1) 1,005,933
-------------------------------------------------------
1,276,000 Minneapolis & St. Paul, MN, Housing Finance Board,
4.625% TOBs SFM Revenue Bonds (GNMA
Collateralized)/(Meridian Bank BPA)/(Subject to AMT),
Optional Tender 11/1/95 NR(1) 1,276,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$5,050,000 Minneapolis & St. Paul, MN, Housing Finance Board,
4.80% TOBs Revenue Bonds (Series 1988A)/(GNMA
Collateralized)/(Meridian Bank BPA)/(Subject to AMT),
Optional Tender 8/1/95 NR(1) $ 5,050,000
-------------------------------------------------------
3,870,000 Minneapolis, MN, 5.40% Annual TOBs Rental Housing
(Series 1994A)/(Driftwood Apartments)/(First Bank N.A.
Minneapolis LOC)/(Subject to AMT), Mandatory Tender
11/1/95 A-1 3,870,000
-------------------------------------------------------
3,000,000 Minneapolis, MN, GO Bonds Weekly VRDNs (Series
1995)/(Arena Acquisition Project) A-1+ 3,000,000
-------------------------------------------------------
3,100,000 Minneapolis, MN, Hospital Revenue Daily VRDNs
(Minneapolis Children's Medical Center)/(Morgan
Guaranty Trust Co. LOC) A-1+ 3,100,000
-------------------------------------------------------
730,000 Minneapolis, MN, IDA Weekly VRDNs (JTJ Company)/ (First
Bank N.A. Minneapolis LOC) P-1 730,000
-------------------------------------------------------
5,000,000 Minneapolis, MN, Special School District #1, 5.75% GO
TANs, 1/25/96 SP-1+ 5,022,773
-------------------------------------------------------
1,450,000 Minneapolis, MN, Weekly VRDNs (Series 1989)/
(MT. Sinai Medical Building Association)/(Norwest Bank
Minnesota LOC) A-1+ 1,450,000
-------------------------------------------------------
2,410,000 Minnesota State Aid Anticipation Pooled Borrowing
Program, 4.05% RANs GO Aid Anticipation Certificates
(Series 1994H)/(State of Minnesota Guaranty), 9/22/95 NR(2) 2,410,000
-------------------------------------------------------
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 SFM Bonds, 4.95% TOBs (Series V)/
(Bayerische Landesbank Girozentrale LOC)/(Subject to
AMT), Mandatory Tender 12/14/95 A-1+ 5,000,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$3,800,000 Minnesota State Higher Education Coordinating Board
Weekly VRDNs (Series 1992A)/(Supplemental Student Loan
Program)/(First Bank N.A. Minneapolis BPA)/ (Subject to
AMT) VMIG1 $ 3,800,000
-------------------------------------------------------
7,000,000 Minnesota State Higher Education Coordinating Board
Weekly VRDNs (Series 1992B)/(Student Loan Program)/
(First Bank N.A. Minneapolis BPA)/(Subject to AMT) VMIG1 7,000,000
-------------------------------------------------------
6,500,000 Minnesota State Higher Education Coordinating Board
Weekly VRDNs (Series 1992C)/(Student Loan Program)/
(First Bank N.A. Minneapolis BPA)/(Subject to AMT) VMIG1 6,500,000
-------------------------------------------------------
12,700,000 Minnesota State Higher Education Coordinating Board
Weekly VRDNs (Series 1993)/(Supplemental Student Loan
Program)/(First Bank N.,A. Minneapolis BPA)/(Subject to
AMT) VMIG1 12,700,000
-------------------------------------------------------
4,300,000 Minnesota State Higher Education Facility Authority
Weekly VRDNs (Carlton College)/(Swiss Bank Corp., New
York LOC) VMIG1 4,300,000
-------------------------------------------------------
740,000 (a) Minnesota State Weekly VRDNs P-Floats (Merrill Lynch
Capital Services Co. BPA) VMIG1 740,000
-------------------------------------------------------
1,000,000 Minnesota State, 6.60% Bonds, 8/1/95 NR(2) 1,005,631
-------------------------------------------------------
4,000,000 Minnesota State, 8.20% GO Bonds (Prerefunded), 8/1/95 NR(1) 4,039,728
-------------------------------------------------------
1,000,000 Minnesota State, 8.25% GO Bonds (Prerefunded), 8/1/95 NR(1) 1,009,937
-------------------------------------------------------
9,800,000 Minnetonka, MN, Multi-Family Housing Revenue Bonds
Weekly VRDNs (Cliffs at Ridgedale)/(Citibank N.A. LOC) A-1 9,800,000
-------------------------------------------------------
5,900,000 Minnetonka, MN, Multi-Family Housing Revenue Bonds
Weekly VRDNs (Series 1995)/(Southampton
Apartments)/(National Bank of Canada LOC) P-1 5,900,000
-------------------------------------------------------
1,300,000 New Brighton, MN, IDR Weekly VRDNs (Unicare Homes,
Inc.)/(Banque Paribas LOC) A-1 1,300,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$1,000,000 New Hope, MN, IDRB Weekly VRDNs (Series 1994)/ (Gaines
& Hanson Printing Company, Inc.)/(Norwest Bank
Minnesota LOC)/(Subject to AMT) A-1+ $ 1,000,000
-------------------------------------------------------
4,000,000 New Hope, MN, Weekly VRDNs (Paddock Labs)/ (Norwest
Bank Minnesota LOC)/(Subject to AMT) P-1 4,000,000
-------------------------------------------------------
3,300,000 Perham, MN, IDA Weekly VRDNs (Land O' Lakes, Inc.)/
(Rabobank Nederland LOC)/(Subject to AMT) A-1+ 3,300,000
-------------------------------------------------------
5,000,000 Plymouth, MN, IDR Weekly VRDNs (Series 1994)/ (Olympic
Steel)/(National City Bank, Cleveland, LOC)/ (Subject
to AMT) P-1 5,000,000
-------------------------------------------------------
1,420,000 Plymouth, MN, Weekly VRDNs (Nuaire, Inc.)/(Norwest Bank
Minnesota LOC)/(Subject to AMT) P-1 1,420,000
-------------------------------------------------------
1,690,000 Port of Austin, MN, Weekly VRDNs (Mower House Color
Co.)/(Norwest Bank Minnesota LOC)/(Subject to AMT) P-1 1,690,000
-------------------------------------------------------
8,000,000 Rochester, MN, Health Care Facility Authority Weekly
VRDNs (Mayo Clinic Foundation Guaranty) VMIG1 8,000,000
-------------------------------------------------------
1,000,000 Rochester, MN, Health Care Facility Authority, 4.10% CP
(Series C)/(Mayo Clinic Foundation Guaranty), Mandatory
Tender 7/19/95 A-1+ 1,000,000
-------------------------------------------------------
2,000,000 Rochester, MN, Health Care Facility Authority, 4.15% CP
(Series C)/(Mayo Clinic Foundation Guaranty), Mandatory
Tender 5/8/95 A-1+ 2,000,000
-------------------------------------------------------
5,200,000 Rochester, MN, Health Care Facility Authority, 4.20% CP
(Series C)/(Mayo Clinic Foundation Guaranty), Mandatory
Tender 5/12/95 A-1+ 5,200,000
-------------------------------------------------------
5,920,000 Rochester, MN, ISD #535, 4.125% GO RANs, 9/7/95 NR(1) 5,921,506
-------------------------------------------------------
2,975,000 Rogers, MN, IDA Weekly VRDNs (DAC Development,
LLC)/(Norwest Bank Minnesota LOC)/(Subject to AMT) A-1+ 2,975,000
-------------------------------------------------------
1,250,000 Rogers, MN, IDA Weekly VRDNs (Metal Sales Manufacturing
Corp.)/(Union Bank of Switzerland LOC)/ (Subject to
AMT) P-1 1,250,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$7,100,000 Rosemount, MN, PCR Weekly VRDNs (Series 1984)/ (Koch
Refining Company Guaranty) A-1+ $ 7,100,000
-------------------------------------------------------
7,000,000 Saint Cloud, MN, Hospital Facility Authority Weekly
VRDNs (Series 1990A)/(St. Cloud Hospital)/(Kredietbank
N.V. LOC) A-1+ 7,000,000
-------------------------------------------------------
1,825,000 Saint Cloud, MN, Housing and Redevelopment Authority
Revenue Refunding Weekly VRDNs (Series 1994A)/
(Coborn's, Inc.)/(Norwest Bank Minnesota LOC) A-1+ 1,825,000
-------------------------------------------------------
3,110,000 Saint Cloud, MN, Housing and Redevelopment Authority
Revenue Refunding Weekly VRDNs (Series 1994B)/
(Coborn's, Inc.)/(Norwest Bank Minnesota LOC)/(Subject
to AMT) A-1+ 3,110,000
-------------------------------------------------------
250,000 Saint Louis Park, MN, GO Weekly VRDNs (Series 1987C) VMIG1 250,000
-------------------------------------------------------
4,600,000 Saint Paul Port Authority, MN, Tax Increment Weekly
VRDNs (Series 1991)/(First Bank N.A. Minneapolis LOC) A-1 4,600,000
-------------------------------------------------------
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
-------------------------------------------------------
2,850,000 Saint Paul, MN, Housing & Redevelopment Authority
Weekly VRDNs (Series 1994)/(Minnesota Children's
Museum)/(First Bank N.A. Minneapolis LOC) A-1 2,850,000
-------------------------------------------------------
500,000 Saint Paul, MN, Housing & Redevelopment Authority
Weekly VRDNs (United Way)/(First Bank N.A. Minneapolis
LOC) A-1 500,000
-------------------------------------------------------
4,000,000 Saint Paul, MN, ISD #625, 5.375% TANs (Series A),
3/28/96 MIG1 4,027,716
-------------------------------------------------------
2,800,000 Shakopee, MN, Hospital Finance Authority Weekly VRDNs
(St. Francis Regional Medical Center)/(Citibank N.A.
LOC) A-1 2,800,000
-------------------------------------------------------
3,000,000 Southern Minnesota Municipal Power Agency, 4.20% CP,
Mandatory Tender 5/17/95 A-1 3,000,000
-------------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$2,000,000 Southern Minnesota Municipal Power Agency, 9.50% Bond
(Prerefunded), 1/1/96 NR(1) $ 2,102,377
-------------------------------------------------------
1,000,000 Steele County, MN, IDRB Weekly VRDNs (Series 1994)/
(Blount, Inc.)/(NationsBank of Georgia, N.A. LOC)/
(Subject to AMT) A-1 1,000,000
-------------------------------------------------------
5,000,000 University of Minnesota, 4.30% CP (Series H)/(Regents
of University of Minnesota), Mandatory Tender 7/19/95 A-1+ 5,000,000
-------------------------------------------------------
6,500,000 University of Minnesota, 4.50% TOBs (Series F),
Optional Tender 8/1/95 VMIG1 6,500,000
-------------------------------------------------------
6,015,000 Washington County, MN, Housing & Redevelopment
Authority Weekly VRDNs (Series 90)/(Granada Pond
Apartments)/(Sumitomo Bank Ltd. LOC) A-1 6,015,000
-------------------------------------------------------
1,490,000 Wells, MN, IDA, 5.00% TOBs (Stokely USA, Inc.)/
(National Bank of Detroit, N.A. LOC)/(Subject to AMT),
Optional Tender 6/1/95 P-1 1,490,000
-------------------------------------------------------
3,000,000 White Bear Lake, MN, Weekly VRDNs (Series 1993)/
(Taylor Corp.)/(Norwest Bank Minnesota LOC)/(Subject to
AMT) A-1+ 3,000,000
-------------------------------------------------------
5,180,000 White Bear, MN, Weekly VRDNs (Thermoform Plastics,
Inc.)/(Norwest Bank Minnesota LOC)/(Subject to AMT) A-1+ 5,180,000
-------------------------------------------------------
2,500,000 Willmar, MN, ISD #347, 4.12% RANs GO Aid Anticipation
Certificates of Indebtedness (Series 1994B)/(State of
Minnesota Guaranty), 9/28/95 NR(2) 2,500,196
-------------------------------------------------------
2,000,000 Winsted, MN, IDA Weekly VRDNs (Sterner Lighting
Systems)/(Fleet National Bank LOC)/(Subject to AMT) A-1 2,000,000
------------------------------------------------------- ------------
Total 326,179,265
------------------------------------------------------- ------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
PUERTO RICO--0.8%
-------------------------------------------------------
$2,500,000 Puerto Rico Government Development Bank, Weekly VRDNs
(Credit Suisse and Sumitomo Bank Ltd. LOCs) A-1 $ 2,500,000
------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $328,679,265
------------------------------------------------------- ------------
</TABLE>
(a) Denotes restricted securities which are subject to resale under Federal
Securities laws. This security has been determined to be liquid under
criteria established by the Board of Trustees.
(b) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 13.
Note: The categories of investments are shown as a percentage of net assets
($326,028,984) at April 30, 1995.
The following abbreviations are used throughout this portfolio:
<TABLE>
<S> <C>
AMT -- Alternative Minimum Tax
BPA -- Bond Purchase Agreement
CP -- Commercial Paper
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bonds
ISD -- Independent School District
LOCs -- Letter(s) of Credit
LOC -- Letter of Credit
NRUCFC -- National Rural Utilities Cooperative Finance Corporation
PCR -- Pollution Control Revenue
RANs -- Revenue Anticipation Notes
SFM -- Single Family Mortgage
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1Very 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 INVESTORS SERVICE, INC.
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.
MIG1This 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.
MIG2This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the
- --------------------------------------------------------------------------------
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.
A-2Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
AAABonds 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
edged." Interest payments are protected by a large or by exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes is can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
AA Bonds 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 which suggest a susceptibility to impairment sometime in the
future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $328,679,265
- --------------------------------------------------------------------------------
Cash 121,957
- --------------------------------------------------------------------------------
Income receivable 2,484,995
- --------------------------------------------------------------------------------
Deferred expenses 2,452
- -------------------------------------------------------------------------------- ------------
Total assets 331,288,669
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $4,298,500
- -------------------------------------------------------------------
Payable for shares redeemed 130,399
- -------------------------------------------------------------------
Income distribution payable 684,198
- -------------------------------------------------------------------
Accrued expenses 146,588
- ------------------------------------------------------------------- ----------
Total liabilities 5,259,685
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 326,028,984 shares outstanding $326,028,984
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
Institutional Shares ($212,433,809 / 212,433,809 shares
outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
Cash Series Shares ($113,595,175 / 113,595,175 shares 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, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest $6,446,516
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 637,144
- ----------------------------------------------------------------------
Administrative personnel and services fee 120,580
- ----------------------------------------------------------------------
Custodian fees 25,535
- ----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 47,253
- ----------------------------------------------------------------------
Directors'/Trustees' fees 2,219
- ----------------------------------------------------------------------
Auditing fees 7,490
- ----------------------------------------------------------------------
Legal fees 6,262
- ----------------------------------------------------------------------
Portfolio accounting fees 44,008
- ----------------------------------------------------------------------
Distribution services fee--Cash Series Shares 280,882
- ----------------------------------------------------------------------
Shareholder services fee--Cash Series Shares 140,441
- ----------------------------------------------------------------------
Share registration costs 75,629
- ----------------------------------------------------------------------
Printing and postage 14,554
- ----------------------------------------------------------------------
Insurance premiums 5,353
- ----------------------------------------------------------------------
Miscellaneous 1,788
- ---------------------------------------------------------------------- ----------
Total expenses 1,409,138
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $504,604
- -----------------------------------------------------------
Waiver of distribution services fee--Cash Series Shares 188,748
- -----------------------------------------------------------
Waiver of shareholder services fee--Cash Series Shares 7,869 $ 701,221
- ----------------------------------------------------------- -------- ----------
Net expenses 707,917
- ------------------------------------------------------------------------------------ ----------
Net investment income $5,738,599
- ------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 5,738,599 $ 6,226,990
- ------------------------------------------------------ ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income:
- ------------------------------------------------------
Institutional Shares (3,865,130) (4,475,720)
- ------------------------------------------------------
Cash Series Shares (1,873,469) (1,751,270)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from distributions
to shareholders (5,738,599) (6,226,990)
- ------------------------------------------------------ ---------------- ----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 532,755,942 931,933,710
- ------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of distributions declared 2,075,618 1,945,475
- ------------------------------------------------------
Cost of shares redeemed (462,841,255) (913,227,051)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from Share
transactions 71,990,305 20,652,134
- ------------------------------------------------------ ---------------- ----------------
Change in net assets 71,990,305 20,652,134
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 254,038,679 233,386,545
- ------------------------------------------------------ ---------------- ----------------
End of period $ 326,028,984 $ 254,038,679
- ------------------------------------------------------ ---------------- ----------------
</TABLE>
(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>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1995 ---------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990(A)
----------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------
Net investment income 0.02 0.03 0.02 0.03 0.05 0.01
- -------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.03) (0.05) (0.01)
- ------------------------------------------- -------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------- -------- ----- ----- ----- ----- -----
TOTAL RETURN (B) 1.86% 2.58% 2.43% 3.19% 4.89% 0.90%
- -------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------
Expenses 0.30%(c) 0.31% 0.31% 0.31% 0.30% 0.01%(c)
- -------------------------------------------
Net investment income 3.75%(c) 2.55% 2.40% 3.10% 4.73% 6.45%(c)
- -------------------------------------------
Expense waiver/reimbursement (d) 0.32%(c) 0.34% 0.34% 0.33% 0.43% 0.69%(c)
- -------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------
Net assets, end of period (000 omitted) $212,434 $159,704 $165,865 $245,168 $124,603 $75,904
- -------------------------------------------
</TABLE>
(a) Reflects operations for the period from September 10, 1990 (date of initial
public investment) to October 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1995 -----------------------------------
(UNAUDITED) 1994 1993 1992 1991(A)
----------- ----- ----- ----- -----
<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 0.02 0.02 0.02 0.03 0.04
- ---------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Distributions from net investment income (0.02) (0.02) (0.02) (0.03) (0.04)
- --------------------------------------------------- -------- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------- -------- ----- ----- ----- -----
TOTAL RETURN (B) 1.66% 2.17% 2.02% 2.78% 3.60%
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses 0.70%(c) 0.71% 0.71% 0.71% 0.64%(c)
- ---------------------------------------------------
Net investment income 3.33%(c) 2.15% 2.01% 2.75% 4.11%(c)
- ---------------------------------------------------
Expense waiver/reimbursement (d) 0.66%(c) 0.61% 0.44% 0.44% 0.59%(c)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted) $113,595 $94,335 $67,521 $75,044 $69,747
- ---------------------------------------------------
</TABLE>
(a) Reflects operations for the period from January 7, 1991 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end management investment
company. The Trust consists of thirteen non-diversified portfolios. The
financial statements included herein present 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 offers two classes of shares, Institutional Shares and Cash Series Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value its
portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are
accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions to
shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the Code
applicable to regulated investment companies and to distribute to shareholders
each year substantially all of its income. Accordingly, no provisions for
federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin earning interest on the settlement date.
CONCENTRATION OF CREDIT RISK--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
tax-exempt mutual fund that invests nationally. In order to reduce the credit
risk associated with such factors, at April 30, 1995, 87.4% 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
value of investments insured by or supported (backed) by a letter of credit for
any one institution or agency does not exceed 14.5% of total investments.
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions exempt
from such registration. Many restricted securities may be resold in the
secondary market in transactions exempt from registration. In some cases, the
restricted securities may be resold without registration upon exercise of a
demand feature. Such restricted securities may be determined to be liquid under
criteria established by the Board of Trustees (the "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 Act. Additional
information on each restricted security held at April 30, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------- ------------- ------------
<S> <C> <C>
Minnesota State Weekly VRDNs P-Floats (Merrill Lynch
Co.) 10/4/93 $ 740,000
</TABLE>
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 not to exceed a period of five years from the Fund's
commencement date.
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, 1995, capital paid-in aggregated $326,028,984.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
INSTITUTIONAL SHARES APRIL 30, 1995 OCTOBER 31, 1994
- ----------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold 289,721,877 554,305,186
- -----------------------------------------------------
Shares issued to shareholders in payment of dividends
declared 237,106 266,557
- -----------------------------------------------------
Shares redeemed (237,229,120) (560,732,943)
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Institutional Shares
transactions 52,729,863 (6,161,200)
- ----------------------------------------------------- --------------- ---------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
CASH SERIES SHARES APRIL 30, 1995 OCTOBER 31, 1994
- ----------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold 243,034,065 377,628,524
- -----------------------------------------------------
Shares issued to shareholders in payment of dividends
declared 1,838,512 1,678,918
- -----------------------------------------------------
Shares redeemed (225,612,135) (352,494,108)
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Cash Series Shares
transactions 19,260,442 26,813,334
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Fund Share
transactions 71,990,305 20,652,134
- ----------------------------------------------------- --------------- ---------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") under the
Administrative Services Agreement provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund's Cash Series class of shares. The Plan provides that the Fund
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 daily net assets of Cash Series for the period. This fee is to
obtain certain services for shareholders and to maintain the shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company, ("FServ"), serves as transfer and dividend disbursing agent
for the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
ORGANIZATIONAL EXPENSES--Organizational expenses of $40,733 were borne initially
by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following August 31, 1994
(the date Fund became effective). For the period ended April 30, 1995, the Fund
paid $0 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions at current market value with funds
that have a common investment adviser (or affiliated investment advisers),
common Directors/Trustees, and/or common Officers. These transactions were made
at current market value pursuant to Rule 17a-7 under the Act amounting to
$206,590,000 and $178,250,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson Vice President
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Vice President and Treasurer
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not
insured or guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the
Federal Reserve Board, or any other government agency. Investment in mutual
funds involves
investment risk, including possible loss of principal. Although money market
funds seek to maintain
a stable net asset value of $1.00 per share, there is no assurance that they
will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or
accompanied by the 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, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229600
314229709
2052902 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of New Jersey
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995. The fund consists of two classes of
shares known as Institutional Shares and Institutional Service Shares.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Shares and Institutional
Service Shares.
New Jersey Municipal Cash Trust continues to seek relief for you and other
tax-sensitive New Jersey residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of New
Jersey municipal securities, issued to fund projects as varied as education,
health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $1.7
million in total distributions to shareholders. As of this report, the fund's
total net assets are $98.5 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak
Q
Jeff, can you comment on the changes in money market rates during the
reporting period?
A
In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q
How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A
Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the period. The seven-day net yield* of the fund's Institutional
Shares rose from 2.87% on November 1, 1994, to 3.89% on April 30, 1995. For the
Institutional Service Shares, the seven-day net yield* rose from 2.77% at the
beginning of the period to 3.79% at April 30, 1995.
* Past performance does not guarantee future results. Yield will vary.
- --------------------------------------------------------------------------------
Q
Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A
For the first three months of the reporting period, we slowly added to our
positions of short maturity commercial paper (CP) and VRDNs in order to
maintain the responsiveness of the portfolio to changes in short-term
interest rates. VRDNs adjust quickly to changes in Fed policy as well as supply
and demand imbalances that are unique to the municipal money markets. The
purchase of CP typically allows us to pick up an additional yield premium over
VRDNs over time, while still retaining portfolio responsiveness to further rate
increases. As market expectations regarding the potential for further Fed
tightenings changed in February and March, 1995, we began shifting more of the
portfolio into more attractive longer-term fixed-rate notes so as to lock-in the
available after-tax yield advantage. At the end of the reporting period, the
average maturity of the fund was at 57 days.
Q
What is your overall outlook for rates in the near future?
A
Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may be attractive versus comparable maturity taxable
securities.
NEW JERSEY MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.1%
- --------------------------------------------------------------------------
$ 700,000 Atlantic County, NJ, Improvement Authority Weekly VRDNs
(Marine Midland Bank N.A. LOC) VMIG1 $ 700,000
-------------------------------------------------------
1,801,896 Atlantic Highlands, NJ, 5.125% BANs, 11/17/1995 NR 1,805,895
-------------------------------------------------------
1,300,000 Berlin Township, NJ, 5.25% BANs, 6/1/1995 NR(4) 1,300,592
-------------------------------------------------------
1,750,000 Bordentown, NJ, Regional School District Board of
Education, 4.35% RANs, 6/30/1995 NR(3) 1,750,828
-------------------------------------------------------
1,000,000 Florence Township, NJ, 5.25% BANs, 2/15/1996 NR 1,002,831
-------------------------------------------------------
4,500,000 Galloway Township, NJ, 5.25% BANs, 3/14/1996 NR 4,513,958
-------------------------------------------------------
3,148,239 Haddonfield, NJ, 4.12% BANs, 6/9/1995 NR 3,148,951
-------------------------------------------------------
463,307 Haddonfield, NJ, 4.16% BANs, 6/9/1995 NR 463,431
-------------------------------------------------------
2,000,000 Hudson County, NJ, 4.55% BANs, 10/11/1995 NR(4) 2,001,281
-------------------------------------------------------
2,500,000 Mercer County, NJ, 5.50% BANs, 9/20/1995 NR(3) 2,505,612
-------------------------------------------------------
1,000,000 Mercer County, NJ, Improvement Authority Weekly VRDNs
(Pooled Governmental Loan)/(Credit Suisse LOC) A-1+ 1,000,000
-------------------------------------------------------
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
-------------------------------------------------------
2,815,000 New Jersey EDA Weekly VRDNs (Atlantic States Cast Iron
Pipe Company)/(Amsouth Bank N.A. LOC) VMIG1 2,815,000
-------------------------------------------------------
5,000,000 New Jersey EDA Weekly VRDNs (Centu-For-Aging--
Applewood Estates)/(Banque Paribas LOC) A-1 5,000,000
-------------------------------------------------------
2,400,000 New Jersey EDA Weekly VRDNs (Church & Dwight,
Inc.)/(Bank of Nova Scotia LOC) P-1 2,400,000
-------------------------------------------------------
2,500,000 New Jersey EDA Weekly VRDNs (Franciscan Oaks)/
(Bank of Scotland LOC) A-1+ 2,500,000
-------------------------------------------------------
5,628,000 New Jersey EDA Weekly VRDNs (Meridian
Healthcare)/(First National Bank of Maryland LOC)/
(Subject to AMT) P-1 5,628,000
-------------------------------------------------------
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 4,323,000 New Jersey EDA Weekly VRDNs (Mulins Machines)/
(Sovran Bank N.A. LOC) P-1 $ 4,323,000
-------------------------------------------------------
1,445,000 New Jersey EDA Weekly VRDNs (Nash Group)/
(Chemical Bank LOC)/(Subject to AMT) A-1 1,445,000
-------------------------------------------------------
4,200,000 New Jersey EDA Weekly VRDNs (Series 1986)/
(Ridgefield Associates)/(Bank of Tokyo Ltd. LOC)/
(Subject to AMT) P-1 4,200,000
-------------------------------------------------------
350,000 New Jersey EDA Weekly VRDNs (Series 1987G)/
(W.Y. Urban Renewal)/(National Westminster
Bank PLC LOC)/(Subject to AMT) VMIG1 350,000
-------------------------------------------------------
2,400,000 New Jersey EDA Weekly VRDNs (Series 1988F)/
(Lamington Corners Assoc.)/ (First Fidelity Bank
LOC)/(Subject to AMT) VMIG1 2,400,000
-------------------------------------------------------
1,310,000 New Jersey EDA Weekly VRDNs (Series 1992Q)/
(Physical Acoustics, Inc.)/(Banque Nationale de Paris
LOC)/(Subject to AMT) VMIG1 1,310,000
-------------------------------------------------------
1,300,000 New Jersey EDA Weekly VRDNs (Series 1992Z)/
(West-Ward Pharmaceuticals)/(Banque Nationale de Paris
LOC)/(Subject to AMT) VMIG1 1,300,000
-------------------------------------------------------
1,115,000 New Jersey EDA Weekly VRDNs (Series 1992D-1)/
(Danlin Corp.)/(Banque Nationale de Paris LOC)/
(Subject to AMT) VMIG1 1,115,000
-------------------------------------------------------
2,465,000 New Jersey EDA Weekly VRDNs (Series 1992I-1)/
(Geshem Realty)/(Banque Nationale de Paris LOC)/
(Subject to AMT) VMIG1 2,465,000
-------------------------------------------------------
3,185,000 New Jersey EDA Weekly VRDNs (Series 1992L)/(Kent Place
School)/(Banque Nationale de Paris LOC) VMIG1 3,185,000
-------------------------------------------------------
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
-------------------------------------------------------
1,500,000 New Jersey EDA Weekly VRDNs (United Jewish Community
Center of Bergen County)/(Bank of New
York LOC) P-1 1,500,000
-------------------------------------------------------
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 4,350,000 New Jersey EDA Weekly VRDNs (YA-YWHA of Bergen
County)/(Bank of New York LOC) VMIG1 $ 4,350,000
-------------------------------------------------------
1,500,000 New Jersey EDA, 4.15% CP (Series 1991)/(Chambers
Cogeneration LP)/(Swiss Bank Corp. LOC)/(Subject to
AMT), Mandatory Tender 6/20/1995 A-1+ 1,500,000
-------------------------------------------------------
2,865,000 New Jersey State HFA, 4.00% Semi-Annual TOBs Custody
Receipts (Series 1992A), Optional Tender 5/1/1995 NR(2) 2,865,000
-------------------------------------------------------
780,000 New Jersey State Housing & Mortgage Finance Agency,
4.35% TOBs (MBIA Insured), Optional Tender 10/1/1995 NR(2) 780,000
-------------------------------------------------------
3,055,000 New Jersey State Housing & Mortgage Finance Agency,
4.45% TOBs (Series 1989D)/(MBIA Insured)/(Subject to
AMT), Optional Tender 10/1/1995 NR(2) 3,055,000
-------------------------------------------------------
3,000,000 New Jersey State, 4.20% TRANs CP (Series Fiscal 1995D),
Mandatory Tender 5/15/1995 A-1+ 3,000,000
-------------------------------------------------------
1,275,000 Oradell Borough, NJ, 4.24% BANs (Series 1994B),
8/17/1995 NR 1,275,322
-------------------------------------------------------
1,000,000 Port Authority of New York and New Jersey Weekly VRDNs
(Series 3)/(KIAC Partners)/(Deutsche Bank AG
LOC)/(Subject to AMT) A-1+ 1,000,000
-------------------------------------------------------
10,000,000 Port Authority of New York and New Jersey Weekly VRDNs
(Series 1991-4)/(Subject to AMT) P-1 10,000,000
-------------------------------------------------------
1,000,000 Salem County, NJ, PCA, 4.00% CP (Series
1988A)/(Philadelphia Electric Co.)/(FGIC Insured),
Mandatory Tender 5/12/1995 A-1+ 1,000,000
-------------------------------------------------------
3,200,421 West Milford Township, NJ, 5.50% BANs, 1/26/1996 NR 3,204,895
-------------------------------------------------------
750,000 Woodbury, NJ, 5.20% BANs, 4/12/1996 NR 752,710
------------------------------------------------------- -----------
TOTAL INVESTMENTS, AT AMORTIZED COST (A) $97,662,306
------------------------------------------------------- -----------
</TABLE>
(a) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 8.
Note: The categories of investments are shown as a percentage of net assets
($98,513,706) at April 30, 1995.
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following abbreviations are used throughout this portfolio:
<TABLE>
<S> <C> <C>
AMT -- Alternative Minimum Tax
BANs -- Bond Anticipation Notes
CP -- Commercial Paper
EDA -- Economic Development Authority
FGIC -- Financial Guaranty Insurance Company
HFA -- Housing Finance Authority
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCA -- Pollution Control Authority
RANs -- Revenue Anticipation Notes
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
- --------------------------------------------------------------------------------
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG rating can be
assigned a 1 or 2 designation using the same definitions described above for the
MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics, cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
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 edged." Interest payments are protected by a large or by an exception
ally stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized 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 which suggest a susceptibility to impairment sometime in the future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
NEW JERSEY MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $97,662,306
- --------------------------------------------------------------------------------
Cash 310,088
- --------------------------------------------------------------------------------
Income receivable 844,992
- --------------------------------------------------------------------------------
Deferred expenses 8,729
- -------------------------------------------------------------------------------- -----------
Total assets 98,826,115
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for shares redeemed $ 531
- ---------------------------------------------------------------------
Income distribution payable 263,462
- ---------------------------------------------------------------------
Accrued expenses 48,416
- --------------------------------------------------------------------- --------
Total liabilities 312,409
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 98,513,706 shares outstanding $98,513,706
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
Institutional Shares ($79,318,062 / 79,318,062 shares outstanding) $1.00
- -------------------------------------------------------------------------------- -----------
Institutional Service Shares ($19,195,644 / 19,195,644 shares 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, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $1,972,929
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $200,561
- -----------------------------------------------------------------------
Administrative personnel and services fee 76,863
- -----------------------------------------------------------------------
Custodian fees 6,707
- -----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 34,757
- -----------------------------------------------------------------------
Directors'/Trustees' fees 1,145
- -----------------------------------------------------------------------
Auditing fees 8,204
- -----------------------------------------------------------------------
Legal fees 5,361
- -----------------------------------------------------------------------
Portfolio accounting fees 29,124
- -----------------------------------------------------------------------
Distribution services fee--Institutional Service Shares 13,720
- -----------------------------------------------------------------------
Shareholder services fee--Institutional Shares 89,504
- -----------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 34,300
- -----------------------------------------------------------------------
Share registration costs 16,408
- -----------------------------------------------------------------------
Printing and postage 9,522
- -----------------------------------------------------------------------
Insurance premiums 935
- -----------------------------------------------------------------------
Taxes 1,263
- -----------------------------------------------------------------------
Miscellaneous 3,022
- ----------------------------------------------------------------------- --------
Total expenses 531,396
- -----------------------------------------------------------------------
Deduct--
- -----------------------------------------------------------------------
Waiver of investment advisory fee $145,581
- ------------------------------------------------------------
Waiver of distribution services fee--Institutional Service
Shares 13,720
- ------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares 69,748
- ------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service
Shares 12,856 241,905
- ------------------------------------------------------------ -------- --------
Net expenses 289,491
- ----------------------------------------------------------------------------------- ----------
Net investment income $1,683,438
- ----------------------------------------------------------------------------------- ----------
</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>
SIX MONTHS ENDED
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 1,683,438 $ 2,157,116
- ------------------------------------------------------ ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income:
- ------------------------------------------------------
Institutional Shares (1,237,932) (1,478,776)
- ------------------------------------------------------
Institutional Service Shares (445,506) (678,340)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from distributions
to shareholders (1,683,438) (2,157,116)
- ------------------------------------------------------ ---------------- ----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of Shares 208,968,240 344,046,340
- ------------------------------------------------------
Net asset value of Shares issued to shareholders in
payment of distributions declared 255,982 426,614
- ------------------------------------------------------
Cost of Shares redeemed (210,398,658) (332,135,904)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from Share
transactions (1,174,436) 12,337,050
- ------------------------------------------------------ ---------------- ----------------
Change in net assets (1,174,436) 12,337,050
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 99,688,142 87,351,092
- ------------------------------------------------------ ---------------- ----------------
End of period $ 98,513,706 $ 99,688,142
- ------------------------------------------------------ ---------------- ----------------
</TABLE>
(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>
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------
(UNAUDITED) 1994 1993 1992 1991(A)
---------------- ----- ----- ----- -------
<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 0.02 0.02 0.02 0.03 0.04
- ----------------------------------- ---------- ----- ----- ----- ------
LESS DISTRIBUTIONS
- -----------------------------------
Dividends from net investment
income (0.02) (0.02) (0.02) (0.03) (0.04)
- ----------------------------------- ---------- ----- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------- ---------- ----- ----- ----- ------
TOTAL RETURN (B) 1.69% 2.26% 2.22% 2.96% 3.87%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.55%(c) 0.54% 0.46% 0.45% 0.27%(c)
- -----------------------------------
Net investment income 3.40%(c) 2.22% 2.19% 2.86% 4.19%(c)
- -----------------------------------
Expense waiver/reimbursement (d) 0.48%(c) 0.39% 0.45% 0.51% 0.67%(c)
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period
(000 omitted) $79,318 $62,984 $66,346 $57,657 $39,423
- -----------------------------------
</TABLE>
(a) Reflects operations for the period from December 13, 1990 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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>
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------
(UNAUDITED) 1994 1993 1992 1991(A)
---------------- ----- ----- ----- -------
<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 0.02 0.02 0.02 0.03 0.04
- ----------------------------------- ---------- ----- ----- ----- ------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.02) (0.02) (0.02) (0.03) (0.04)
- ----------------------------------- ---------- ----- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------- ---------- ----- ----- ----- ------
TOTAL RETURN (B) 1.64% 2.16% 2.12% 2.86% 3.82%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.65%(c) 0.65% 0.56% 0.55% 0.35%(c)
- -----------------------------------
Net investment income 3.25%(c) 2.19% 2.08% 2.69% 4.11%(c)
- -----------------------------------
Expense waiver/reimbursement (d) 0.49%(c) 0.41% 0.45% 0.51% 0.69%(c)
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period
(000 omitted) $19,196 $36,704 $21,005 $26,844 $17,709
- -----------------------------------
</TABLE>
(a) Reflects operations for the period from December 13, 1990 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present 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 offers two classes of shares: Institutional Shares and
Institutional Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
58.4% 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 value of investments insured by
or supported (backed) by a letter of credit for any one institution or
agency does not exceed 9.6% of total investments.
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value)
for each class of shares. At April 30, 1995, capital paid-in aggregated
$98,513,706. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994
---------------- ----------------
<S> <C> <C>
INSTITUTIONAL SHARES
- -----------------------------------------------------
Shares sold 164,804,764 240,111,228
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 7,643 2,995
- -----------------------------------------------------
Shares redeemed (148,478,009) (243,476,200)
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Institutional Shares
transactions 16,334,398 (3,361,977)
- ----------------------------------------------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994
---------------- ----------------
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
- -----------------------------------------------------
Shares sold 44,163,476 103,935,112
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 248,339 423,619
- -----------------------------------------------------
Shares redeemed (61,920,649) (88,659,704)
- ----------------------------------------------------- ---------- ------------
Net change resulting from Institutional Service
Shares transactions (17,508,834) 15,699,027
- ----------------------------------------------------- ---------- ------------
Net change resulting from share transactions (1,174,436) 12,337,050
- ----------------------------------------------------- ---------- ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Fund's average daily
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
net assets. The Adviser may voluntarily choose to waive a portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund'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. The
distributor may voluntarily choose to waive its fee. The distributor can modify
or terminate this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records.
This fee is based on the level of the Fund's average daily net assets for the
period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($61,531) were borne initially
by the 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 the organizational expenses until expenses initially borne by the
Adviser are fully reimbursed or the expiration of five years after December 10,
1990 (date the Fund became effective), whichever occurs earlier. For the six
months ended April 30, 1995, the Fund paid $2,537 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors'/Trustees', and/or common Officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$76,230,000 and $71,685,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson Vice President
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Vice President and Treasurer
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the 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, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229840
314229857
G00829-01 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Ohio Municipal
Cash Trust, a portfolio of Federated Municipal Trust, for the six-month period
ended April 30, 1995. The fund consists of two classes of shares known as
Institutional Shares and Cash II Shares.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Shares and Cash II
Shares.
Ohio Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Ohio residents, in the form of double tax-free* monthly income.
The fund is able to pursue this income by maintaining a portfolio of Ohio
municipal securities, issued to fund projects as varied as education, health
care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $3.7
million in total distributions to shareholders. As of this report, the fund's
total net assets are $213.8 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Jeff A. Kozemchak
Q
Jeff, can you comment on the changes in money market rates during the
reporting period?
A
In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q
How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A
Municipal money market rates were affected by the Fed tightenings early in
the period, as well as February's 180-degree change in market expectations
regarding the potential for future Fed rate increases. In addition,
municipal rates were also influenced by seasonal supply and demand imbalances
throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
- --------------------------------------------------------------------------------
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield* of the fund's
Institutional Shares rose from 2.97% on November 1, 1994, to 4.01% on April 30,
1995. For the Cash II Shares, the seven-day net yield* rose from 2.67% at the
beginning of the period to 3.71% at April 30, 1995.
Q
Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A
Early in the reporting period, we added to our positions VRDNs in order to
maintain the responsiveness of the portfolio to changes in short-term
interest rates. VRDNs adjust quickly to changes in Fed policy as well as
supply and demand imbalances that are unique to the municipal money markets.
However, throughout the period we took advantage of the steady supply of
attractively priced fixed-rate notes in Ohio, so as to lock-in the positive
yield advantage relative to VRDNs. As a result, the average maturity of the fund
ranged predominantly in the 50-60 day range, with an emphasis on the shorter end
of this range.
Q
What is your overall outlook for rates in the near future?
A
Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan to slightly extend the average maturity of
the fund during this period of heavy issuance, as yields on fixed-rate notes may
be attractive versus comparable maturity taxable securities.
* Past performance does not guarantee future results. Yield will vary.
OHIO MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.1%
- --------------------------------------------------------------------------
$ 200,000 Allen County, OH, IDR Weekly VRDNs (Nickles Bakery of
Ohio, Inc.)/(Society National Bank, Cleveland LOC)/
(Subject to AMT) P-1 $ 200,000
--------------------------------------------------------
2,300,000 Belmont County, OH, 4.55% County Jail Improvement BANs
(Third Series), 9/1/1995 NR 2,302,585
--------------------------------------------------------
5,875,000 Belmont County, OH, Weekly VRDNs (Lesco, Inc.)/ (PNC
Bank N.A. LOC)/(Subject to AMT) A-1 5,875,000
--------------------------------------------------------
3,000,000 Brecksville-Broadview Heights City School District, OH,
5.71% GO UT School Improvement BANs, 1/18/1996 NR(3) 3,002,240
--------------------------------------------------------
1,175,000 Butler County, OH, 5.07% Ltd. GO BANs, 3/15/1996 NR(3) 1,179,598
--------------------------------------------------------
2,000,000 Cincinnati City School District, OH, 5.80% TANs,
12/29/1995 NR(3) 2,005,047
--------------------------------------------------------
200,000 Cleveland, OH, IDA Weekly VRDNs (Garland Company)/
(Society National Bank, Cleveland LOC) P-1 200,000
--------------------------------------------------------
1,000,000 Cleveland-Cuyahoga County, OH, Port Authority Weekly
VRDNs (Series 1993)/(Rock and Roll Hall of Fame &
Museum)/(Credit Local de France LOC) A-1+ 1,000,000
--------------------------------------------------------
1,800,000 Clinton County, OH, Hospital Authority Weekly VRDNs
(Clinton Memorial Hospital)/(BancOhio National Bank LOC) P-1 1,800,000
--------------------------------------------------------
2,000,000 Columbiana County, OH, Adjustable Rate IDRB Weekly VRDNs
(C & S Land Company)/(Bank One, Youngstown N.A.
LOC)/(Subject to AMT) P-1 2,000,000
--------------------------------------------------------
1,185,000 Crawford County, OH, IDA, 4.65% TOBs (United
Photographic Industries)/(Bank One, Columbus N.A. LOC),
Optional Tender 9/1/1995 P-1 1,185,000
--------------------------------------------------------
800,000 Cuyahoga County, OH, IDA Weekly VRDNs (Animal Protection
League)/(Society National Bank, Cleveland LOC) P-1 800,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 715,000 Cuyahoga County, OH, IDA Weekly VRDNs (Parma-Commerce
Parkway-West)/(Society National Bank, Cleveland LOC) P-1 $ 715,000
--------------------------------------------------------
1,200,000 Cuyahoga County, OH, IDA Weekly VRDNs (Premier
Manufacturing)/(First National Bank, Louisville LOC)/
(Subject to AMT) P-1 1,200,000
--------------------------------------------------------
1,800,000 Cuyahoga County, OH, IDR Weekly VRDNs (East Park
Retirement Community, Inc.)/(Society National Bank,
Cleveland LOC)/(Subject to AMT) P-1 1,800,000
--------------------------------------------------------
655,000 Cuyahoga County, OH, IDR Weekly VRDNs (Interstate Diesel
Service, Inc.)/(Huntington National Bank LOC)/ (Subject
to AMT) P-1 655,000
--------------------------------------------------------
3,000,000 Dayton, OH, Weekly VRDNs (Series 1993E)/(Emery Air
Freight Corp.)/(Mellon Bank N.A. LOC) VMIG1 3,000,000
--------------------------------------------------------
2,000,000 Euclid City School District, OH, 4.83% RANs, 12/15/1995 NR(3) 2,002,156
--------------------------------------------------------
3,160,000 Franklin County, OH, IDA Weekly VRDNs (Unicorn Leasing
Co.)/(Fifth Third Bank LOC)/(Subject to AMT) P-1 3,160,000
--------------------------------------------------------
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
--------------------------------------------------------
3,000,000 Greene County, OH, 4.25% GO BANs (Series B), 7/19/1995 NR(3) 3,001,241
--------------------------------------------------------
3,000,000 Greene County, OH, 4.32% Variable Purpose Water & Sewer
BANs, 7/19/1995 NR(3) 3,001,379
--------------------------------------------------------
950,000 Hamilton County, OH, Health Care System Weekly
VRDNs (West Park Retirement Community, Inc.)/
(Fifth Third Bank LOC) VMIG1 950,000
--------------------------------------------------------
1,680,000 (a) Hamilton County, OH, Sewer System Improvement and
Revenue Bonds Weekly VRDNs P-FLOATS (FGIC
Insured)/(Merrill Lynch Capital Services Inc., LIQ.) VMIG1 1,680,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 2,375,000 Hamilton, OH, Municipal Golf Course Improvement Notes,
3.79% GO BANs (Series D), 5/12/1995 NR(3) $ 2,375,027
--------------------------------------------------------
520,000 Hillsboro, OH, IDR Weekly VRDNs (Series 1987)/
(TD Manufacturing Ltd.)/(Sanwa Bank Ltd. LOC)/
(Subject to AMT) VMIG1 520,000
--------------------------------------------------------
2,000,000 Holmes County, OH, IDA Weekly VRDNs (Poultry Processing,
Inc.)/(Rabobank Nederland LOC)/
(Subject to AMT) A-1+ 2,000,000
--------------------------------------------------------
1,250,000 Huber Heights, OH, IDRB Weekly VRDNs (Series 1994)/
(Lasermike, Inc.)/(Society National Bank, Cleveland
LOC)/ (Subject to AMT) P-1 1,250,000
--------------------------------------------------------
300,000 Kettering, OH, IDA Weekly VRDNs (Center-Plex Venture,
Inc.)/(Society National Bank, Cleveland LOC) P-1 300,000
--------------------------------------------------------
6,500,000 Kings Local School District, OH, 5.45% School
Improvement BANs Voted UT GOs, 6/21/1995 NR 6,504,881
--------------------------------------------------------
4,565,000 Lorain, OH, Port Authority Weekly VRDNs (Series 1994)/
(Spitzer Great Lakes Ltd., Inc.)/(Bank One, Cleveland
LOC)/(Subject to AMT) P-1 4,565,000
--------------------------------------------------------
3,500,000 Lucas County, OH, 5.75% BANs, 11/30/1995 NR(4) 3,514,583
--------------------------------------------------------
300,000 Lucas County, OH, Health Care Improvement Weekly VRDNs
(Sunshine Children's Home)/(National City Bank,
Cleveland LOC) P-1 300,000
--------------------------------------------------------
3,000,000 Lucas County, OH, HFA Weekly VRDNs (Riverside
Hospital)/(Huntington National Bank LOC) P-1 3,000,000
--------------------------------------------------------
2,030,000 Lucas County, OH, Hospital Facility Improvement
Revenue Bonds Weekly VRDNs (Series 93)/(Lott
Industries, Inc.)/(National City Bank LOC) P-1 2,030,000
--------------------------------------------------------
1,600,000 Lucas County, OH, IDA Weekly VRDNs (Kuhlman Corp.)/
(Society National Bank, Cleveland LOC) P-1 1,600,000
--------------------------------------------------------
40,000 Mahoning County, OH, IDR Weekly VRDNs (Tru-Cut Die
Corp.)/(PNC Bank, Ohio N.A. LOC)/(Subject to AMT) P-1 40,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 5,325,000 Mahoning County, OH, Multi-Family HFA Weekly VRDNs
(International Towers, Inc.)/(PNC Bank N.A. LOC)/
(Subject to AMT) A-1 $ 5,325,000
--------------------------------------------------------
1,255,000 Mansfield, OH, IDR Weekly VRDNs (Designed Metal
Products, Inc.)/(Bank One, Indianapolis LOC)/
(Subject to AMT) P-1 1,255,000
--------------------------------------------------------
1,750,000 Massillon, OH, 4.84% BANs, 10/5/1995 NR(3) 1,753,530
--------------------------------------------------------
1,250,000 Medina County, OH, 5.19% General LT County Facilities
Improvement BANs (Series 1995), 10/12/1995 NR(3) 1,251,578
--------------------------------------------------------
350,000 Medina, OH, IDA Weekly VRDNs (National Metal Abrasive,
Inc.)/(Society National Bank, Cleveland LOC) P-1 350,000
--------------------------------------------------------
490,000 Medina County, OH, IDR, 4.85% TOBs (Bopco)/(Bank
One, Akron N.A. LOC), Optional Tender 9/1/1995 P-1 490,000
--------------------------------------------------------
7,000,000 Montgomery County, OH, 5.00% GO BANs (Series 1995A),
4/26/1996 NR(2) 7,046,317
--------------------------------------------------------
2,010,000 Montgomery, OH, IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank LOC) A-1 2,010,000
--------------------------------------------------------
500,000 Muskingham County, OH, Hospital Facilities
Authority Weekly VRDNs (Bethesda Care System)/
(National City Bank, Columbus LOC) VMIG1 500,000
--------------------------------------------------------
3,350,000 North Olmsted, OH, 4.20% GO BANs (Series 1994C),
6/22/1995 NR(3) 3,351,375
--------------------------------------------------------
370,000 North Olmsted, OH, IDA Weekly VRDNs (Bryant & Stratton
Corp.)/(Society National Bank, Cleveland LOC)/ (Subject
to AMT) P-1 370,000
--------------------------------------------------------
775,000 North Olmsted, OH, IDA, 5.00% Semi-Annual TOBs
(Therm-All)/(National City Bank, Cleveland LOC)/
(Subject to AMT), Optional Tender 8/1/1995 P-1 775,000
--------------------------------------------------------
5,680,000 (a) Ohio HFA SFM Weekly VRDNs (Series PT-8)/
(GNMA Collateralized)/(Dai-Ichi Kangyo Bank LIQ.)
(Subject to AMT) A-1+ 5,680,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 2,135,000 Ohio HFA Weekly VRDNs (Westchester Village)/(Society
National Bank, Cleveland LOC) P-1 $ 2,135,000
--------------------------------------------------------
7,405,000 Ohio HFA, 3.95% TOBs (Comerica, Inc. LOC), Optional
Tender 5/1/1995 P-1 7,405,000
--------------------------------------------------------
2,000,000 Ohio State Air Quality Development Authority Weekly
VRDNs (Series 1998A)/(PPG Industries, Inc. Guaranty) P-1 2,000,000
--------------------------------------------------------
3,000,000 Ohio State Air Quality Development Authority, 4.15% CP
(Cincinnati Gas and Electric Company)/(Morgan Bank,
Delaware LOC), Mandatory Tender 5/15/1995 A-1+ 3,000,000
--------------------------------------------------------
1,520,000 Ohio State IDR Weekly VRDNs (Series 1991)/
(Standby Screw, Inc.)/(BancOhio National Bank LOC)/
(Subject to AMT) A-1+ 1,520,000
--------------------------------------------------------
1,500,000 Ohio State IDR Weekly VRDNs (Series 1994)/
(Anomatic Corporate)/(National City Bank LOC)/
(Subject to AMT) P-1 1,500,000
--------------------------------------------------------
5,000,000 Ohio State Water Development Authority PCR Weekly VRDNs
(Series 1989)/(Duquesne Light Power Company)/ (Barclays
Bank PLC LOC)/(Subject to AMT) A-1+ 5,000,000
--------------------------------------------------------
840,000 (a) Ohio State Water Development Authority Pure Water
Refunding & Improvement Bonds Weekly VRDNs
(Series PA-56)/(AMBAC Insured)/(Merrill Lynch
Capital Services Inc., LIQ.) VMIG1 840,000
--------------------------------------------------------
5,000,000 Ohio State Water Development Authority, 4.05% CP (Series
A)/(Cleveland Electric Illuminating Co.)/
(FGIC Insured), Mandatory Tender 6/13/1995 A-1+ 5,000,000
--------------------------------------------------------
1,750,000 Ohio State Water Development PCR, 4.25% TOBs
(Series 1998B)/(Ohio Edison Co.)/(Barclays Bank
PLC LOC)/(Subject to AMT), Optional Tender 9/1/1995 A-1+ 1,750,000
--------------------------------------------------------
1,000,000 Ohio State Water PCR Bonds Weekly VRDNs
(PPG Industries, Inc.) P-1 1,000,000
--------------------------------------------------------
700,000 Ohio State Weekly VRDNs (John Carroll University)/
(PNC Bank N.A. LOC) P-1 700,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 3,000,000 Olmsted Falls, OH, City School District, 5.00% Classroom
Facilities Improvement GO BANs, 5/31/1995 NR(3) $ 3,001,865
--------------------------------------------------------
1,500,000 Orrville, OH, IDA Weekly VRDNs (O.S. Associates)/
(National City Bank LOC)/(Subject to AMT) A-1 1,500,000
--------------------------------------------------------
1,000,000 Pickaway County, OH, IDA Weekly VRDNs
(PPG Industries, Inc.) P-1 1,000,000
--------------------------------------------------------
1,000,000 Portage County, OH, IDA Adjustable Rate Industries
Revenue Bonds Weekly VRDNs (Lovejoy Industries)/
(Star Bank N.A. LOC)/(Subject to AMT) P-1 1,000,000
--------------------------------------------------------
310,000 Portage County, OH, IDA Weekly VRDNs
(D & W Associates)/(Society National Bank, Cleveland
LOC) P-1 310,000
--------------------------------------------------------
430,000 Portage County, OH, IDR, 4.90% TOBs (Neidlinger)/
(Society National Bank, Cleveland LOC)/(Subject to
AMT), Optional Tender 9/1/1995 P-1 430,000
--------------------------------------------------------
1,600,000 Sharonville, OH, IDR Weekly VRDNs (Xtek, Inc.)/
(Fifth Third Bank LOC)/(Subject to AMT) VMIG1 1,600,000
--------------------------------------------------------
880,000 Solon, OH, IDR Weekly VRDNs (Graphic Laminating,
Inc.)/(Society National Bank, Cleveland LOC) P-1 880,000
--------------------------------------------------------
1,400,000 Stark County, OH, IDR Weekly VRDNs (Sancap
Abrasives)/(Society National Bank, Cleveland LOC) P-1 1,400,000
--------------------------------------------------------
2,685,000 Stark County, OH, IDR, Sewer District Improvements
Notes, 5.00% BANs (Series 1995-1), 4/3/1996 NR(3) 2,694,475
--------------------------------------------------------
2,000,000 Stark County, OH, IDR, Various Purpose Notes, 5.00% BANs
(Series 1995-1), 4/3/1996 NR(3) 2,007,058
--------------------------------------------------------
2,450,000 Stark County, OH, IDR, Weekly VRDNs (Series 1994)/
(Wilkof Morris)/(Society Bank & Trust Co. LOC)/
(Subject to AMT) P-1 2,450,000
--------------------------------------------------------
1,350,000 Strongsville, OH, IDR, Adjustable Rate Demand Weekly
VRDNs (Series 1994)/(Nutro Machinery Corporation)/
(Huntington National Bank LOC)/(Subject to AMT) A-1 1,350,000
--------------------------------------------------------
2,000,000 Summit County, OH, 5.00% BANs, 3/7/1996 NR(3) 2,005,675
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 1,000,000 Summit County, OH, IDB Weekly VRDNs (Series 1994)/
(Austin Printing Co., Inc.)/(Bank One, Akron N.A. LOC)/
(Subject to AMT) P-1 $ 1,000,000
--------------------------------------------------------
4,500,000 Summit County, OH, IDB Weekly VRDNs (Series 1994)/
(Harry London Candies, Inc. )/(Bank One, Akron N.A.
LOC)/(Subject to AMT) P-1 4,500,000
--------------------------------------------------------
2,900,000 Summit County, OH, IDR Weekly VRDNs (Maison Aine Limited
Partnership)/(Union Bank of Switzerland LOC)/ (Subject
to AMT) P-1 2,900,000
--------------------------------------------------------
1,115,000 Summit County, OH, IDR, 3.40% Semi-Annual TOBs (Rogers
Industrial Products, Inc.)/(Bank One, Akron N.A.
LOC)/(Subject to AMT), Optional Tender 5/1/1995 P-1 1,115,000
--------------------------------------------------------
795,000 Summit County, OH, IDR, 4.70% Semi-Annual TOBs
(Bechmer-Boyce)/(Society National Bank, Cleveland LOC)/
(Subject to AMT), Optional Tender 7/16/1995 P-1 795,000
--------------------------------------------------------
950,000 Summit County, OH, IDR, 4.85% Semi-Annual TOBs
(S.D. Meyers, Inc.)/(Bank One, Akron N.A. LOC)/
(Subject to AMT), Optional Tender 8/15/1995 P-1 950,000
--------------------------------------------------------
410,000 Summit County, OH, IDR, 4.85% TOBs (Keltec Industries)/
(Bank One, Akron N.A. LOC)/(Subject to AMT),
Optional Tender 9/1/1995 P-1 410,000
--------------------------------------------------------
825,000 Summit County, OH, IDR, 4.85% TOBs (Universal Rack)/
(National City Bank, Cleveland LOC)/(Subject to AMT),
Optional Tender 9/1/1995 P-1 825,000
--------------------------------------------------------
1,345,000 Summit County, OH, IDR, 4.95% Semi-Annual TOBs (Matech
Machine Tool Company)/(Bank One,
Akron N.A. LOC), Optional Tender 8/1/1995 P-1 1,345,000
--------------------------------------------------------
1,000,000 Summit County, OH, IDR, Weekly VRDNs (Series 1995)/
(Cardtech Project)/(Society National Bank LOC)/
(Subject to AMT) P-1 1,000,000
--------------------------------------------------------
2,890,000 Summit County, OH, IDRB Weekly VRDNs (Series
1994B)/(Harry London Candies, Inc. )/
(Bank One, Akron N.A. LOC)/(Subject to AMT) P-1 2,890,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 1,740,000 Toledo, OH, City Services Special Assessment Notes,
4.15% BANs, 6/1/1995 MIG1 $ 1,740,278
--------------------------------------------------------
3,000,000 Toledo, OH, City Services Special Assessment Notes,
4.80% RANs (Services 1994)/(Canadian Imperial Bank of
Commerce LOC), 7/27/1995 MIG1 3,003,498
--------------------------------------------------------
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
--------------------------------------------------------
2,000,000 Toledo-Lucas County, OH, Port Authority, IDA, 4.05% CP
(CSX Corp.)/(Bank of Nova Scotia, Toronto LOC),
Mandatory Tender 6/13/1995 A-1+ 2,000,000
--------------------------------------------------------
3,000,000 Trumbull County, OH, Correctional Facilities 4.83% BANs
(Series 1995), 4/11/1996 NR(4) 3,003,509
--------------------------------------------------------
3,000,000 Trumbull County, OH, IDA Weekly VRDNs (Series 1989)/
(McDonald Steel, Inc.)/(PNC Bank N.A. LOC)/
(Subject to AMT) A-1 3,000,000
--------------------------------------------------------
1,380,000 Trumbull County, OH, IDA Weekly VRDNs (Series 1994)/
(Churchill Downs, Inc.)/(Bank One, Columbus N.A. LOC)/
(Subject to AMT) P-1 1,380,000
--------------------------------------------------------
3,000,000 University of Cincinnati, OH, 4.75% BANs (Series T),
8/30/1995 A-1 3,006,700
--------------------------------------------------------
2,200,000 West Clermont, OH, Local School District, 5.25%
School Improvement UT GO BANs, 8/9/1995 NR 2,203,257
--------------------------------------------------------
4,100,000 Westlake, OH, IDR Weekly VRDNs (Kahal Limited
Partnership)/(Society National Bank, Cleveland LOC)/
(Subject to AMT) P-1 4,100,000
--------------------------------------------------------
1,600,000 Wood County, OH, Weekly VRDNs (Principle Business
Enterprises)/(National City Bank LOC)/(Subject to AMT) P-1 1,600,000
--------------------------------------------------------
1,700,000 Wooster City, OH, 5.00% LT Water System Improvement
BANS, 10/4/1995 NR(3) 1,703,844
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$ 5,500,000 (a) Youngstown City School District, OH, Municipal
Installment Trust Receipts Weekly VRDNs (Series 1994A)/
(Internationale Nederlanden Bank, N.V. LOC)/
(Subject to AMT) A-1+ $ 5,500,000
-------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST(B) $211,821,696
-------------------------------------------------------- ------------
</TABLE>
(a) Denotes restricted securities which are subject to resale under Federal
Securities laws. These securities have been determined to be liquid under
criteria established by the Board of Trustees.
(b) Also represents cost for federal tax purposes.
* See notes to Portfolio of Investments on page 14.
Note: The categories of investments are shown as a percentage of net assets
($213,814,162) at
April 30, 1995.
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following abbreviations are used throughout 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
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bonds
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
LT -- Limited Tax
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
RANs -- Revenue Anticipation Notes
SFM -- Single Family Mortgage
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements.)
OHIO MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
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.
MIG1This designation denotes best quality. There is present strong protection by
established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the
- --------------------------------------------------------------------------------
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
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 edged." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized 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 which suggest a susceptibility to impairment sometime in the future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" by Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
NR(4) The underlying issuer/obligor/guarantor has other outstanding debt rated
"BBB" by S&P or "Baa" by Moody's.
OHIO MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $211,821,696
- -------------------------------------------------------------------------------
Cash 130,589
- -------------------------------------------------------------------------------
Income receivable 2,057,190
- -------------------------------------------------------------------------------
Receivable for investments sold 40,000
- -------------------------------------------------------------------------------
Receivable for shares sold 20,000
- -------------------------------------------------------------------------------
Deferred expenses 18,130
- ------------------------------------------------------------------------------- ------------
Total assets 214,087,605
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Income distribution payable $205,968
- --------------------------------------------------------------------
Accrued expenses 67,475
- -------------------------------------------------------------------- --------
Total liabilities 273,443
- ------------------------------------------------------------------------------- ------------
NET ASSETS for 213,814,162 shares outstanding $213,814,162
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------
Institutional Shares ($64,568,551 / 64,568,551 shares outstanding) $1.00
- ------------------------------------------------------------------------------- ------------
Cash II Shares ($149,245,611 / 149,245,611 shares 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, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest $4,565,643
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 447,092
- ----------------------------------------------------------------------
Administrative personnel and services fee 84,612
- ----------------------------------------------------------------------
Custodian fees 30,090
- ----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 32,293
- ----------------------------------------------------------------------
Directors'/Trustees' fees 1,418
- ----------------------------------------------------------------------
Auditing fees 7,634
- ----------------------------------------------------------------------
Legal fees 5,280
- ----------------------------------------------------------------------
Portfolio accounting fees 25,461
- ----------------------------------------------------------------------
Distribution services fee-Cash II Shares 230,425
- ----------------------------------------------------------------------
Shareholder services fee-Cash II Shares 192,021
- ----------------------------------------------------------------------
Share registration costs 22,112
- ----------------------------------------------------------------------
Printing and postage 9,925
- ----------------------------------------------------------------------
Insurance premiums 2,623
- ----------------------------------------------------------------------
Miscellaneous 6,395
- ---------------------------------------------------------------------- ----------
Total expenses 1,097,381
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $ 37,829
- -----------------------------------------------------------
Waiver of distribution services fee 192,021 229,850
- ----------------------------------------------------------- -------- ----------
Net expenses 867,531
- ------------------------------------------------------------------------------------ ----------
Net investment income $3,698,112
- ------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------
Net investment income $ 3,698,112 $ 4,456,860
- -------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------
Distributions from net investment income:
- --------------------------------------------------------------
Institutional Shares (1,231,907) (1,561,810)
- --------------------------------------------------------------
Cash II Shares (2,466,205) (2,895,050)
- -------------------------------------------------------------- ------------- -------------
Change in net assets resulting from distributions to
shareholders (3,698,112) (4,456,860)
- -------------------------------------------------------------- ------------- -------------
SHARE TRANSACTIONS--
- --------------------------------------------------------------
Proceeds from sale of Shares 651,163,900 809,574,268
- --------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment
of distributions declared 2,533,161 2,932,696
- --------------------------------------------------------------
Cost of Shares redeemed (658,432,371) (802,723,017)
- -------------------------------------------------------------- ------------- -------------
Change in net assets resulting from Share transactions (4,735,310) 9,783,947
- -------------------------------------------------------------- ------------- -------------
Change in net assets (4,735,310) 9,783,947
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Beginning of period 218,549,472 208,765,525
- -------------------------------------------------------------- ------------- -------------
End of period $ 213,814,162 $ 218,549,472
- -------------------------------------------------------------- ------------- -------------
</TABLE>
(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>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1995 ------------------------------------
(UNAUDITED) 1994 1993 1992 1991(A)
----------- ------ ------ ------ ------
<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 0.02 0.02 0.02 0.03 0.02
- ----------------------------------------- -------- ------ ------ ------ ------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions to shareholders from net
investment income (0.02) (0.02 ) (0.02 ) (0.03 ) (0.02 )
- ----------------------------------------- -------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------- -------- ------ ------ ------ ------
TOTAL RETURN(B) 1.75% 2.41 % 2.33 % 3.21 % 2.40 %
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.57%(c) 0.55 % 0.48 % 0.46 % 0.35 %(c)
- -----------------------------------------
Net investment income 3.52%(c) 2.36 % 2.30 % 3.10 % 4.46 %(c)
- -----------------------------------------
Expense waiver/reimbursement(d) 0.03%(c) 0.07 % 0.19 % 0.25 % 0.32 %(c)
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $64,569 $62,499 $81,748 $74,342 $44,771
- -----------------------------------------
</TABLE>
(a) Reflects operations for the period from April 22, 1991 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1995 ------------------------------------
(UNAUDITED) 1994 1993 1992 1991(A)
------------- ------- ------- ------- ------
<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 0.02 0.02 0.02 0.03 0.02
- ----------------------------------------- --------- ------ ------ ------ ------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions from net investment
income (0.02) (0.02) (0.02) (0.03) (0.02 )
- ----------------------------------------- --------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------- --------- ------ ------ ------ ------
TOTAL RETURN (B) 1.60% 2.10% 2.02% 2.90% 2.27 %
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.87%(c) 0.85% 0.78% 0.76% 0.63 %(c)
- -----------------------------------------
Net investment income 3.21%(c) 2.09% 2.01% 2.86% 4.18 %(c)
- -----------------------------------------
Expense waiver/reimbursement (d) 0.28%(c) 0.24% 0.19% 0.25% 0.34 %(c)
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $149,246 $156,051 $127,017 $133,877 $94,081
- -----------------------------------------
</TABLE>
(a) Reflects operations for the period from April 22, 1991 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present 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 offers two classes of shares: Institutional Shares and Cash II Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
CONCENTRATION OF CREDIT RISK--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
tax-exempt mutual fund that invests nationally. In order to reduce the credit
risk associated with such factors, at April 30, 1995, 65% 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 value of investments insured by or supported (backed) by a
letter of credit for any one institution or agency does not exceed 11% of
total investments.
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions
exempt from such registration. Many restricted securities may be resold in
the secondary market in transactions exempt from registration. In some cases,
the restricted securities may be resold without registration upon exercise of
a demand feature. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees ("the 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 Act. Additional information on each restricted security held at April 30,
1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------------ ------------- ------------
<S> <C> <C>
Hamilton County, OH, Sewer System Improvement
and Revenue Bonds Weekly VRDNs 7/1/93 $2,260,000
Ohio HFA SFM Weekly VRDNs 3/1/94 6,430,000
Ohio State Water Development Authority
Pure Water Refunding & Improvement Bonds Weekly VRDNs 12/22/93 1,260,000
Youngstown City School District, OH,
Municipal Installment Trust Receipts Weekly VRDNs 1/4/94 5,500,000
</TABLE>
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 its shares, have been deferred and are being amortized
using the straight-line method not to exceed a period of five years from the
Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
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). At April
30, 1995, capital paid-in aggregated $213,814,162. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1995 1994
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES
- ----------------------------------------------------------------
Shares sold 271,515,067 275,545,260
- ----------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 131,167 99,198
- ----------------------------------------------------------------
Shares redeemed (269,576,564) (294,893,757)
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from Institutional Shares transactions 2,069,670 (19,249,299)
- ---------------------------------------------------------------- ------------ ------------
CASH II SHARES
- ----------------------------------------------------------------
Shares sold 379,648,833 534,029,008
- ----------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 2,401,994 2,833,498
- ----------------------------------------------------------------
Shares redeemed (388,855,807) (507,829,260)
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from Cash II Shares transactions (6,804,980) 29,033,246
- ---------------------------------------------------------------- ------------ ------------
Net change resulting from share transactions (4,735,310) 9,783,947
- ---------------------------------------------------------------- ------------ ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund's Cash II Shares. The Plan provides that the Fund may incur
distribution expenses up to .30 of 1% of the average daily net assets of the
Cash II shares, annually, to
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
compensate FSC. The distributor may voluntarily choose to waive any portion of
its fee. The distributor can modify or terminate this voluntary waiver at any
time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services, ("FSS") the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund's Cash II shares for the period. This
fee is to obtain certain services for shareholders and to maintain the
shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company, ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $37,324 were borne initially
by the Adviser. The Fund has agreed to reimburse the Adviser at an annual rate
of .005 of 1% of average daily net assets until expenses initially borne by
Adviser are fully reimbursed or the expiration of five years after April 24,
1991 (date the Fund became effective), whichever occurs earlier. For the six
months ended April 30, 1995, the Fund paid $5,566 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions value with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$215,230,000 and $252,965,000 respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- -----------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson Vice President
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Vice President and Treasurer
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectuses which contain facts
concerning its objective and policies, management fees, expenses and other
information.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Virginia
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995. The fund consists of two classes of
shares known as Institutional Shares and Institutional Service Shares.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Shares and Institutional
Service Shares.
Virginia Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Virginia residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
Virginia municipal securities, issued to fund projects as varied as education,
health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $2
million in total distributions to shareholders. As of this report, the fund's
total net assets are $116.1 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
AN INTERVIEW WITH THE FUND'S PORTFOLIO MANAGER, JEFF A. KOZEMCHAK
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995. On
November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped to contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield* of the fund's
Institutional Shares rose from 3.01% on November 1, 1994 to 3.93% on April 30,
1995. For the Institutional Service Shares, the seven-day net yield* rose from
2.91% at the beginning of the period to 3.83% at April 30, 1995.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. YIELD WILL VARY.
2
- --------------------------------------------------------------------------------
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A We continued to add to our positions of short maturity commercial paper (CP)
and fully utilized VRDNs in order to maintain the responsiveness of the
portfolio to changes in short-term interest rates. VRDNs adjust quickly to
changes in Fed policy as well as supply and demand imbalances that are unique to
the municipal money markets. The purchase of CP typically allows us to pick up
an additional yield premium over VRDNs over time, while still retaining
portfolio responsiveness to further rate increases. As a result of these actions
and a lack of supply of attractive fixed-rate notes and bonds in Virginia, the
average maturity of the fund moved from 56 days at the beginning of the
reporting period to 30 days at the end.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly in starting mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become very attractive versus comparable maturity taxable
securities.
3
VIRGINIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--98.9%
- ------------------------------------------------------------------------
VIRGINIA--95.5%
------------------------------------------------------------
$1,000,000 Alexandria, VA, IDA Weekly VRDNs (American Red Cross)/
(Sanwa Bank Ltd. LOC) A-1+ $ 1,000,000
------------------------------------------------------------
5,000,000 Alexandria, VA, Redevelopment and Housing Authority Weekly
VRDNs (Crystal City Apartments)/(Safeco Insurance Co. of
America Insured)/(Sumitomo Bank Ltd. BPA)/(Subject to AMT) A-1 5,000,000
------------------------------------------------------------
2,200,000 Amelia County, VA, IDA Weekly VRDNs (Series 1991)/ (Chambers
Waste Systems)/(NationsBank of North Carolina N.A.
LOC)/(Subject to AMT) VMIG1 2,200,000
------------------------------------------------------------
4,000,000 Arlington County, VA, Weekly VRDNs (Ballston Public
Parking)/(Citibank N.A. LOC) A-1 4,000,000
------------------------------------------------------------
5,500,000 Campbell County, VA, IDA Solid Waste Disposal Facility
Revenue Bonds, 4.75% CP (Series 1994)/(Georgia-Pacific
Corp.)/ (Industrial Bank of Japan Ltd. LOC)/(Subject to
AMT), Mandatory Tender 5/30/1995 A-1 5,500,000
------------------------------------------------------------
4,625,000 Carroll County, VA, IDA, IDRB Weekly VRDNs (Series 1995)/
(Kentucky Derby Hosiery Co., Inc.)/(Liberty National Bank &
Trust Co. LOC)/(Subject to AMT) A-1+ 4,625,000
------------------------------------------------------------
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
------------------------------------------------------------
2,025,000 Dinwiddie County, VA, IDA Weekly VRDNs (Tindall Concrete VA,
Inc. Project)/(First Union National Bank, Charlotte LOC)/
(Subject to AMT) P-1 2,025,000
------------------------------------------------------------
3,515,000 Dinwiddie County, VA, IDA, IDRB Weekly VRDNs (Series
1991)/(Maclin-Zimmer-McGill Tobacco Co., Inc.)/(Wachovia
Bank & Trust Co. N.A. LOC)/(Subject to AMT) P-1 3,515,000
------------------------------------------------------------
1,050,000 Fairfax County, VA, EDA Weekly VRDNs (William Byrd Press)/
(NationsBank of Virginia N.A. LOC) VMIG1 1,050,000
------------------------------------------------------------
</TABLE>
4
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
VIRGINIA--CONTINUED
------------------------------------------------------------
$5,000,000 Fairfax County, VA, IDA, 4.30% CP (Series 1993B)/(Inova
Health System), Mandatory Tender 5/23/1995 A-1 $ 5,000,000
------------------------------------------------------------
1,000,000 Fairfax County, VA, Redevelopment and Housing Finance
Authority Weekly VRDNs (Chase Commons Associates)/ (Bankers
Trust Co. LOC) P-1 1,000,000
------------------------------------------------------------
6,100,000 Falls Church, VA, IDA, 3.90% Semi-Annual TOBs (Series 1985)/
(Kaiser Permanente Health Care System), Optional Tender
5/1/1995 A-1+ 6,100,000
------------------------------------------------------------
600,000 Fauquier County, VA, IDA Weekly VRDNs (Warrenton Development
Co.)/(NationsBank of Maryland N.A. LOC) P-1 600,000
------------------------------------------------------------
7,113,000 Fluvanna County, VA, IDA Weekly VRDNs (Series 1986)/
(Thomasville Furniture Industries)/(Union Bank of
Switzerland LOC)/(Subject to AMT) P-1 7,113,000
------------------------------------------------------------
1,070,000 Grayson County, VA, IDA Weekly VRDNs (Series 1987)/
(Robertshaw Controls Company)/(NationsBank of Virginia N.A.
LOC)/(Subject to AMT) P-1 1,070,000
------------------------------------------------------------
4,000,000 Halifax County, VA, IDA, MMMs, PCR, 4.20% CP (Virginia
Electric Power Co.)/(Subject to AMT), Mandatory Tender
7/17/1995 A-1 4,000,000
------------------------------------------------------------
4,000,000 Halifax County, VA, IDA, MMMs, PCR, 4.20% CP (Virginia
Electric Power Co.)/(Subject to AMT), Mandatory Tender
7/20/1995 A-1 4,000,000
------------------------------------------------------------
3,500,000 Halifax County, VA, IDA, MMMs, PCR, 4.25% CP (Virginia
Electric Power Co.)/(Subject to AMT), Mandatory Tender
7/19/1995 A-1 3,500,000
------------------------------------------------------------
2,582,000 Harrisonburg, VA, Redevelopment & Housing Authority Weekly
VRDNs (Series 1989)/(Potomac Hills Apartments)/ (NationsBank
of Virginia N.A. LOC)/(Subject to AMT) P-1 2,582,000
------------------------------------------------------------
3,740,000 Newport News, VA, 4.10% UT GO Refunding Bonds (Series
1922B), 7/1/1995 Aa 3,741,150
------------------------------------------------------------
</TABLE>
5
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
VIRGINIA--CONTINUED
------------------------------------------------------------
$2,200,000 Peninsula Port Authority of Virginia, Coal Terminal Revenue
Refunding Bonds, 4.20% CP (Series 1987A)/(Dominion Terminal
Associates)/(National Westminster Bank PLC LOC), Mandatory
Tender 5/30/1995 P-1 $ 2,200,000
------------------------------------------------------------
5,044,000 Peninsula Port Authority of Virginia, IDRB Weekly VRDNs
(Series 1986)/(Eeco, Inc.)/(NationsBank of Virginia N.A.
LOC)/ (Subject to AMT) P-1 5,044,000
------------------------------------------------------------
3,500,000 Peninsula Port Authority of Virginia, Facility Revenue
Refunding Bonds, 4.10% CP (Series 1992)/(CSX Corp.)/(Bank of
Nova Scotia LOC), Mandatory Tender 5/18/1995 A-1+ 3,500,000
------------------------------------------------------------
4,000,000 Peninsula Port Authority of Virginia, Facility Revenue
Refunding Bonds, 4.20% CP (Series 1992)/(CSX Corp.)/(Bank of
Nova Scotia LOC), Mandatory Tender 5/15/1995 A-1+ 4,000,000
------------------------------------------------------------
1,500,000 Peninsula Port Authority of Virginia, Facility Revenue
Refunding Bonds, 4.05% CP (Series 1992)/(CSX Corp.)/(Bank of
Nova Scotia LOC), Mandatory Tender 7/17/1995 A-1+ 1,500,000
------------------------------------------------------------
1,060,000 Richmond, VA, IDA Revenue Refunding Bonds, 4.50% Semi-Annual
TOBs (Series 1987B)/(Crow-Klein-Macfarlane)/(First Union
National Bank of Virginia LOC)/(Subject to AMT), Optional
Tender 5/15/1995 P-1 1,060,000
------------------------------------------------------------
1,000,000 Richmond, VA, Redevelopment and Housing Authority Weekly
VRDNs (Series B-9)/Red Tobacco Row)/(Bayerische Landesbank
LOC)/(Subject to AMT) VMIG1 1,000,000
------------------------------------------------------------
2,900,000 South Hill, VA, IDA Weekly VRDNs (Series 1987)/(South Hill
Veneers, Inc.)/(Bank One, Columbus N.A. LOC)/(Subject to
AMT) P-1 2,900,000
------------------------------------------------------------
2,590,000 Tazewell County, VA, IDA Weekly VRDNs (Series 1993)/(Seville
Properties Bluefield L.P.)/(Huntington National Bank,
Columbus LOC) P-1 2,590,000
------------------------------------------------------------
3,500,000 Virginia Education Loan Authority, 4.10% Annual TOBs
(Escrowed in Treasuries), 8/24/1995 AAA 3,500,000
------------------------------------------------------------
</TABLE>
6
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
VIRGINIA--CONTINUED
------------------------------------------------------------
$1,500,000 Virginia State Housing Development Authority Weekly VRDNs
(Series 1987A)/(AHC Service Center, Inc.)/(Mitsubishi Bank
Ltd. LOC) P-1 $ 1,500,000
------------------------------------------------------------
5,000,000 Virginia State, HDA, 3.90% Annual TOBs (Series F), Mandatory
Tender 5/10/1995 A-1+ 5,000,000
------------------------------------------------------------
6,000,000 Virginia State, HDA, 4.20% Semi-Annual TOBs (Series 1993)/
(Subject to AMT), Mandatory Tender 5/11/1995 A-1+ 6,000,000
------------------------------------------------------------
1,507,000 Williamsburg, VA, IDA Weekly VRDNs (Series 1988)/(Colonial
Williamsburg Foundation Museum)/(Sanwa Bank Ltd. LOC) P-1 1,507,000
------------------------------------------------------------ ------------
Total 110,922,150
------------------------------------------------------------ ------------
PUERTO RICO--1.2%
------------------------------------------------------------
1,400,000 Puerto Rico Government Development Bank, Weekly VRDNs
(Credit Suisse and Sumitomo Bank Ltd. LOCs) A-1+ 1,400,000
------------------------------------------------------------ ------------
VIRGIN ISLANDS--2.2%
------------------------------------------------------------
2,500,000 Virgin Islands, HFA, SFM Revenue Bonds, 4.375% Annual TOBs
(Series 1995B)/(FGIC Insured)/(Subject to AMT), Optional
Tender 2/1/1996 A-1+ 2,500,000
------------------------------------------------------------ ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (a) $114,822,150
------------------------------------------------------------ ------------
------------
<FN>
(a) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 9.
Note: The categories of investments are shown as a percentage of net assets
($116,109,106) at April 30, 1995.
</TABLE>
7
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
The following abbreviations are used throughout this portfolio:
<TABLE>
<S> <C>
AMT --Alternative Minimum Tax
BPA --Bond Purchase Agreement
CP --Commercial Paper
EDA --Economic Development Authority
FGIC --Financial Guaranty Insurance Company
GO --General Obligation
HDA --Hospital Development Authority
HFA --Housing Finance Authority/Agency
IDA --Industrial Development Authority
IDRB --Industrial Development Revenue Bonds
LOCs --Letter(s) of Credit
LOC --Letter of Credit
MMMs --Money Market Municipals
PCR --Pollution Control Revenue
PLC --Public Limited Company
SFM --Single Family Mortgage
TOBs --Tender Option Bonds
UT --Unlimited Tax
VA --Virginia/Veterans Administration
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
8
VIRGINIA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1--This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2--This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
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
9
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1--This highest category designation indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1--Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.
P-2--Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
10
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA--Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized 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 which
suggest a susceptibility to impairment sometime in the future.
NR--indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
11
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value (identified and tax cost
$114,822,150) $114,822,150
- ---------------------------------------------------------------------------------------------
Cash 446,229
- ---------------------------------------------------------------------------------------------
Income receivable 1,011,905
- ---------------------------------------------------------------------------------------------
Receivable for shares sold 313
- ---------------------------------------------------------------------------------------------
Deferred expenses 26,332
- --------------------------------------------------------------------------------------------- ------------
Total assets 116,306,929
- ---------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------
Payable for shares redeemed $ 49,093
- --------------------------------------------------------------------------------
Income distribution payable 111,890
- --------------------------------------------------------------------------------
Accrued expenses 36,840
- -------------------------------------------------------------------------------- ----------
Total liabilities 197,823
- --------------------------------------------------------------------------------------------- ------------
NET ASSETS for 116,109,106 shares outstanding $116,109,106
- --------------------------------------------------------------------------------------------- ------------
------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
($25,389,788 DIVIDED BY 25,389,788 shares outstanding) $ 1.00
- --------------------------------------------------------------------------------------------- ------------
------------
INSTITUTIONAL SERVICE SHARES:
($90,719,318 DIVIDED BY 90,719,318 shares outstanding) $ 1.00
- --------------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
12
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------------
Interest $2,308,970
- --------------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------------------
Investment advisory fee $232,883
- --------------------------------------------------------------------------------------
Administrative personnel and services fee 76,863
- --------------------------------------------------------------------------------------
Custodian fees 17,614
- --------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 18,452
- --------------------------------------------------------------------------------------
Directors'/Trustees' fees 3,071
- --------------------------------------------------------------------------------------
Auditing fees 7,331
- --------------------------------------------------------------------------------------
Legal fees 8,599
- --------------------------------------------------------------------------------------
Portfolio accounting fees 25,737
- --------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 114,886
- --------------------------------------------------------------------------------------
Share registration costs 16,168
- --------------------------------------------------------------------------------------
Printing and postage 10,047
- --------------------------------------------------------------------------------------
Insurance premiums 3,379
- --------------------------------------------------------------------------------------
Miscellaneous 4,013
- -------------------------------------------------------------------------------------- --------
Total expenses 539,043
- --------------------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------------
Waiver of investment advisory fee $138,873
- ---------------------------------------------------------------------------
Waiver of shareholder services fee 68,932 207,805
- --------------------------------------------------------------------------- -------- --------
Net expenses 331,238
- -------------------------------------------------------------------------------------------------- ----------
Net investment income $1,977,732
- -------------------------------------------------------------------------------------------------- ----------
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
13
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL
30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------
Net investment income $ 1,977,732 $ 2,874,102
- --------------------------------------------------------------------------- -------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------
Distributions from net investment income:
- ---------------------------------------------------------------------------
Institutional Shares (429,412) (394,677)
- ---------------------------------------------------------------------------
Institutional Service Shares (1,548,320) (2,479,425)
- --------------------------------------------------------------------------- -------------- ----------------
Change in net assets resulting from distributions to shareholders (1,977,732) (2,874,102)
- --------------------------------------------------------------------------- -------------- ----------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------------------
Proceeds from sale of Shares 481,856,443 1,227,739,774
- ---------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 1,256,021 2,081,737
- ---------------------------------------------------------------------------
Cost of Shares redeemed (487,447,591) (1,162,235,549)
- --------------------------------------------------------------------------- -------------- ----------------
Change in net assets resulting from Share transactions (4,335,127) 67,585,962
- --------------------------------------------------------------------------- -------------- ----------------
Change in net assets (4,335,127) 67,585,962
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period 120,444,233 52,858,271
- --------------------------------------------------------------------------- -------------- ----------------
End of period $ 116,109,106 $ 120,444,233
- --------------------------------------------------------------------------- -------------- ----------------
-------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
VIRGINIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER
SIX MONTHS ENDED 31,
APRIL 30, 1995 --------------------
(UNAUDITED) 1994 1993(a)
---------------- -------- ---------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------
Net investment income 0.02 0.03 0.0003
- ---------------------------------------- ------- -------- ---------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.02) (0.03) (0.0003)
- ---------------------------------------- ------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------- ------- -------- ---------
------- -------- ---------
TOTAL RETURN (b) 1.75% 2.57% 0.35%
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 0.49%(c) 0.33% 0.09%(c)
- ----------------------------------------
Net investment income 3.50%(c) 2.56% 2.68%(c)
- ----------------------------------------
Expense waiver/reimbursement (d) 0.24%(c) 0.37% 1.04%(c)
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period (000
omitted) $25,389 $20,360 $ 7,210
- ----------------------------------------
<FN>
(a) Reflects operations for the period from September 16, 1993 (date of initial
public investment) to October 31, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
15
VIRGINIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER
SIX MONTHS ENDED 31,
APRIL 30, 1995 --------------------
(UNAUDITED) 1994 1993(a)
---------------- --------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------
Net investment income 0.02 0.02 0.0003
- --------------------------------------------------- ------- --------- --------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Distributions from net investment income (0.02) (0.02) (0.0003)
- --------------------------------------------------- ------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------- ------- --------- --------
------- --------- --------
TOTAL RETURN (b) 1.70% 2.44% 0.34%
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses 0.59%(c) 0.40% 0.19%(c)
- ---------------------------------------------------
Net investment income 3.37%(c) 2.42% 2.67%(c)
- ---------------------------------------------------
Expense waiver/reimbursement (d) 0.39%(c) 0.37% 1.04%(c)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted) $90,719 $100,084 $45,648
- ---------------------------------------------------
<FN>
(a) Reflects operations for the period from September 16, 1993 (date of initial
public investment) to October 31, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
16
VIRGINIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present 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. The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
56.9% 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 value of investments insured by
or
17
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
supported (backed) by a letter of credit for any one institution or agency
does not exceed 7.8% of total investments.
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 its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value)
for each class of shares. At April 30, 1995, capital paid-in aggregated
$116,109,106. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL PERIOD ENDED
30, 1995 OCTOBER 31, 1994
------------- ----------------
INSTITUTIONAL SHARES SHARES SHARES
- ----------------------------------------------------------- ------------- ----------------
<S> <C> <C>
Shares sold 47,825,916 66,227,881
- -----------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 11,748 28,365
- -----------------------------------------------------------
Shares redeemed (42,808,082) (53,106,542)
- ----------------------------------------------------------- ------------- ----------------
Net change resulting from Institutional Shares
transactions 5,029,582 13,149,704
- ----------------------------------------------------------- ------------- ----------------
------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL PERIOD ENDED
30, 1995 OCTOBER 31, 1994
------------- ----------------
INSTITUTIONAL SERVICE SHARES SHARES SHARES
- --------------------------------------------------------- ------------- ----------------
<S> <C> <C>
Shares sold 434,030,527 1,161,511,893
- ---------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 1,244,273 2,053,372
- ---------------------------------------------------------
Shares redeemed (444,639,509) (1,109,129,007)
- --------------------------------------------------------- ------------- ----------------
Net change resulting from Institutional Service Shares
transactions (9,364,709) 54,436,258
- --------------------------------------------------------- ------------- ----------------
Net change resulting from share transactions (4,335,127) 67,585,962
- --------------------------------------------------------- ------------- ----------------
------------- ----------------
</TABLE>
18
VIRGINIA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Institutional Service Shares. This fee is
to obtain certain services for shareholders and to maintain the shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $33,493 were borne initially
by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following August 30, 1993
(date the Fund first became effective). For the period ended April 30, 1995, the
Fund paid $4,466 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment adviser), common Directors or
Trustees, and common Officers. These transactions were made at current market
value pursuant to Rule 17a-7 under the Act amounting to $31,800,000 and
$59,600,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
19
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the fund's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
20
- --------------------------------------------------------------------------------
VIRGINIA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS -----------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779 -----------------------------------
[LOGO]
RECYCLED
PAPER
314229816
314229824
G00133-01 (6/95) -----------------------------------
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Alabama
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements.
Alabama Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Alabama residents, in the form of double tax-free* monthly income.
The fund is able to pursue this income by maintaining a portfolio of Alabama
municipal securities, issued to fund projects as varied as education, health
care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid more than $2.6
million in total distributions to shareholders. As of this report, the fund's
total net assets are $142.6 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
JEFF A. KOZEMCHAK, CFA, VICE PRESIDENT & PORTFOLIO MANAGER
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995. On
November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield of the fund rose from
3.16% on November 1, 1994, to 4.21% on April 30, 1995*.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. YIELD WILL VARY.
2
- --------------------------------------------------------------------------------
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A We added to the fund's holdings of short maturity commercial paper (CP) and
VRDNs in order to increase the responsiveness to changes in short-term
interest rates. VRDNs adjust quickly to changes in Fed policy as well as
supply and demand imbalances that are unique to the municipal money markets. The
purchase of CP typically allows us to pick up an additional yield premium over
VRDNs over time, while still retaining portfolio responsiveness to further rate
increases. Also, the average maturity of the fund was targeted within a range of
35 to 50 days, with an emphasis on the shorter end of the target range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become attractive versus comparable maturity taxable
securities.
3
ALABAMA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.1%
- -------------------------------------------------------------------------
ALABAMA--94.9%
------------------------------------------------------------
$ 2,500,000 Alabama Special Care Facilities, 3.90% Annual TOBs (Series
1984A)/(Montgomery Hospital)/(AMBAC Insured), Optional
Tender 7/1/1995 A-1 $ 2,500,000
------------------------------------------------------------
2,000,000 Alabama State IDA Revenue Bonds Weekly VRDNs (Monarch Tile,
Inc.)/(NationsBank of Texas N.A. LOC)/(Subject to AMT) P-1 2,000,000
------------------------------------------------------------
2,500,000 Alabama State Public School And College Authority, 5.20% SB
(Escrowed to Maturity), 7/1/1995 Aaa 2,503,931
------------------------------------------------------------
1,000,000 Alabama State Public School And College Authority, 6.50% SB
(Pre-Refunded)/(Callable on 11/1/1995) Aaa 1,024,660
------------------------------------------------------------
1,000,000 Alabama State Public School And College Authority, 6.70% SB
(Pre-Refunded)/(Callable on 11/1/1995) Aaa 1,025,633
------------------------------------------------------------
1,000,000 Alabama State Public School And College Authority, 6.75% SB
(Pre-Refunded)/(Callable on 11/1/1995) Aaa 1,025,624
------------------------------------------------------------
4,750,000 Alabama State Weekly VRDNs (Pine City Fiber Co.)/(Barclays
Bank PLC LOC) VMIG1 4,750,000
------------------------------------------------------------
1,700,000 Alabama State, IDA Revenue Bonds Weekly VRDNs (Southern Bag
Corp. Ltd.)/(SouthTrust Bank of Alabama LOC)/(Subject to
AMT) P-1 1,700,000
------------------------------------------------------------
4,000,000 Alabama State, IDA Weekly VRDNs (Series 1994)/(Decatur
Aluminum Corp.)/(Star Bank N.A. LOC)/(Subject to AMT) P-1 4,000,000
------------------------------------------------------------
1,000,000 Arab, AL, IDB Revenue Refunding Bonds Weekly VRDNs (Series
1989)/(SCI Manufacturing, Inc.)/(Bank of Tokyo Ltd. LOC) A-1 1,000,000
------------------------------------------------------------
1,100,000 Arab, AL, IDB Revenue Refunding Bonds Weekly VRDNs (Series
1989)/(SCI Manufacturing, Inc.)/(Bank of Tokyo Ltd. LOC) A-1 1,100,000
------------------------------------------------------------
2,400,000 Auburn, AL, IDB Weekly VRDNs (Series A)/(Au Hotel
Limited)/(Lloyds Bank PLC, London LOC)/(Subject to AMT) P-1 2,400,000
------------------------------------------------------------
6,000,000 Birmingham, AL, 5.625% GO BANs (Series 1995A), 1/5/1996 NR(2) 6,008,473
------------------------------------------------------------
</TABLE>
4
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
ALABAMA--CONTINUED
------------------------------------------------------------
$ 2,000,000 Birmingham, AL, IDA Weekly VRDNs (Altel Industries)/
(Wachovia Bank of Georgia NA, Atlanta LOC)/(Subject to AMT) P-1 $ 2,000,000
------------------------------------------------------------
1,900,000 Birmingham, AL, IDB Weekly VRDNs (Glasforms, Inc.)/(First
Alabama Bank LOC)/(Subject to AMT) P-1 1,900,000
------------------------------------------------------------
4,590,000 Birmingham, AL, Special Care Facilities Financing Authority,
10.00% Revenue Bonds (Health Care Facilities-Medical Center
East)/(Prerefunded), 7/1/1995 (@102) AAA 4,725,682
------------------------------------------------------------
2,000,000 Bon Air, AL, IDB Weekly VRDNs (Avondale Mills, Inc.)/(Trust
Company Bank LOC) AA- 2,000,000
------------------------------------------------------------
1,880,000 Calhoun County, AL, Economic Development Council Weekly
VRDNs (Series 1990)/(Food Ingredients Technology Co.)/
(NationsBank of North Carolina N.A. LOC)/(Subject to AMT) P-1 1,880,000
------------------------------------------------------------
3,085,000 Chatom, AL, 4.60% Semi-Annual TOBs (Series 1984M)/ (Alabama
Electric Co-op., Inc.)/(NRUCFC Guaranty), Optional Tender
8/15/1995 A-1+ 3,085,000
------------------------------------------------------------
3,000,000 Decatur, AL, IDB Weekly VRDNs Revenue Refunding Bonds
(Series 1993)/(Allied Signal, Inc. Guaranty) A-1 3,000,000
------------------------------------------------------------
3,500,000 Eutaw, AL, IDB Weekly VRDNs (Mississippi Power Company
Guaranty) VMIG1 3,500,000
------------------------------------------------------------
1,865,000 Fort Payne, AL, IDB Weekly VRDNs (Ovalstrapping, Inc.)/
(U.S. Bank of Washington N.A. LOC)/(Subject to AMT) P-1 1,865,000
------------------------------------------------------------
670,000 Homewood, AL, 3.40% GO Refunding Warrants SB, 5/1/1995 NR(2) 670,000
------------------------------------------------------------
3,000,000 Homewood, AL, IDA Weekly VRDNs (Mountain Brook Inn)/
(SouthTrust Bank of Alabama LOC) P-1 3,000,000
------------------------------------------------------------
4,315,000 Hoover, AL, IDA Weekly VRDNs (Bud's Best Cookies, Inc.)/
(SouthTrust Bank of Alabama LOC)/(Subject to AMT) P-1 4,315,000
------------------------------------------------------------
330,000 Huntsville, AL, IDA Weekly FRDNs (Parkway)/(First Alabama
Bank LOC) A-1+ 330,000
------------------------------------------------------------
1,875,000 Ider, AL, IDB Weekly VRDNs (Galbreath, Inc.)/(National Bank
of Canada LOC)/(Subject to AMT) P-1 1,875,000
------------------------------------------------------------
</TABLE>
5
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
ALABAMA--CONTINUED
------------------------------------------------------------
$ 1,000,000 Jefferson County, AL, Weekly VRDNs (Special Obligation
Warrants)/(Series 1992)/(Board of Education)/(Columbus Bank
& Trust Co. LOC) A-1 $ 1,000,000
------------------------------------------------------------
1,875,000 Madison, AL, IDA Weekly VRDNs (Series A)/(Executive Inn)/
(AmSouth Bank N.A. LOC) A-1 1,875,000
------------------------------------------------------------
2,700,000 McIntosh, AL, IDB Weekly VRDNs (Ciba Geigy Corp.)/(Union
Bank of Switzerland LOC)/(Subject to AMT) A-1+ 2,700,000
------------------------------------------------------------
1,350,000 Mobile, AL, Capital Appreciation Warrant, Zero Coupon Bond
(4.15% Yield)/(Prerefunded U.S. Treasury), 8/15/1995 AAA 938,660
------------------------------------------------------------
2,595,000 Mobile, AL, Downtown Redevelopment Authority Weekly VRDNs
(Series 1992)/(Mitchell Project)/(Trust Company Bank
LOC)/(Subject to AMT) P-1 2,595,000
------------------------------------------------------------
2,500,000 Mobile, AL, IDA Weekly VRDNs (McRae's, Inc.)/(NationsBank of
North Carolina N.A. LOC) A-1 2,500,000
------------------------------------------------------------
4,100,000 Mobile, AL, IDB Weekly VRDNs (Series 1989)/(Newark Group
Industries, Inc.)/(First Fidelity Bank N.A. LOC)/(Subject to
AMT) VMIG1 4,100,000
------------------------------------------------------------
12,000,000 Mobile, AL, IDB, 4.50% Semi-Annual TOBs (International Paper
Co.), Optional Tender 10/15/1995 A-2 12,000,000
------------------------------------------------------------
2,000,000 Mobile, AL, IDB, PCR Weekly VRDNs (Series 1993B)/ (Alabama
Power Co. Guaranty) A-1 2,000,000
------------------------------------------------------------
3,075,000 Mobile, AL, Port City Medical Clinic Board, 4.30% CP (Series
1992A)/(Infirmiary Association)/(Fuji Bank Ltd. and
Mitsubishi Bank Ltd. LOCs), Mandatory Tender 6/9/1995 A-1 3,075,000
------------------------------------------------------------
4,030,000 Montgomery, AL, IDB Pollution Control & Solid Disposal
Revenue, 4.10% CP (General Electric Company), Mandatory
Tender 5/12/1995 A-1+ 4,030,000
------------------------------------------------------------
2,000,000 Montgomery, AL, IDB Pollution Control & Solid Disposal
Revenue, 4.10% CP (General Electric Company), Mandatory
Tender 7/18/1995 A-1+ 2,000,000
------------------------------------------------------------
1,200,000 Montgomery, AL, IDB Weekly VRDNs (Series 1988A)/(Smith
Industries)/(Trust Company Bank LOC) A-1 1,200,000
------------------------------------------------------------
</TABLE>
6
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
ALABAMA--CONTINUED
------------------------------------------------------------
$ 2,865,000 Montgomery, AL, IDB Weekly VRDNs (Series 1990A)/ (Industrial
Partners, Inc.)/(Wachovia Bank of Georgia N.A. LOC)/(Subject
to AMT) Aa2 $ 2,865,000
------------------------------------------------------------
435,000 Opelika, AL, 3.60% GO Warrants (Series 1994A)/(AMBAC
Insured), 7/1/1995 AAA 435,000
------------------------------------------------------------
3,000,000 Phoenix City, AL, IDB, 4.20% CP (Series 1988)/(Mead Coated
Board)/(ABN AMRO Bank N.V., Amsterdam LOC)/(Subject to AMT),
Mandatory Tender 5/31/1995 P-1 3,000,000
------------------------------------------------------------
3,800,000 Phoenix City, AL, IDB, 4.20% CP (Series 1988)/(Mead Coated
Board)/(ABN AMRO Bank N.V., Amsterdam LOC)/(Subject to AMT),
Mandatory Tender 7/26/1995 P-1 3,800,000
------------------------------------------------------------
1,200,000 Phoenix City, AL, IDB, 4.25% CP (Series 1988)/(Mead Coated
Board)/(ABN AMRO Bank N.V., Amsterdam LOC)/(Subject to AMT),
Mandatory Tender 5/1/1995 P-1 1,200,000
------------------------------------------------------------
2,500,000 Phoenix City, AL, IDB, 4.25% CP (Series 1988)/(Mead Coated
Board)/(ABN AMRO Bank N.V., Amsterdam LOC)/(Subject to AMT),
Mandatory Tender 7/24/1995 P-1 2,500,000
------------------------------------------------------------
930,000 Piedmont, AL, IDB Weekly VRDNs (Industrial Partners)/(First
National Bank of Atlanta LOC)/(Subject to AMT) P-1 930,000
------------------------------------------------------------
1,750,000 Scottsboro, AL, Adjusted/Fixed Rate IDRB Weekly VRDNs
(Series 1991)/(Maples Industries, Inc.)/(AmSouth Bank N.A.
LOC)/(Subject to AMT) P-1 1,750,000
------------------------------------------------------------
4,050,000 Scottsboro, AL, IDB Weekly VRDNs (Series 1994)/(Maples
Industries, Inc.)/(AmSouth Bank N.A. LOC)/(Subject to AMT) P-1 4,050,000
------------------------------------------------------------
2,000,000 St. Clair County, AL, IDB Weekly VRDNs (Series 1993)/ (EBSCO
Industries, Inc.)/(National Australia Bank Ltd. LOC)/
(Subject to AMT) A-1+ 2,000,000
------------------------------------------------------------
850,000 Sylacuaga, AL, IDB, IDRB Daily VRDNs (Series 1991)/(Parker
Fertilizer)/(SouthTrust Bank of Alabama LOC)/(Subject to
AMT) P-1 850,000
------------------------------------------------------------
2,000,000 Tuskegee, AL, IDB Weekly VRDNs (Series 1995)/(The Concrete
Company)/(Columbus Bank and Trust Co. LOC)/(Subject to AMT) P-1 2,000,000
------------------------------------------------------------
</TABLE>
7
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
ALABAMA--CONTINUED
------------------------------------------------------------
$ 2,065,000 Vincent, AL, IDA Weekly VRDNs (Headquarters Partnership)/
(National Australia Bank Ltd. LOC) P-1 $ 2,065,000
------------------------------------------------------------
2,690,000 Vincent, AL, IDB Weekly VRDNs (Series 1993)/(EBSCO
Industries, Inc.)/(National Australia Bank Ltd.
LOC)/(Subject to AMT) A-1+ 2,690,000
------------------------------------------------------------ ------------
Total 135,332,663
------------------------------------------------------------ ------------
PUERTO RICO--0.7%
------------------------------------------------------------
1,000,000 Puerto Rico Industrial, Medical & Environmental PCA, 4.00%
Annual TOBs (Series 1983A)/(Reynolds Metals Co.)/(ABN AMRO
Bank N.A. LOC), Optional Tender 9/1/1995 VMIG1 1,000,327
------------------------------------------------------------ ------------
VIRGIN ISLANDS--3.5%
------------------------------------------------------------
5,000,000 Virgin Islands HFA, 5.00% Semi-Annual TOBs Home Mortgage
Revenue Bonds (Series 1994B)/(FGIC Capital Markets Services
Investment Agreement)/(Subject to AMT), Mandatory Tender
5/1/1995 SP-1+ 5,000,000
------------------------------------------------------------ ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (a) $141,332,990
------------------------------------------------------------ ------------
------------
<FN>
(a) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 10.
Note: The categories of investments are shown as a percentage of net assets
($142,643,887) at April 30, 1995.
</TABLE>
8
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
The following abbreviations are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
AMT --Alternative Minimum Tax
BANs --Bond Anticipation Notes
CP --Commercial Paper
FGIC --Financial Guaranty Insurance Company
FRDNs --Floating Rate Demand Note
GO --General Obligation
HFA --Housing Finance Authority/Agency
IDA --Industrial Development Authority
IDB --Industrial Development Bond
IDRB --Industrial Development Revenue Bonds
LOCs --Letter(s) of Credit
LOC --Letter of Credit
NRUCFC --National Rural Utilities Cooperative Finance Corporation
PCA --Pollution Control Authority
PCR --Pollution Control Revenue
PLC --Public Limited Company
SB --Serial Bond
TOBs --Tender Option Bonds
VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements.)
9
ALABAMA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1--This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2--This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
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
10
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1--This highest category designation indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1--Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.
P-2--Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
11
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA--Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized 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 which
suggest a susceptibility to impairment sometime in the future.
NR--indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
12
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $141,332,990
- -------------------------------------------------------------------------------------------
Cash 626,585
- -------------------------------------------------------------------------------------------
Income receivable 1,109,935
- -------------------------------------------------------------------------------------------
Deferred expenses 17,606
- ------------------------------------------------------------------------------------------- ------------
Total assets 143,087,116
- -------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------
Income distribution payable $352,766
- --------------------------------------------------------------------------------
Accrued expenses 90,463
- -------------------------------------------------------------------------------- --------
Total liabilities 443,229
- ------------------------------------------------------------------------------------------- ------------
NET ASSETS for 142,643,887 shares outstanding $142,643,887
- ------------------------------------------------------------------------------------------- ------------
------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share: ($142,643,887
DIVIDED BY 142,643,887 shares outstanding) $ 1.00
- ------------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
13
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------
Interest $2,965,320
- -----------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------
Investment advisory fee $362,540
- ------------------------------------------------------------
Administrative personnel and services fee 62,021
- ------------------------------------------------------------
Custodian fees 13,777
- ------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 7,251
- ------------------------------------------------------------
Directors'/Trustees' fees 1,267
- ------------------------------------------------------------
Auditing fees 7,964
- ------------------------------------------------------------
Legal fees 3,439
- ------------------------------------------------------------
Portfolio accounting fees 15,952
- ------------------------------------------------------------
Shareholder services fee 174,019
- ------------------------------------------------------------
Share registration costs 17,376
- ------------------------------------------------------------
Printing and postage 8,869
- ------------------------------------------------------------
Insurance premiums 3,258
- ------------------------------------------------------------
Miscellaneous 4,706
- ------------------------------------------------------------ --------
Total expenses 682,439
- ------------------------------------------------------------
Deduct--Waiver of investment advisory fee 342,299
- ------------------------------------------------------------ --------
Net expenses 340,140
- ----------------------------------------------------------------------- ----------
Net investment income $2,625,180
- ----------------------------------------------------------------------- ----------
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995 PERIOD ENDED
(UNAUDITED) OCTOBER 31, 1994(a)
---------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------
OPERATIONS--
- --------------------------------------------------
Net investment income $ 2,625,180 $ 1,301,466
- -------------------------------------------------- ---------------- -------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------
Distributions from net investment income (2,625,180) (1,301,466)
- -------------------------------------------------- ---------------- -------------------
SHARE TRANSACTIONS--
- --------------------------------------------------
Proceeds from sale of Shares 312,979,575 478,251,901
- --------------------------------------------------
Net asset value of Shares issued to shareholders
in payment of distributions declared 619,607 606,720
- --------------------------------------------------
Cost of Shares redeemed (313,759,156) (336,054,760)
- -------------------------------------------------- ---------------- -------------------
Change in net assets resulting from Share
transactions (159,974) 142,803,861
- -------------------------------------------------- ---------------- -------------------
Change in net assets (159,974) 142,803,861
- --------------------------------------------------
NET ASSETS:
- --------------------------------------------------
Beginning of period 142,803,861 --
- -------------------------------------------------- ---------------- -------------------
End of period $ 142,643,887 $ 142,803,861
- -------------------------------------------------- ---------------- -------------------
---------------- -------------------
<FN>
(a) For the period from November 29, 1993 (start of business) to October 31,
1994.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
15
ALABAMA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995 PERIOD ENDED
(UNAUDITED) OCTOBER 31, 1994(a)
---------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- -----------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------
Net investment income 0.02 0.02
- ----------------------------------------------------- -------- --------
LESS DISTRIBUTIONS
- -----------------------------------------------------
Distributions from net investment income (0.02) (0.02)
- ----------------------------------------------------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ----------------------------------------------------- -------- --------
-------- --------
TOTAL RETURN (b) 1.80% 2.31%
- -----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------
Expenses 0.47%(c) 0.36%(c)
- -----------------------------------------------------
Net investment income 3.62%(c) 2.67%(c)
- -----------------------------------------------------
Expense waiver/reimbursement (d) 0.47%(c) 0.62%(c)
- -----------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------
Net assets, end of period (000 omitted) $142,644 $142,804
- -----------------------------------------------------
<FN>
(a) Reflects operations for the period from December 3, 1993 (date of initial
public investment) to October 31, 1994. For the period from November 29,
1993 (start of business) to December 3, 1993 the Fund had no investment
activity.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
16
ALABAMA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present only those of Alabama 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.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutal fund that invests nationally. In order to reduce
the credit risk associated with such factors, at April 30, 1995, 74.0% 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 value of investments insured by or
supported (backed) by a letter of credit for any one institution or agency
does not exceed 8.1% of total investments.
17
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
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 not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
At April 30, 1995, capital paid-in aggregated $142,643,887. Transactions in
shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994(a)
- ---------------------------------------------------------------------- ------------------ -------------------
<S> <C> <C>
Shares sold 312,979,575 478,251,901
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 619,607 606,720
- ----------------------------------------------------------------------
Shares redeemed (313,759,156) (336,054,760)
- ---------------------------------------------------------------------- ------------------ -------------------
Net change resulting from share transactions (159,974) 142,803,861
- ---------------------------------------------------------------------- ------------------ -------------------
------------------ -------------------
<FN>
(a) For the period from November 29, 1993 (start of business) to October 31,
1994.
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain the shareholder accounts.
18
ALABAMA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records. This
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($26,461) and start-up
administrative service expenses ($31,250) were borne initially by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational and start-up
administrative expenses during the five year period following December 1, 1993
(date the Fund became effective). For the period ended April 30, 1995, the Fund
paid $3,381 and $3,993, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors'/Trustees', and/or common Officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$163,705,000 and $215,970,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
19
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the fund's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
20
- --------------------------------------------------------------------------------
ALABAMA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS -----------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779 -----------------------------------
[LOGO]
RECYCLED
PAPER
314229790
G01120-01 (6/95) -----------------------------------
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of North Carolina
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements.
North Carolina Municipal Cash Trust continues to seek relief for you and other
tax-sensitive North Carolina residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
North Carolina municipal securities, issued to fund projects as varied as
education, health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $1.7
million in total distributions to shareholders. As of this report, the fund's
total net assets are $108.1 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
*INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
JEFF A. KOZEMCHAK, CFA, VICE PRESIDENT & PORTFOLIO MANAGER
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995. On
November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield of the fund rose from
2.97% on November 1, 1994, to 3.98% on April 30, 1995*.
*PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. YIELD WILL VARY.
2
- --------------------------------------------------------------------------------
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A We added to the fund's holdings of short maturity commercial paper (CP) and
VRDNs in order to increase the responsiveness to changes in short-term
interest rates. VRDNs adjust quickly to changes in Fed policy as well as
supply and demand imbalances that are unique to the municipal money markets. The
purchase of CP typically allows us to pick up an additional yield premium over
VRDNs over time, while still retaining portfolio responsiveness to further rate
increases. Also, the average maturity of the fund was targeted within a range of
30 to 45 days, with an emphasis on the shorter end of the target range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become attractive versus comparable maturity taxable
securities.
3
NORTH CAROLINA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.4%
- ------------------------------------------------------------------------
NORTH CAROLINA--91.5%
------------------------------------------------------------
$1,755,000 Alamance County, NC, IDA Weekly VRDNs (Series B)/ (Culp,
Inc.)/(First Union National Bank LOC) P-1 $ 1,755,000
------------------------------------------------------------
4,000,000 Bladen County, NC, Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Series 1993)/(BCH Energy,
L.P.)/(Bank of Tokyo Ltd. LOC)/(Subject to AMT) VMIG1 4,000,000
------------------------------------------------------------
1,000,000 Bladen County, NC, Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Series 1993)/(Harriet &
Henderson Yarns, Inc.)/(NationsBank of North Carolina N.A.
LOC)/(Subject to AMT) A-1 1,000,000
------------------------------------------------------------
1,600,000 Buncombe County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series 1991)/(Rich
Mount, Inc.)/(Bank of Tokyo Ltd. LOC)/(Subject to AMT) A-1 1,600,000
------------------------------------------------------------
2,055,000 Burke County, NC, Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Norwalk Furniture Corp.,
Hickory Hill)/(Branch Banking & Trust Co. LOC)/(Subject to
AMT) P-1 2,055,000
------------------------------------------------------------
1,000,000 Catawba County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series
1992)/(WSMP, Inc.)/ (NationsBank of North Carolina N.A.
LOC)/(Subject to AMT) A-1 1,000,000
------------------------------------------------------------
4,600,000 Catawba County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series
1994)/(Ethan Allen, Inc.)/(Bankers Trust Co. LOC) P-1 4,600,000
------------------------------------------------------------
900,000 Charlotte, NC, COPs, 4.15% SB (Series 1994E)/(New Charlotte
Corp.)/(City of Charlotte Guaranty)/(Subject to AMT),
9/1/1995 AA 900,000
------------------------------------------------------------
4,115,000 Cleveland County, NC, IDA, IDRB Weekly VRDNs (Series
1990)/(MetalsAmerica, Inc.)/(NationsBank of North Carolina
N.A. LOC)/(Subject to AMT) P-1 4,115,000
------------------------------------------------------------
</TABLE>
4
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
------------------------------------------------------------
$1,000,000 Davidson County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series
1995)/(Lawrence Industries, Inc.)/(Branch Banking & Trust
Co. LOC)/(Subject to AMT) P-1 $ 1,000,000
------------------------------------------------------------
1,800,000 Guilford County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series
1989)/(Bonset America Corp.)/(Industrial Bank of Japan Ltd.
LOCs)/(Subject to AMT) A-1 1,800,000
------------------------------------------------------------
2,000,000 Guilford County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series
1989)/(Culp, Inc.)/ (Wachovia Bank of NC N.A. LOC)/(Subject
to AMT) P-1 2,000,000
------------------------------------------------------------
7,000,000 Halifax County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Flambeau Airmold
Corp.)/(Norwest Bank Minnesota LOC)/(Subject to AMT) P-1 7,000,000
------------------------------------------------------------
1,000,000 Iredell County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Jet Corr,
Inc.)/(National Bank of Canada LOC)/(Subject to AMT) P-1 1,000,000
------------------------------------------------------------
3,400,000 Lee County, NC, Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Series 1989)/(Avondale
Mills, Inc.)/(Trust Company Bank LOC) P-1 3,400,000
------------------------------------------------------------
3,000,000 Lincoln County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Leucadia,
Inc.)/(National Bank of Canada LOC)/(Subject to AMT) P-1 3,000,000
------------------------------------------------------------
2,000,000 Mecklenberg County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Manhasset Bay
Associates)/(Bank of Tokyo Ltd. LOC)/(Subject to AMT) A-1 2,000,000
------------------------------------------------------------
1,000,000 New Hanover County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Efson, Inc.)/
(Branch Banking & Trust Co. LOC)/(Subject to AMT) P-1 1,000,000
------------------------------------------------------------
4,000,000 North Carolina Eastern Municipal Power Agency, 4.10% CP
(Industrial Bank of Japan Ltd. LOC), Mandatory Tender
6/8/1995 P-1 4,000,000
------------------------------------------------------------
</TABLE>
5
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
------------------------------------------------------------
$1,000,000 North Carolina Eastern Municipal Power Agency, 4.10% CP
(Series 1988)/(Morgan Guaranty Trust Co. and Union Bank of
Switzerland LOCs), Mandatory Tender 5/16/1995 NR $ 1,000,000
------------------------------------------------------------
2,718,000 North Carolina Eastern Municipal Power Agency, 4.15% CP
(Industrial Bank of Japan Ltd. LOC), Mandatory Tender
6/12/1995 A-1 2,718,000
------------------------------------------------------------
1,000,000 North Carolina Eastern Municipal Power Agency, 4.20% CP
(Series 1988)/(Morgan Guaranty Trust Co. and Union Bank of
Switzerland LOCs), Mandatory Tender 6/14/1995 A-1+ 1,000,000
------------------------------------------------------------
1,162,000 North Carolina Eastern Municipal Power Agency, 4.25% CP
(Industrial Bank of Japan Ltd. LOC), Mandatory Tender
5/22/1995 A-1 1,162,000
------------------------------------------------------------
1,500,000 North Carolina Educational Facilities Financing Agency
Weekly VRDNs (Series 1990)/(Bowman Gray School of Medicine)/
(Wachovia Bank of NC N.A. LOC) VMIG1 1,500,000
------------------------------------------------------------
900,000 North Carolina Medical Care Commission Hospital Revenue
Weekly VRDNs (Series 1993)/(Moses H. Cone Memorial Hospital) A-1+ 900,000
------------------------------------------------------------
2,520,000 North Carolina Municipal Power Agency #1, 4.20% CP,
Mandatory Tender 5/31/1995 A-1 2,520,000
------------------------------------------------------------
2,875,000 North Carolina Municipal Power Agency #1, 9.00% SB
(Prerefunded), Mandatory Tender 1/1/1996 @102 AAA 3,009,556
------------------------------------------------------------
500,000 Onslow County, NC, Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Mine Safety Appliances
Co.)/(Sanwa Bank Ltd. LOC) A-1+ 500,000
------------------------------------------------------------
4,240,000 Orange County, NC, Industrial Facilities & Pollution Control
Financing Authority Weekly VRDNs (Mebane Packaging
Corp.)/(First Union National Bank LOC)/(Subject to AMT) A-1+ 4,240,000
------------------------------------------------------------
1,400,000 Piedmont Triad Airport Authority Weekly VRDNs (Triad
International Maintenance Corp.)/(Mellon Bank N.A. LOC)/
(Subject to AMT) P-1 1,400,000
------------------------------------------------------------
</TABLE>
6
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
------------------------------------------------------------
$2,200,000 Randolph County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series
1990)/(Wayne Steel, Inc.)/(Bank One, Akron LOC)/(Subject to
AMT) P-1 $ 2,200,000
------------------------------------------------------------
4,000,000 Richmond County, NC, Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Series 1991)/(Bibb
Company)/(Citibank N.A. LOC)/(Subject to AMT) A-1 4,000,000
------------------------------------------------------------
2,800,000 Rutherford County, NC, Industrial Facilities Pollution
Control Financing Authority Weekly VRDNs (Spring-Ford
Knitting Co.)/(Branch Banking & Trust Co. LOC)/(Subject to
AMT) P-1 2,800,000
------------------------------------------------------------
2,750,000 University of North Carolina, 4.65% CP (Series 1989)/
(University of NC at Chapel Hill)/(Credit Suisse LOC),
Mandatory Tender 5/5/1995 VMIG1 2,750,000
------------------------------------------------------------
1,000,000 University of North Carolina, 5.80% Utilities Systems
Refunding Revenue Bonds (Series 1993)/(University of NC at
Chapel Hill), 8/1/1995 AA 1,003,333
------------------------------------------------------------
4,000,000 University of North Carolina, School of Medicine Ambulatory
Care Clinic, 4.65% CP (Series 1990)/(University of NC at
Chapel Hill), Mandatory Tender 5/9/1995 A-1+ 4,000,000
------------------------------------------------------------
4,000,000 Wake County, NC, Industrial Facilities & Pollution Control
Financing Authority, 4.10% CP (Series 1990B)/(Carolina Power
& Light Company)/(Fuji Bank Ltd. LOC), Mandatory Tender
5/22/1995 A-1 4,000,000
------------------------------------------------------------
3,000,000 Wake County, NC, Industrial Facilities & Pollution Control
Financing Authority, 4.10% CP (Series 1990B)/(Carolina Power
& Light Company)/(Fuji Bank Ltd. LOC), Mandatory Tender
7/20/1995 A-1 3,000,000
------------------------------------------------------------
1,000,000 Wake County, NC, Industrial Facilities & Pollution Control
Financing Authority, 4.125% CP (Series 1990A)/(Carolina
Power & Light Company)/(Fuji Bank Ltd. LOC), Mandatory
Tender 5/30/1995 A-1 1,000,000
------------------------------------------------------------
4,485,362 Wayne County, NC, Pollution Control Financing Authority
Weekly VRDNs (Cooper Industries, Inc.)/(Sanwa Bank Ltd. LOC) A-1+ 4,485,362
------------------------------------------------------------
</TABLE>
7
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------------ ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
------------------------------------------------------------
$2,500,000 Wilson County, NC, PCA, IDRB Weekly VRDNs (Series 1994)/
(Granutec, Inc.)/(Branch Banking & Trust Co. LOC)/(Subject
to AMT) P-1 $ 2,500,000
------------------------------------------------------------ ------------
Total 98,913,251
------------------------------------------------------------ ------------
PUERTO RICO--2.8%
------------------------------------------------------------
3,000,000 Puerto Rico Industrial, Medical & Environmental PCA, 4.00%
Annual TOBs (Series 1983A)/(Reynolds Metals Co.)/(ABN AMRO
Bank N.A. LOC), Optional Tender 9/1/1995 VMIG1 3,000,981
------------------------------------------------------------ ------------
VIRGIN ISLANDS--5.1%
------------------------------------------------------------
3,000,000 Virgin Islands, HFA, 5.00% Semi-Annual TOBs Home Mortgage
Revenue Bonds (Series 1994B)/(FGIC Capital Markets Services
Investment Agreement)/(Subject to AMT), Mandatory Tender
5/1/1995 SP-1+ 3,000,000
------------------------------------------------------------
2,500,000 Virgin Islands, HFA Single Family Mortgage Revenue Bonds,
4.375% Annual TOBs (Series 1995B)/(FGIC Insured)/(Subject to
AMT), Optional Tender 2/1/1996 A-1+ 2,500,000
------------------------------------------------------------ ------------
Total 5,500,000
------------------------------------------------------------ ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (a) $107,414,232
------------------------------------------------------------ ------------
------------
<FN>
(a) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 10.
Note: The categories of investments are shown as a percentage of net assets
($108,106,331) at April 30, 1995.
</TABLE>
8
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
The following abbreviations are used throughout this portfolio:
<TABLE>
<S> <C>
AMT --Alternative Minimum Tax
COPs --Certificates of Participation
CP --Commercial Paper
FGIC --Financial Guaranty Insurance Company
HFA --Housing Finance Authority /Agency
IDA --Industrial Development Authority
IDRB --Industrial Development Revenue Bonds
LOCs --Letter(s) of Credit
LOC --Letter of Credit
PCA --Pollution Control Authority
SB --Serial Bond
TOBs --Tender Option Bonds
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements.)
9
NORTH CAROLINA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1--This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2--This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNs)
AND
TENDER OPTION BONDS (TOBs)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
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
10
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
VMIG rating can be assigned a 1 or 2 designation using the same definitions
described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1--This highest category designation indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1--Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.
P-2--Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
11
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA--Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized 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 which
suggest a susceptibility to impairment sometime in the future.
NR--indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
12
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $107,414,232
- -----------------------------------------------------------------------------------------
Cash 198,796
- -----------------------------------------------------------------------------------------
Income receivable 619,922
- -----------------------------------------------------------------------------------------
Deferred expenses 28,193
- ----------------------------------------------------------------------------------------- ------------
Total assets 108,261,143
- -----------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------
Payable for shares redeemed $22,880
- --------------------------------------------------------------------------------
Income distribution payable 96,225
- --------------------------------------------------------------------------------
Accrued expenses 35,707
- -------------------------------------------------------------------------------- -------
Total liabilities 154,812
- ----------------------------------------------------------------------------------------- ------------
NET ASSETS for 108,106,331 shares outstanding $108,106,331
- ----------------------------------------------------------------------------------------- ------------
------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share: ($108,106,331
DIVIDED BY 108,106,331 shares outstanding) $ 1.00
- ----------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
13
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest $2,019,193
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $250,462
- -----------------------------------------------------------------------
Administrative personnel and services fee 61,987
- -----------------------------------------------------------------------
Custodian fees 13,840
- -----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 9,975
- -----------------------------------------------------------------------
Directors'/Trustees' fees 1,267
- -----------------------------------------------------------------------
Auditing fees 6,761
- -----------------------------------------------------------------------
Legal fees 664
- -----------------------------------------------------------------------
Portfolio accounting fees 21,256
- -----------------------------------------------------------------------
Shareholder services fee 125,231
- -----------------------------------------------------------------------
Share registration costs 15,931
- -----------------------------------------------------------------------
Printing and postage 4,405
- -----------------------------------------------------------------------
Insurance premiums 2,504
- -----------------------------------------------------------------------
Miscellaneous 4,496
- ----------------------------------------------------------------------- --------
Total expenses 518,779
- -----------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 223,234
- ----------------------------------------------------------------------- --------
Net expenses 295,545
- ---------------------------------------------------------------------------------- ----------
Net investment income $1,723,648
- ---------------------------------------------------------------------------------- ----------
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994(A)(a)
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------
OPERATIONS--
- --------------------------------------------------
Net investment income $ 1,723,648 $ 1,501,904
- -------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------
Distributions from net investment income (1,723,648) (1,501,904)
- -------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- --------------------------------------------------
Proceeds from sale of Shares 478,243,657 539,042,342
- --------------------------------------------------
Net asset value of Shares issued to shareholders
in payment of distributions declared 1,114,090 1,065,423
- --------------------------------------------------
Cost of Shares redeemed (456,500,436) (454,858,745)
- -------------------------------------------------- --------------- ---------------
Change in net assets resulting from Share
transactions 22,857,311 85,249,020
- -------------------------------------------------- --------------- ---------------
Change in net assets 22,857,311 85,249,020
- --------------------------------------------------
NET ASSETS:
- --------------------------------------------------
Beginning of period 85,249,020 --
- -------------------------------------------------- --------------- ---------------
End of period $ 108,106,331 $ 85,249,020
- -------------------------------------------------- --------------- ---------------
--------------- ---------------
<FN>
(a) For the period from November 29, 1993 (start of business) to October 31,
1994.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
15
NORTH CAROLINA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994(A)(a)
------------------ --------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ----------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------
Net investment income 0.02 0.02
- ----------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------
Distributions from net investment income (0.02) (0.02)
- ---------------------------------------------------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ---------------------------------------------------- -------- -------
-------- -------
TOTAL RETURN (b) 1.71% 2.06%
- ----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------
Expenses 0.59%(c) 0.49%(c)
- ----------------------------------------------------
Net investment income 3.44%(c) 2.54%(c)
- ----------------------------------------------------
Expense waiver/reimbursement (d) 0.45%(c) 0.44%(c)
- ----------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------
Net assets, end of period (000 omitted) $ 108,106 $ 85,249
- ----------------------------------------------------
<FN>
(a) Reflects operations for the period from December 31, 1993 (date of initial
public investment) to October 31, 1994. For the period from November 29,
1993 (start of business) to December 31, 1993, the Fund had no investment
activity.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
16
NORTH CAROLINA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present only those of North Carolina
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.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF RISK--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
tax-exempt mutual fund that invests nationally. In order to reduce the
credit risk associated with such factors, at April 30, 1995, 89.4% 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 value of investments insured by or supported
(backed) by a letter of credit for any one institution or agency does not
exceed 9.0% of total investments.
17
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
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 not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the "Trustees") to issue
an unlimited number of full and fractional shares of beneficial interest
(without par value). At April 30, 1995, capital paid-in aggregated $108,106,331.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31, 1994(a)
- ---------------------------------------------------------------------- ------------------ -------------------
<S> <C> <C>
Shares sold 478,243,657 539,042,342
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,114,090 1,065,423
- ----------------------------------------------------------------------
Shares redeemed (456,500,436) (454,858,745)
- ---------------------------------------------------------------------- ------------------ -------------------
Net change resulting from share transactions 22,857,311 85,249,020
- ---------------------------------------------------------------------- ------------------ -------------------
------------------ -------------------
<FN>
(a) For the period from November 29, 1993 (start of business) to October 31,
1994.
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain the shareholder accounts.
18
NORTH CAROLINA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $21,879 and start-up
administrative service expenses of $31,507 were initially borne by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following December
1, 1993 (the date the Fund became effective). For the period ended April 30,
1995, the Fund paid $2,796 and $4,026, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six-months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated advisers), common Directors/Trustees, and/or
common Officers. These transactions were made at current market value pursuant
to Rule 17a-7 under the Act amounting to $223,473,800 and $203,310,000,
respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
19
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the fund's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
20
- --------------------------------------------------------------------------------
NORTH
- --------------------------------------------------------------------------------
CAROLINA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS -----------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779 -----------------------------------
[LOGO]
RECYCLED
PAPER
314229782
G01177-01 (6/95) -----------------------------------
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Maryland
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements.
Maryland Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Maryland residents, in the form of triple tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
Maryland municipal securities, issued to fund projects as varied as education,
health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $0.9
million in total distributions to shareholders. As of this report, the fund's
total net assets are $53.2 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX. INCOME EARNED IS
FREE FROM VARIOUS MARYLAND COUNTY INCOME TAXES.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
AN INTERVIEW WITH THE FUND'S PORTFOLIO MANAGER, JEFF A. KOZEMCHAK
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A
In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995. On
November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield* of the fund rose from
2.86% on November 1, 1994, to 3.83% on April 30, 1995.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. YIELD WILL VARY.
2
- --------------------------------------------------------------------------------
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A We continued to fully utilize both short maturity commercial paper (CP) and
VRDNs in order to maintain the responsiveness of the portfolio to changes in
short-term interest rates. VRDNs adjust quickly to changes in Fed policy as
well as supply and demand imbalances that are unique to the municipal money
markets. The purchase of CP typically allows us to pick up an additional yield
premium over VRDNs over time while still retaining portfolio responsiveness to
further rate increases. Also, because of tight supply conditions, the average
maturity of the fund was targeted within a range of 30 to 50 days, with an
emphasis on the shorter end of the target range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become attractive versus comparable maturity taxable
securities.
3
MARYLAND MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- -----------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--98.4%
- -----------------------------------------------------------------------------
MARYLAND--92.0%
-----------------------------------------------------------------
$2,000,000 Anne Arundel County, MD, EDRB, 4.15% CP (Baltimore Gas & Electric
Co. Guaranty)/(Subject to AMT), Mandatory Tendor 5/11/1995 A-1 $ 2,000,000
-----------------------------------------------------------------
1,000,000 Anne Arundel County, MD, EDRB, 4.25% CP (Baltimore Gas & Electric
Co. Guaranty), Mandatory Tender 7/19/1995 A-1 1,000,000
-----------------------------------------------------------------
2,000,000 Anne Arundel County, MD, EDRB, 4.25% CP (Series 1988)/ (Baltimore
Gas & Electric Co.)/(Subject to AMT), Mandatory Tender 7/18/1995 A-1 2,000,000
-----------------------------------------------------------------
2,100,000 Baltimore County, MD, Port Facility Monthly VRDNs (Occidental
Petroleum Corp.)/(National Westminster Bank, PLC LOC) A-1+ 2,100,000
-----------------------------------------------------------------
1,000,000 Baltimore County, MD, Weekly VRDNs (Series 1992)/ (Sheppard &
Enoch Pratt Hospital Facility)/(Societe Generale LOC) VMIG1 1,000,000
-----------------------------------------------------------------
2,000,000 Baltimore County, MD, Weekly VRDNs (Series 1994)/(Direct
Marketing Associates, Inc. Facility)/(First National Bank of
Maryland, Baltimore LOC)/(Subject to AMT) A-1 2,000,000
-----------------------------------------------------------------
3,000,000(a) Baltimore County, MD, Weekly VRDNs (Series 20 Putters)/ (Morgan
Guaranty Trust Co. BPA) VMIG1 3,000,000
-----------------------------------------------------------------
2,000,000 Baltimore, MD, 5.00% Highway User RANs (Series 1994), 6/9/1995 SP-1+ 2,001,812
-----------------------------------------------------------------
2,000,000 Baltimore, MD, PCR Weekly VRDNs (SCM Plants, Inc.)/ (Barclays
Bank, PLC LOC) A-1+ 2,000,000
-----------------------------------------------------------------
1,500,000 Cecil County, MD, County Commissioners EDRB Weekly VRDNs (Series
1988S)/(Williams Mobile Offices, Inc.)/(First National Bank of
Maryland LOC)/(Subject to AMT) A-1 1,500,000
-----------------------------------------------------------------
995,000 Elkton, MD, Weekly VRDNs (Series 1992S)/(Highway Service
Ventures, Inc. Facility)/(First Union Bank, Charlotte LOC) A-1 995,000
-----------------------------------------------------------------
</TABLE>
4
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- -----------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -----------------------------------------------------------------------------
MARYLAND--CONTINUED
-----------------------------------------------------------------
$3,141,000 Hartford County, MD, Weekly VRDNs (Series 1989)/(Hartford Commons
Associates Facility)/(Nationsbank of Virginia N.A. LOC)/(Subject
to AMT) P-1 $ 3,141,000
-----------------------------------------------------------------
2,800,000 Maryland State CDA Weekly VRDNs (Series 1990B)/(Cherry Hill
Apartment Ltd.)/(Nationsbank of Maryland LOC)/(Subject to AMT) P-1 2,800,000
-----------------------------------------------------------------
500,000 Maryland State Department of Transportation, 7.10% SB (Pre-
refunded in U.S. Treasuries, 8/1/1995 @102) NR(1) 513,452
-----------------------------------------------------------------
3,000,000 Maryland State Energy Financing Administration IDRB Weekly VRDNs
(Series 1988)/(Morningstar Foods, Inc.)/(Long Term Credit Bank of
Japan Ltd. LOC)/(Subject to AMT) A-2 3,000,000
-----------------------------------------------------------------
1,000,000 Maryland State HEFA Weekly VRDNs (Series 1985B)/(Pooled Loan
Program)/(Sanwa Bank Ltd. LOC) VMIG1 1,000,000
-----------------------------------------------------------------
2,000,000 Maryland State HEFA Weekly VRDNs Revenue Bonds (Series
1985A)/(Dai-Ichi Kangyo Bank Ltd. LOC) VMIG1 2,000,000
-----------------------------------------------------------------
1,000,000 Maryland State HEFA Weekly VRDNs Revenue Bonds (Series
1992B)/(North Arundel Hospital)/(Mellon Bank N.A. LOC) VMIG1 1,000,000
-----------------------------------------------------------------
3,245,000 Maryland State HEFA, 9.25% Pre-Refunded Bonds (Series
1985A)/(John Hopkins University), 7/1/1995 AAA 3,339,099
-----------------------------------------------------------------
2,000,000 Maryland State HEFA, ACES Weekly VRDNs Revenue Bonds (Series
1994)/(Daughters of Charity Guaranty) VMIG1 2,000,000
-----------------------------------------------------------------
2,300,000 Montgomery County, MD, EDA Weekly VRDNs (U.S. Pharmacopeial
Convention Facility)/(Chemical Bank LOC) VMIG1 2,300,000
-----------------------------------------------------------------
2,000,000 Montgomery County, MD, Housing Opportunities Commission SFM,
4.35% Annual TOBs (Series 1994C), Optional Tender 10/25/1995 VMIG1 2,000,000
-----------------------------------------------------------------
2,000,000 Montgomery County, MD, Multi-Family Weekly VRDNs (Series
1991A)/(South Bay Club Apartments - Van Nuys, G.P.)/ (General
Electric Capital Corp. LOC) A-1+ 2,000,000
-----------------------------------------------------------------
</TABLE>
5
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- -----------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -----------------------------------------------------------------------------
MARYLAND--CONTINUED
-----------------------------------------------------------------
$2,000,000 University of Maryland, Revolving Equipment Loan Program Weekly
VRDNs (Series A)/(Student Loan Marketing Association LIQ) A-1+ $ 2,000,000
-----------------------------------------------------------------
2,260,000 Wicomico County, MD, EDRB Weekly VRDNs (Series 1994)/ (Field
Container Co. L.P.)/(Northern Trust Co. LOC)/(Subject to AMT) SP-1+ 2,260,000
----------------------------------------------------------------- -----------
Total 48,950,363
----------------------------------------------------------------- -----------
PUERTO RICO--2.6%
-----------------------------------------------------------------
1,400,000 Puerto Rico Industrial, Medical & Environmental PCA, 4.00% Annual
TOBs (Series 1983A)/(Reynolds Metals Co.)/(ABN AMRO Bank N.A.
LOC), Optional Tender 9/1/1995 VMIG1 1,400,457
----------------------------------------------------------------- -----------
VIRGIN ISLANDS--3.8%
-----------------------------------------------------------------
2,000,000 Virgin Islands, HFA Single Family Mortgage Revenue Bonds, 4.375%
Annual TOBs (Series 1995B)/(FGIC Insured)/(Subject to AMT),
Optional Tender 2/1/1996 A-1+ 2,000,000
----------------------------------------------------------------- -----------
TOTAL INVESTMENTS, AT AMORTIZED COST (b) $52,350,820
----------------------------------------------------------------- -----------
-----------
<FN>
* See Notes to Portfolio of Investments on page 8.
(a) Denotes restricted securities which are subject to resale under Federal
Securities laws. These securities have been determined to be liquid under
criteria established by the Board of Trustees.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($53,211,991) at April 30, 1995.
</TABLE>
6
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
The following abbreviations are used throughout this portfolio:
<TABLE>
<S> <C>
ACES --Adjustable Convertible Extendable Securities
AMT --Alternative Minimum Tax
BPA --Bond Purchase Agreement
CP --Commercial Paper
CDA --Community Development Administration
EDA --Economic Development Authority
EDRB --Economic Development Revenue Bonds
FGIC --Financial Guaranty Insurance Company
HEFA --Health and Education Facilities Authority
HFA --Housing Finance Authority/Agency
IDRB --Industrial Development Revenue Bonds
LIQ --Liquidity Agreement
LOC --Letter of Credit
PCA --Pollution Control Authority
PCR --Pollution Control Revenue
PLC --Public Limited Company
RANs --Revenue Anticipation Notes
SB --Serial Bond
SFM --Single Family Mortgage
TOBs --Tender Option Bonds
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
7
MARYLAND MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1--This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2--This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNs)
AND
TENDER OPTION BONDS (TOBs)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
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
8
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
VMIG rating can be assigned a 1 or 2 designation using the same definitions
described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1--Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.
P-2--Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA--Debt rated "AAA" has the highest rating assigned by S&P. 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.
9
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
MOODY'S INVESTORS SERVICES, INC.
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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized 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 which
suggest a susceptibility to impairment sometime in the future.
NR--indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
10
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $52,350,820
- ------------------------------------------------------------------------------------------
Cash 476,859
- ------------------------------------------------------------------------------------------
Income receivable 433,858
- ------------------------------------------------------------------------------------------
Receivable for shares sold 3,500
- ------------------------------------------------------------------------------------------
Deferred expenses 16,280
- ------------------------------------------------------------------------------------------ -----------
Total assets 53,281,317
- ------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------
Income distribution payable $13,346
- --------------------------------------------------------------------------------
Accrued expenses 55,980
- -------------------------------------------------------------------------------- -------
Total liabilities 69,326
- ------------------------------------------------------------------------------------------ -----------
NET ASSETS for 53,211,991 shares outstanding $53,211,991
- ------------------------------------------------------------------------------------------ -----------
-----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($53,211,991 DIVIDED BY 53,211,991 shares outstanding) $ 1.00
- ------------------------------------------------------------------------------------------ -----------
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
11
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest $1,123,449
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $141,776
- -----------------------------------------------------------------------
Administrative personnel and services fee 61,987
- -----------------------------------------------------------------------
Custodian fees 10,204
- -----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 7,345
- -----------------------------------------------------------------------
Directors'/Trustees' fees 895
- -----------------------------------------------------------------------
Auditing fees 7,876
- -----------------------------------------------------------------------
Legal fees 2,540
- -----------------------------------------------------------------------
Portfolio accounting fees 15,645
- -----------------------------------------------------------------------
Shareholder services fee 69,924
- -----------------------------------------------------------------------
Share registration costs 15,257
- -----------------------------------------------------------------------
Printing and postage 5,975
- -----------------------------------------------------------------------
Insurance premiums 2,751
- -----------------------------------------------------------------------
Miscellaneous 3,789
- ----------------------------------------------------------------------- --------
Total expenses 345,964
- -----------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------
Waiver of investment advisory fee $141,776
- ------------------------------------------------------------
Reimbursement of other operating expenses by adviser 19,880 161,656
- ------------------------------------------------------------ -------- --------
Net expenses 184,308
- ---------------------------------------------------------------------------------- ----------
Net investment income $ 939,141
- ---------------------------------------------------------------------------------- ----------
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
12
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL
30, 1995 PERIOD ENDED
(UNAUDITED) OCTOBER 31, 1994(a)
-------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------
Net investment income $ 939,141 $ 735,164
- --------------------------------------------------------------------------- -------------- -------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------
Distributions from net investment income (939,141) (735,164)
- --------------------------------------------------------------------------- -------------- -------------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------------------
Proceeds from sale of Shares 107,270,010 231,266,672
- ---------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 863,890 596,061
- ---------------------------------------------------------------------------
Cost of Shares redeemed (111,197,148) (175,587,494)
- --------------------------------------------------------------------------- -------------- -------------------
Change in net assets resulting from Share transactions (3,063,248) 56,275,239
- --------------------------------------------------------------------------- -------------- -------------------
Change in net assets (3,063,248) 56,275,239
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period 56,275,239 0
- --------------------------------------------------------------------------- -------------- -------------------
End of period $ 53,211,991 $ 56,275,239
- --------------------------------------------------------------------------- -------------- -------------------
-------------- -------------------
<FN>
(a) For the period from April 25, 1994 (start of business) to October 31, 1994.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
13
MARYLAND MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995 PERIOD ENDED
(UNAUDITED) OCTOBER 31, 1994(a)
---------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.02 0.01
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Distributions from net investment income (0.02) (0.01)
- ---------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ---------------------------------------------------------------------- ------- -------
------- -------
TOTAL RETURN (b) 1.66% 1.30%
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 0.65%(c) 0.46%(c)
- ----------------------------------------------------------------------
Net investment income 3.31%(c) 2.68%(c)
- ----------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.57%(c) 0.53%(c)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $53,212 $56,275
- ----------------------------------------------------------------------
<FN>
(a) Reflects operations for the period from May 9, 1994 (date of initial public
investment) to October 31, 1994. For the period from April 25, 1994 (start
of business) to May 9, 1994, the Fund had no investment activity.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
MARYLAND MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present only those of Maryland
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.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions
exempt from such registration. Many restricted securities may be resold in
the secondary market in transactions exempt from registration. In some
cases, the restricted securities may be resold without registration upon
exercise of a demand feature. Such restricted securities may be determined
to be liquid under criteria established by the Board of Trustees ("the
Trustees"). The Fund will not incur any registration costs upon such
resales. Restricted securities are valued at amortized cost in
15
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
accordance with Rule 2a-7 under the Act. Additional information on each
restricted security held at April 30, 1995 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
- ------------------------------------ ---------------- ----------------
<S> <C> <C>
Baltimore County, MD, Weekly VRDNs
(Series 20 Putters) 8/11/94 $3,000,000
</TABLE>
CONCENTRATION OF RISK--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
tax-exempt mutual fund that invests nationally. In order to reduce the
credit risk associated with such factors, at April 30, 1995, 71.6% 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 value of investments insured by or supported
(backed) by a letter of credit for any one institution or agency does not
exceed 6.7% of total investments.
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 its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
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, 1995, capital paid-in aggregated $53,211,991. Transactions in shares were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS PERIOD ENDED
ENDED APRIL OCTOBER 31,
30, 1995 1994*
- ---------------------------------------------------- ------------- -------------
<S> <C> <C>
Shares sold 107,270,010 231,266,672
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 863,890 596,061
- ----------------------------------------------------
Shares redeemed (111,197,148) (175,587,494)
- ---------------------------------------------------- ------------- -------------
Net change resulting from share transactions (3,063,248) 56,275,239
- ---------------------------------------------------- ------------- -------------
------------- -------------
<FN>
* For the period from April 25, 1994 (start of business) to October 31, 1994.
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average
16
MARYLAND MUNICIPAL CASH TRUST
- ---------------------------------------------------------
daily net assets. The Adviser may voluntarily choose to waive its fee and
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain the shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $14,426 and start-up
administrative service expenses of $31,506 were borne initially by Adviser. The
Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following May 4,
1994 (the date the Fund became effective). For the period ended April 30, 1995,
the Fund paid $1,523 and $3,326, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors'/Trustees', and/or common Officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$73,360,000 and $77,875,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
17
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the fund's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
18
- --------------------------------------------------------------------------------
MARYLAND
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS ----------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779[LOGO] ----------------------------------
RECYCLED
PAPER
314229774
G01175-01 (6/95) -----------------------------------
CALIFORNIA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of Federated Investors
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229766
0441609 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of California
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995.
We begin this report with our customary update from the fund's portfolio
manager, Mary Jo Ochson, who will discuss market activity and changes in the
fund's strategy relative to that activity. Mary Jo's report is followed by the
fund's Portfolio of Investments and Financial Statements.
California Municipal Cash Trust continues to seek relief for you and other
tax-sensitive California residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
California municipal securities, issued to fund projects as varied as education,
health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $1.5
million in total distributions to shareholders. As of this report, the fund's
total net assets are $93.6 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
*Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Mary Jo Ochson
Q Mary Jo, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from its high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations, regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield of the fund rose from
2.83% on November 1, 1994, to 3.73% on April 30, 1995.*
Q What was your strategy during the reporting period?
A Early in the reporting period, the fund's average maturity was targeted
within a range of 55-65 days, with an emphasis on the longer end of our
target. We extended the average maturity to a period high of 62 days in
late December, 1994, by purchasing fixed-rate securities. The yields on these
instruments were attractive, reflecting both market expectations of several more
hikes in interest rates by the Fed and concerns over the Orange County
bankruptcy filing. Since then, we have been targeting a slightly shorter average
maturity range of 40-50 days. The yield environment for California exempt
fixed-rate paper should be fairly attractive again this summer due to the
issuance of a large supply of cash flow financings from California
municipalities. If credit worthy opportunities become available, we plan to
again extend the average maturity to the 50-60 day range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will be neutral in the near term, as the Fed scrutinizes
upcoming releases on the economy and inflation for signs that either one is
stronger than expectations. Short-term interest rates should trade within a
range in the near future. Nevertheless, we expect the supply of fixed-rate notes
in our market to increase significantly starting in mid-June, 1995, cheapening
note levels. We plan, on average, to extend the average maturity of the fund
during this period of heavy issuance as yields on fixed-rate notes may become
attractive versus comparable maturity taxable securities.
Q What is the outlook for California's economy?
A The outlook for California's economy appears to be mildly positive as it
continues to show signs that it has rebounded from its 1990-1993 recession.
The number of people employed in the state increased by 19,000 in 1994,
after three consecutive years of declines which totaled over 600,000. The
statewide unemployment rate, which peaked at 10.1% in January, 1994, dropped
sharply to 8.2% by January, 1995, and declined further to 7.6% in March, 1995.
Retail sales data, another positive sign, show increases since mid-1993 after a
sharp decline in 1991 and erratic
* Past performance does not guarantee future results. Yield will vary.
performance in 1992. Finally, housing permits increased 14% in 1994 after
declining 67% between 1988 and 1993.
There are a number of reasons for the state's economic recovery: the generally
strong performance of the national economy; increased building activity as a
result of the earthquake in Southern California; several years of pent-up
consumer demand; and some significant public works projects such as the San
Joaquin Toll Road, which provided employment opportunities for construction
work.
A few weaknesses remain. There may be further job cutbacks at defense
contracting firms. Also, the economies of the countries with whom California
businesses do a great deal of trade, such as Japan and Mexico, are experiencing
slowdowns. Nevertheless, the size and diversity of California's economy, along
with increased economic activity and the recent sharp decline in interest rates,
suggest a positive outlook for the state.
CALIFORNIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ---------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--98.4%
- ------------------------------------------------------------------------------------
CALIFORNIA--98.4%
----------------------------------------------------------------------
$ 1,945,000 California Health Facilities Authority Weekly VRDNs (O'Connor Hospital
and St. Vincent's Medical Center, Inc.)/ (Daughters of Charity Health
System Guaranty) VMIG1 $ 1,945,000
----------------------------------------------------------------------
200,000 California Health Facilities Authority Weekly VRDNs (Santa Barbara
Hospital)/(Credit Suisse LOC) VMIG1 200,000
----------------------------------------------------------------------
1,100,000 California Health Facilities Finance Authority Weekly VRDNs (Pooled
Loan Program)/(FGIC Insured) VMIG1 1,100,000
----------------------------------------------------------------------
2,000,000 California HFA Multi-Unit Rental Housing, 4.20% TOBs (Custody
Receipts)/(MBIA Insured)/(Citibank BPA), Optional Tender 5/1/1995 NR(1) 2,000,000
----------------------------------------------------------------------
3,000,000 California Pollution Control Finance Authority, 4.10% CP (Series
1988E)/(Pacific Gas & Electric Co.)/(Morgan Guaranty Trust Co. LOC),
Mandatory Tender 5/30/1995 A-1+ 3,000,000
----------------------------------------------------------------------
3,000,000 California Pollution Control Finance Authority, 4.15% CP (Series
D)/(Southern California Edison Co.), Mandatory Tender 5/31/1995 A-1 3,000,000
----------------------------------------------------------------------
3,000,000 California School Cash Reserve Program Authority, 4.50% TRANs (Series
1994A)/(Industrial Bank of Japan Ltd. LOC), 6/28/1995 MIG1 3,002,984
----------------------------------------------------------------------
4,000,000 California State Monthly VRNs (Series C) SP-1+ 4,000,000
----------------------------------------------------------------------
5,000,000 California State Revenue Anticipation Warrants, 5.75% RANs (Series
C)/(Toronto-Dominion Bank, Bank of Nova Scotia, Banque Nationale de
Paris, Canadian Imperial Bank of Commerce, Chemical Bank, Citibank,
N.A., Credit Suisse, Morgan Guaranty Trust Co., National Westminister
Bank, PLC, Societe General North America, Inc., Sumitomo Bank Ltd.,
Swiss Bank Corp., New York, Westdeutsche Landesbank, Bank of America
NT & SA LOCs), 4/25/1996 SP-1 5,043,245
----------------------------------------------------------------------
2,000,000 California State 5.00% RANs (Series A) 6/28/1995 SP-1+ 2,002,493
----------------------------------------------------------------------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ -------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
CALIFORNIA--CONTINUED
----------------------------------------------------------------------
$ 1,000,000 California State, 8.50% Bond, 11/1/1995 NR(3) $ 1,017,968
----------------------------------------------------------------------
4,200,000 California Statewide Communities Development Authority, Weekly VRDNs
(Series A)/(Barton Memorial Hospital)/ (Banque Nationale de Paris LOC) VMIG1 4,200,000
----------------------------------------------------------------------
4,400,000 California, Pollution Control Finance Authority Weekly VRDNs (Series
1991)/(North County, CA Recycling & Energy Recovery)/(Union Bank of
Switzerland LOC) A-1+ 4,400,000
----------------------------------------------------------------------
1,000,000 Golden Empire Schools Financing Authority Weekly VRDNs (Kern High
School District)/(Barclays Bank PLC, LOC) A-1+ 1,000,000
----------------------------------------------------------------------
1,000,000 Golden Empire Schools Financing Authority Weekly VRDNs (Series
B)/(Kern High School District)/(Barclays Bank PLC, LOC) A-1+ 1,000,000
----------------------------------------------------------------------
100,000 Kern County, CA, Public Facility Corp. (Series D) Weekly VRDNs (Sanwa
Bank Ltd. LOC) VMIG1 100,000
----------------------------------------------------------------------
1,400,000 Kern County, CA, Public Facility Corp. Weekly VRDNs (Sanwa Bank Ltd.
LOC) VMIG1 1,400,000
----------------------------------------------------------------------
3,500,000 Los Angeles County, CA, Metropolitan Transportation Authority General
Revenue Bonds, Weekly VRDNs (Series 1995-A)/(Union Station
Gateway)/(FSA Insured)/(Societe Generale, Paris BPA) A-1+ 3,500,000
----------------------------------------------------------------------
1,000,000 Los Angeles County, CA, Metropolitan Transportation Authority, 4.20%
CP (ABN AMRO Bank N.V., Banque Nationale de Paris, Canadian Imperial
Bank of Commerce, National Westminister Bank, PLC, and Bank of
California N.A. LOCs), Mandatory Tender 7/27/1995 A-1 1,000,000
----------------------------------------------------------------------
3,000,000 Los Angeles County, CA, Metropolitan Transportation Authority, 4.20%
CP (ABN AMRO Bank N.V., Banque Nationale de Paris, Canadian Imperial
Bank of Commerce, National Westminster Bank, PLC, and Bank of
California N.A. LOCs), Mandatory Tender 8/21/1995 A-1 3,000,000
----------------------------------------------------------------------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ -------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
CALIFORNIA--CONTINUED
----------------------------------------------------------------------
$ 3,000,000 Los Angeles, CA, Wastewater System, 4.25% CP, Mandatory Tender
5/19/1995 A-1 $ 3,000,000
----------------------------------------------------------------------
2,000,000 Monterey Peninsula, CA, Water Management District Weekly VRDNs (Series
1992)/(Wastewater Reclamation)/ (Sumitomo Bank Ltd. LOC) VMIG1 2,000,000
----------------------------------------------------------------------
4,000,000 Orange County, CA, IDA Weekly VRDNs (Hon Development Corp.)/(Series
1985B-Niguel Summit II)/(Bank of America NT & SA, LOC) VMIG1 4,000,000
----------------------------------------------------------------------
5,700,000 Orange County, CA, IDA Weekly VRDNs (Series 1991A)/ (The
Lakes)/(Citibank, N.A. LOC) A-1 5,700,000
----------------------------------------------------------------------
4,000,000 Orange County, CA, Local Transportation Authority, Sales Tax Revenue,
4.30% CP (Industrial Bank of Japan Ltd., LOC), Mandatory Tender
5/24/1995 A-1 4,000,000
----------------------------------------------------------------------
4,000,000 (a)Orange County, CA, Monthly VRDNs (Series B)/(PNC Bank N.A. LOC) A-1 4,000,000
----------------------------------------------------------------------
1,000,000 Placerville, CA, 4.25% TRANs, 6/30/1995 SP-1+ 1,000,158
----------------------------------------------------------------------
1,000,000 Riverside County, CA, COPs Weekly VRDNs (Public Facility Finance
Program)/(Sanwa Bank Ltd. LOC) MIG1 1,000,000
----------------------------------------------------------------------
1,000,000 Roseville, CA, Hospital Facilities Authority Weekly VRDNs (Series
1989A)/(Roseville Hospital)/(Toronto-Dominion Bank LOC) VMIG1 1,000,000
----------------------------------------------------------------------
1,600,000 Sacramento CA, COPs Weekly VRDNs (Series 1990)/ (Administration Center
& Courthouse)/(Union Bank of Switzerland LOC) VMIG1 1,600,000
----------------------------------------------------------------------
4,000,000 San Bernardino County, CA, 4.50% TRANs, 7/31/199S SP-1+ 4,005,725
----------------------------------------------------------------------
1,700,000 San Bernardino County, CA, Weekly VRDNs (Series 1985)/ (Woodview
Apartments)/(Bank of America LOC) VMIG1 1,700,000
----------------------------------------------------------------------
1,500,000 San Francisco, CA, City and County Redevelopment Agency Weekly VRDNs
(Series B1)/(Fillmore Center)/(Bank of Nova Scotia LOC) A-1+ 1,500,000
----------------------------------------------------------------------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ -------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ------------------------------------------------------------------------------------
CALIFORNIA--CONTINUED
----------------------------------------------------------------------
$ 1,000,000 Santa Clara County, CA, Housing Authority Weekly VRDNs (Series
1985G)/(Benton Park Central Apartments)/ (Citibank, N.A. LOC) P-1 $ 1,000,000
----------------------------------------------------------------------
1,400,000 Santa Clara County-El Comino Hospital District, CA, Weekly VRDNs
(Valley Medical/Center)/(National Westminster Bank PLC LOC) A-1+ 1,400,000
----------------------------------------------------------------------
400,000 Santa Clara, CA, Weekly VRDNs (Series 1985C)/(Santa Clara Electric
System)/(National Westminster Bank PLC LOC) VMIG1 400,000
----------------------------------------------------------------------
1,400,000 Selma, CA, 4.30% TRANs, 6/30/1995 SP-1 1,400,109
----------------------------------------------------------------------
2,750,000 Southern California Metropolitan Water District, 4.20% CP, Mandatory
Tender 5/23/1995 A-1+ 2,750,000
----------------------------------------------------------------------
710,000 Stockton, CA, IDR Refunding Weekly VRDNs (Series 1993)/ (La Quinta
Motor Inns, Inc.)/(Nationsbank of Texas N.A. LOC) P-1 710,000
----------------------------------------------------------------------
1,000,000 Vallejo, CA, Commercial Development Refunding Weekly VRDNs (Series
1994A)/(Vallejo Center Associates)/(Bank of Tokyo Ltd. LOC) A-1 1,000,000
----------------------------------------------------------------------
3,000,000 West Basin and Central Financing Authority, CA, 4.20% CP (West Basin
Municipal Water District), Mandatory Tender 5/22/1995 A-1+ 3,000,000
---------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $ 92,077,682
---------------------------------------------------------------------- --------------
</TABLE>
* See notes to the Portfolio of Investments on page 9.
(a) This issue is backed by a LOC issued by PNC Corporation. The cost of the
LOC on the date of issuance (December 7, 1994) was $30,875. The market
value of the LOC at April 30, 1995 is $640,000.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($93,616,091) at April 30, 1995.
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following abbreviations are used throughout this portfolio:
BPA-- Bond Purchase Agreement
COPs-- Certificates of Participation
CP-- Commercial Paper
FGIC-- Financial Guaranty Insurance Company
FSA-- Financial Security Assurance
HFA-- Housing Finance Authority
IDA-- Industrial Development Authority
IDR-- Industrial Development Revenue
LOCs-- Letter(s) of Credit
LOC-- Letter of Credit
MBIA-- Municipal Bond Investors Assurance
RANs-- Revenue Anticipation Notes
TOBs-- Tender Option Bonds
TRANs-- Tax and Revenue Anticipation Notes
VRDNs-- Variable Rate Demand Notes
VRNs-- Variable Rate Notes
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the long-
term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the second representing an evaluation of
the degree of risk associated with the demand feature. The VMIG rating can be
assigned a 1 or 2 designation using the same definitions described above for the
MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This 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 INVESTORS SERVICE, INC.
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.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
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.
MOODY'S INVESTORS SERVICE, INC.
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 sometime in the future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P's or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
CALIFORNIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 92,077,682
- ---------------------------------------------------------------------------------------------------
Cash 782,917
- ---------------------------------------------------------------------------------------------------
Income receivable 1,030,972
- --------------------------------------------------------------------------------------------------- -------------
Total assets 93,891,571
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Payable for shares redeemed 24,040
- ---------------------------------------------------------------------------------------
Income distribution payable 240,813
- ---------------------------------------------------------------------------------------
Accrued expenses 10,627
- --------------------------------------------------------------------------------------- ----------
Total liabilities 275,480
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 93,616,091 shares of beneficial interest outstanding $ 93,616,091
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($93,616,091 / 93,616,091 shares outstanding) $1.00
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 1,760,778
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 223,905
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 62,965
- ---------------------------------------------------------------------------------------
Custodian fees 23,429
- ---------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 16,058
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 4,706
- ---------------------------------------------------------------------------------------
Auditing fees 9,240
- ---------------------------------------------------------------------------------------
Legal fees 6,330
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 18,576
- ---------------------------------------------------------------------------------------
Shareholder services fee 97,387
- ---------------------------------------------------------------------------------------
Share registration costs 19,102
- ---------------------------------------------------------------------------------------
Printing and postage 10,245
- ---------------------------------------------------------------------------------------
Insurance premiums 3,083
- ---------------------------------------------------------------------------------------
Miscellaneous 4,255
- --------------------------------------------------------------------------------------- ----------
Total expenses 499,281
- ---------------------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------------------------
Waiver of investment advisory fee $ 218,362
- ---------------------------------------------------------------------------
Waiver of shareholder services fee 16,641 235,003
- --------------------------------------------------------------------------- ---------- ----------
Net expenses 264,278
- --------------------------------------------------------------------------------------------------- ------------
Net investment income $ 1,496,500
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, 1994* SEPTEMBER 30, 1994
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------
OPERATIONS--
- -----------------------------------------------
Net investment income $ 1,496,500 $ 189,550 $ 1,905,264
- ----------------------------------------------- ---------------- --------------------- -----------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------
Distributions from net investment income (1,496,500) (189,550) (1,905,264)
- ----------------------------------------------- ---------------- --------------------- -----------------------
SHARE TRANSACTIONS
- -----------------------------------------------
Proceeds from sale of Shares 204,189,511 30,010,373 362,061,495
- -----------------------------------------------
Net asset value of Shares issued to
shareholders in payment of distributions
declared 195,276 30,088 324,591
- -----------------------------------------------
Cost of Shares redeemed (192,331,369) (23,185,135) (392,000,668)
- ----------------------------------------------- ---------------- --------------------- -----------------------
Change in net assets resulting from Share
transactions 12,053,418 6,855,326 (29,614,582)
- ----------------------------------------------- ---------------- --------------------- -----------------------
Change in net assets 12,053,418 6,855,326 (29,614,582)
- -----------------------------------------------
NET ASSETS:
- -----------------------------------------------
Beginning of period 81,562,673 74,707,347 104,321,929
- ----------------------------------------------- ---------------- --------------------- -----------------------
End of period $ 93,616,091 $ 81,562,673 $ 74,707,347
- ----------------------------------------------- ---------------- --------------------- -----------------------
</TABLE>
*For the one month ended October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, YEAR ENDED SEPTEMBER 30,
1995 1994(A) 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.000 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------
Net investment income 0.02 0.002 0.02 0.02 0.03 0.04 0.05
- ---------------------------------- ------ ------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- ----------------------------------
Distributions from net
investment income (0.02) (0.002) (0.02) (0.02) (0.03) (0.04) (0.05)
- ---------------------------------- ------ ------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.000 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------- ------ ------- --------- --------- --------- --------- ---------
TOTAL RETURN (C) 1.66% 0.23% 2.07% 2.03% 2.83% 4.30% 5.38%
- ----------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------
Expenses 0.59%(d) 0.59%(d) 0.58% 0.54% 0.45% 0.35% 0.38%
- ----------------------------------
Net investment income 3.35%(d) 2.71%(d) 2.03% 2.00% 2.76% 4.19% 5.27%
- ----------------------------------
Expense waiver/
reimbursement (e) 0.53%(d) 0.44%(d) 0.40% 0.35% 0.58% 0.75% 0.86%
- ----------------------------------
SUPPLEMENTAL DATA
- ----------------------------------
Net assets, end of period (000
omitted) $93,616 $81,563 $74,707 $104,322 $59,709 $56,754 $50,391
- ----------------------------------
<CAPTION>
1989(B)
<S> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00
- ----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------
Net investment income 0.03
- ---------------------------------- -----------
LESS DISTRIBUTIONS
- ----------------------------------
Distributions from net
investment income (0.03)
- ---------------------------------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ---------------------------------- -----------
TOTAL RETURN (C) 2.95%
- ----------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------
Expenses 0.40%(d)
- ----------------------------------
Net investment income 5.86%(d)
- ----------------------------------
Expense waiver/
reimbursement (e) 0.89%(d)
- ----------------------------------
SUPPLEMENTAL DATA
- ----------------------------------
Net assets, end of period (000
omitted) $36,628
- ----------------------------------
</TABLE>
(a) For the one month ended October 31, 1994.
(b) Reflects operations for the period from March 15, 1989 (date of initial
public offering) to September 30, 1989.
(c) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Effective August 13, 1994, California Municipal Cash Trust (the "Fund") was
reorganized into an investment portfolio of Federated Municipal Trust (the
"Trust"). The Trust is registered under the Investment Company Act of 1940, as
amended (the "Act") as an open-end management investment company. The Trust
consists of thirteen non-diversified portfolios. The financial statements
included herein present only those of the Fund. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
71.5 % 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 value of investments
insured by or supported (backed) by a letter of credit for any one
institution or agency does not exceed 9.3% of total investments.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
At April 30, 1995, capital paid-in aggregated beneficial in Fund shares were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS PERIOD ENDED YEAR ENDED
ENDED APRIL 30, OCTOBER 31, SEPTEMBER 30,
1995 1994* 1994
<S> <C> <C> <C>
Shares sold 204,189,511 30,010,373 362,061,495
- ----------------------------------------------------------
Shares issued to shareholders in
payment of dividends declared 195,276 30,088 324,591
- ----------------------------------------------------------
Shares redeemed (192,331,369) (23,185,135) (392,000,668)
- ---------------------------------------------------------- ------------------- -------------- -----------------
Net change resulting from share transactions 12,053,418 6,855,326 (29,614,582)
- ---------------------------------------------------------- ------------------- -------------- -----------------
</TABLE>
*For the one month ended October 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records.
The fee is based on the level of the Fund's average daily net assets for the
period plus, out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $32,354 were borne initially
by the 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 expenses,, until expenses initially borne by the
Adviser are fully reimbursed or the expiration of five years after March 15,
1989, the date the Fund's registration statements first became effective,
whichever occurs earlier. For the period ended April 30, 1995, the Fund paid
$1,642 pursuant to this agreement.
CAPITAL CONTRIBUTION--Federated Management was deemed to make a capital
contribution in the amount of $30,875 to California Municipal Cash Trust during
the period ending April 30, 1995. This contribution represents the cost of a
Letter of Credit ("LOC") to support the value of $4,000,000 par, Orange County,
CA, Monthly VRN's (series B) in the Fund's Portfolio of investments. This LOC
guarantees the principal amount of the security in the event that this issuer
does not timely pay the principal balance at maturity.
INTERFUND TRANSACTIONS--During the period ended April 30, 1995, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These transactions were made at current market value pursuant
to Rule 17A7 under the Act amounting to $111,800,000 and $99,000,000,
respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) CHANGE IN FISCAL YEAR END
The Fund has changed its fiscal year end from September 30, to October 31,
beginning Septem-
ber 30, 1994.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit
Insurance Corporation, the Federal Reserve Board, or any other government
agency. Investment in mutual funds involves investment risk, including possible
loss of
principal. Although money market funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the fund's prospectus which contain facts concerning its
objective and policies, management fees, expenses and other information.
NEW YORK
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of Federated Investors
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229733
314229741
8060106 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of New York
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995. The fund consists of two classes of
shares known as Institutional Service Shares and Cash II Shares.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Service Shares and Cash
II Shares.
New York Municipal Cash Trust continues to seek relief for you and other
tax-sensitive New York residents, in the form of triple tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of New
York municipal securities, issued to fund projects as varied as education,
health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $6.0
million in total distributions to shareholders. As of this report, the fund's
total net assets are $272.9 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
*Income may be subject to the federal alternative minimum tax. Income earned is
free from local New York income taxes.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield of the fund's
Institutional Service Shares rose from 3.07% on November 1, 1994, to 3.95% on
April 30, 1995.* For the Cash II Shares, the seven-day net yield rose from 2.88%
on November 1, 1994, to 3.79% on April 30, 1995.*
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A Early in the reporting period, we added to our positions of short maturity
commercial paper (CP) and fully utilized VRDNs in order to maintain the
responsiveness of the portfolio to changes in short-term interest rates.
VRDNs adjust quickly to changes in Fed policy as well as supply and demand
imbalances that are unique to the municipal money markets. The purchase of CP
typically allows us to pick up an additional yield premium over VRDNs over time,
while still retaining portfolio responsiveness to further rate increases. As a
result, the average maturity of the fund ranged predominantly in the 35-45 day
range, with an emphasis on the shorter end of this range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan to extend the average maturity of the fund
during this period of heavy issuance, as yields on fixed-rate notes may become
attractive versus comparable maturity taxable securities.
* Past performance does not guarantee future results. Yield will vary.
NEW YORK MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--100.6%
- --------------------------------------------------------------------------------------
NEW YORK--100.6%
------------------------------------------------------------------------
$ 4,525,000 Albany City School District, NY, 4.75% BANs (Series 1995), 5/3/1996 NR(3) $ 4,542,286
------------------------------------------------------------------------
480,000 Amherst, NY, IDA Weekly VRDNs (Nanhardt/Alexander, Inc.)/(Marine Midland
Bank LOC)/(Subject to AMT) A-2 480,000
------------------------------------------------------------------------
1,000,000 Babylon, NY, IDA, Weekly VRDNs (Series 1994)/(J. D'Addario & Company,
Inc.)/(National Westminster Bank, PLC LOC)/(Subject to AMT) VMIG1 1,000,000
------------------------------------------------------------------------
5,000,000 Brentwood, NY, Union Free School District, 4.50% TANs,
6/30/1995 NR 5,004,748
------------------------------------------------------------------------
3,600,000 Broome County, NY, 4.75% BANs (Series 1995), 4/19/1996 NR(3) 3,615,014
------------------------------------------------------------------------
6,000,000 Central Islip, NY, 4.50% TANs, 6/30/1995 NR 6,004,736
------------------------------------------------------------------------
3,000,000 Chautauqua County, NY, 5.50% TANs (Series 1995),
12/21/1995 NR(3) 3,007,160
------------------------------------------------------------------------
4,000,000 Chautauqua County, NY, IDA Weekly VRDNs (Cliffstar Corp.)/(Society Bank,
N.A. LOC)/(Subject to AMT) P-1 4,000,000
------------------------------------------------------------------------
3,900,000 Chautauqua County, NY, IDA Weekly VRDNs (Mogen David Wine Corp.)/(Mellon
Bank N.A. LOC)/(Subject to AMT) P-1 3,900,000
------------------------------------------------------------------------
1,140,000 Colonie, NY, IDA Weekly VRDNs (Herbert S. Ellis)/(Marine Midland Bank
N.A. LOC)/(Subject to AMT) A-2 1,140,000
------------------------------------------------------------------------
820,000 Colonie, NY, IDA Weekly VRDNs (Series 1988)/(13 Green Mountain
Drive)/(Marine Midland Bank N.A. LOC)/(Subject to AMT) A-2 820,000
------------------------------------------------------------------------
5,000,000 Erie County, NY, IDA Weekly VRDNs (Series 1994)/
(Servotronics, Inc.)/(Fleet Bank of New York LOC)/
(Subject to AMT) P-1 5,000,000
------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
$ 1,280,000 Erie County, NY, IDA Weekly VRDNs (Data-Rex, Inc.)/ (Marine Midland Bank
N.A. LOC)/(Subject to AMT) A-2 $ 1,280,000
------------------------------------------------------------------------
1,800,000 Franklin County, NY, IDA Weekly VRDNs (Series 1991A)/ (KES
Chateaugay)/(Bank of Tokyo Ltd. LOC) A-1 1,800,000
------------------------------------------------------------------------
1,500,000 Guilderland, NY, IDA Weekly VRDNs (Series 1993A)/
(Northeastern Industrial Park, Inc.)/(Chemical Bank LOC) P-1 1,500,000
------------------------------------------------------------------------
4,000,000 Hempstead, NY, 5.50% BANs (Series 1995A), 3/1/1996 VMIG1 4,024,500
------------------------------------------------------------------------
5,100,000 Herkimer County, NY, IDA Weekly VRDNs (Series 1994)/ (Granny's Kitchens,
Ltd.)/(Bank of New York, New York LOC)/(Subject to AMT) A-1 5,100,000
------------------------------------------------------------------------
10,000,000 Longwood, NY, Central School District, 4.25% TANs,
6/23/1995 NR 10,006,846
------------------------------------------------------------------------
2,120,000 Madison County, NY, IDA Monthly VRDNs (Series 1989A)/
(Upstate Metals Corp.)/(Fleet Bank of New York N.A.
LOC)/(Subject to AMT) A-1 2,120,000
------------------------------------------------------------------------
15,000,000 Marine Midland, NY, Premium Tax-Exempt Bond & Loan Trust Weekly VRDNs
(Marine Midland Bank N.A. and Hong Kong Shanghai Bank LOCs) P-1 15,000,000
------------------------------------------------------------------------
581,000 Nassau County, NY, IDA Weekly VRDNs (465 Endo
Associates)/(Dai-Ichi Kangyo Bank Ltd. LOC, Ford
Motor Credit BPA) P-1 581,000
------------------------------------------------------------------------
1,127,812 Nassau County, NY, IDA Weekly VRDNs (D.L. Blair Corp.)/ (Dai-Ichi Kangyo
Bank Ltd. LOC, Ford Motor Credit Co. BPA) P-1 1,127,812
------------------------------------------------------------------------
1,650,000 Nassau County, NY, IDA Weekly VRDNs (R.M. Pascucci Corp.)/(Dai-Ichi
Kangyo Bank Ltd. LOC, Ford Motor Credit BPA) P-1 1,650,000
------------------------------------------------------------------------
7,000,000 New York City, NY, Municipal Water Finance Authority, 4.45% CP (Credit
Suisse LOC), Mandatory Tender 7/17/1995 A-1+ 7,000,000
------------------------------------------------------------------------
14,000,000 New York City, NY, Monthly VRDNs (Series B) SP-1 14,000,000
------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
$ 4,900,000 New York City, NY, IDA Daily VRDNs (Japan Airlines Co.)/ (Morgan
Guaranty Trust Co. LOC)/(Subject to AMT) A-1+ $ 4,900,000
------------------------------------------------------------------------
316,667 New York City, NY, IDA Weekly VRDNs (David Rosen
Bakers Supply, Inc.)/(Dai-Ichi Kangyo Bank Ltd. LOC, Ford Motor Credit
BPA) P-1 316,667
------------------------------------------------------------------------
506,668 New York City, NY, IDA Weekly VRDNs (Lomar Development Corp.)/(Dai-Ichi
Kangyo Bank Ltd. LOC, Ford Motor Credit BPA) P-1 506,668
------------------------------------------------------------------------
135,431 New York City, NY, IDA Weekly VRDNs (MLN Associates)/ (Dai-Ichi Kangyo
Bank Ltd. LOC, Ford Motor Credit BPA) P-1 135,431
------------------------------------------------------------------------
900,000 New York City, NY, IDA Weekly VRDNs (Mindel
Associates)/(Chemical Bank LOC)/(Subject to AMT) A-1 900,000
------------------------------------------------------------------------
1,900,000 New York City, NY, IDA Weekly VRDNs Special Facility Revenue Bonds
(Series 1990)/(Air France)/(Societe Generale LOC)/(Subject to AMT) A-1+ 1,900,000
------------------------------------------------------------------------
7,000,000 New York City, NY, Municipal Water Finance Authority, 4.40% CP (Series
4)/(Credit Suisse LOC), Mandatory Tender 5/23/1995 A-1+ 7,000,000
------------------------------------------------------------------------
2,600,000 New York City, NY, Trust for Cultural Resources Daily VRDNs (Series
1990B)/(Solomon R. Guggenheim Foundation)/(Swiss Bank Corp. LOC) A-1+ 2,600,000
------------------------------------------------------------------------
5,475,000 (a)New York State Dormitory Authority Weekly VRDNs PA-60 (Series
1993)/(Rochester General Hospital)/(FHA Insured)/ (Merrill Lynch Capital
Services, Inc. BPA) A-1+ 5,475,000
------------------------------------------------------------------------
6,850,000 New York State Dormitory Authority, 5.00% CP (Series
1989B)/(Sloan-Kettering Memorial Cancer Center)/(Fuji Bank Ltd. LOC),
Mandatory Tender 5/1/1995 A-1 6,850,000
------------------------------------------------------------------------
2,700,000 New York State Energy Research & Development Authority Weekly VRDNs
(Long Island Lighting Co.)/(Toronto-
Dominion Bank LOC)/(Subject to AMT) VMIG1 2,700,000
------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
$ 3,000,000 New York State Energy Research & Development Authority Weekly VRDNs
(Series 1993A)/(Long Island Lighting Co.)/ (Toronto-Dominion Bank LOC) VMIG1 $ 3,000,000
------------------------------------------------------------------------
3,285,000 New York State Energy Research & Development Authority, 4.40% Annual
TOBs (Series 1985)/(Rochester Gas & Electric Corp.)/(Credit Suisse LOC),
Optional Tender 11/15/1995 A-1+ 3,285,000
------------------------------------------------------------------------
2,000,000 New York State Energy Research & Development Authority, 4.65% TOBs (New
York State Electric and Gas Corp.)/
(Morgan Bank LOC), Optional Tender 3/15/1996 A-1+ 2,000,000
------------------------------------------------------------------------
2,000,000 New York State Energy Research Pollution Authority, PCR, 4.70% Annual
TOBs (Long Island Lighting Company)/ (Deutsche Bank AG LOC), Optional
Tender 3/1/1996 A-1+ 2,000,000
------------------------------------------------------------------------
8,000,000 (a)New York State Floating Rate Trust Certificate Weekly VRDNs (Series
144A)/(AMBAC Insured) A-1+ 8,000,000
------------------------------------------------------------------------
1,290,000 New York State Job Development Authority Weekly VRDNs (New York State,
Guaranty)/(Subject to AMT) VMIG1 1,290,000
------------------------------------------------------------------------
1,590,000 New York State Job Development Authority Weekly VRDNs (Sumitomo Bank
Ltd. LOC)/(Subject to AMT) VMIG1 1,590,000
------------------------------------------------------------------------
12,000,000 (a)New York State Medical Care Facilities Finance Agency Weekly VRDNs
(Series 1993G)/(St. Luke's-Roosevelt
Hospital Center)/(FHA Insured, Hong Kong & Shanghai
Banking Corp. BPA) A-1 12,000,000
------------------------------------------------------------------------
3,700,000 (a)New York State Mortgage Agency Weekly VRDNs (Merrill Lynch Capital
Services, Inc. BPA)/(Subject to AMT) VMIG1 3,700,000
------------------------------------------------------------------------
980,000 (a)New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds
Weekly VRDNs (Series PT-15B)/(Dai-Ichi Kangyo Bank Ltd. BPA)/(Subject to
AMT) VMIG1 980,000
------------------------------------------------------------------------
3,000,000 Niagara County, NY, IDA Weekly VRDNs (Allegheny
Ludlum Corp.)/(PNC Bank N.A. LOC) A-1 3,000,000
------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
$ 9,500,000 Niagara County, NY, IDA, Solid Waste Disposal Facility, 4.25% CP (Series
1994C)/(American Ref-Fuel Company)/ (Subject to AMT), 5/18/1995 A-1 $ 9,500,000
------------------------------------------------------------------------
1,010,000 North Hempstead, NY, 4.75% BANS (Series 1995B), 4/25/1996 NR(3) 1,014,282
------------------------------------------------------------------------
820,000 Onondaga County, NY, IDA Weekly VRDNs (Beverage Corp.)/(Marine Midland
Bank N.A. LOC)/(Subject to AMT) A-2 820,000
------------------------------------------------------------------------
1,075,000 Onondaga County, NY, IDA Weekly VRDNs (Series 1987)/ (Southern Container
Corp.)/(Chemical Bank LOC)/(Subject to AMT) VMIG1 1,075,000
------------------------------------------------------------------------
1,725,000 Onondaga County, NY, IDA Weekly VRDNs (W.W. Grainger, Inc.) A-1+ 1,725,000
------------------------------------------------------------------------
1,550,000 Ontario, NY, IDA Weekly VRDNs (Hillcrest Enterprises/ Buckeye
Corrugated, Inc.)/(National City Bank, Cleveland LOC)/(Subject to AMT) P-1 1,550,000
------------------------------------------------------------------------
5,700,000 Oswego County, NY, IDA Weekly VRDNs (Copperweld Co.)/(PNC Bank N.A. LOC) P-1 5,700,000
------------------------------------------------------------------------
8,000,000 Planview, NY, Old Bethpage Central School District, 4.50% TANs,
6/30/1995 NR 8,005,949
------------------------------------------------------------------------
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs A-1+ 15,000,000
------------------------------------------------------------------------
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs (Subject to AMT) A-1+ 15,000,000
------------------------------------------------------------------------
1,000,000 Rotterdam, NY, IDA Weekly VRDNs (Series 1993A)/
(Rotterdam Industrial Park)/(Chemical Bank LOC) P-1 1,000,000
------------------------------------------------------------------------
722,677 Schenectady, NY, IDA Weekly VRDNs (McClellan Street
Associates)/(Dai-Ichi Kangyo Bank Ltd. LOC, Ford Motor Credit BPA) P-1 722,677
------------------------------------------------------------------------
5,000,000 South Country, NY, Central School District, 4.50% TANs,
6/29/1995 NR 5,002,792
------------------------------------------------------------------------
1,800,000 Suffolk County, NY, IDA, 5.525% Semi-Annual TOBs
(W.W. Grainger, Inc. Guaranty), Optional Tender 6/1/1995 P-1 1,800,000
------------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
$ 6,000,000 Suffolk County, NY, 5.25% TANs (Series I)/(Westdeutsche Landesbank
Gironzentrale LOC), 8/15/1995 SP-1+ $ 6,007,638
------------------------------------------------------------------------
3,450,000 Suffolk County, NY, IDA Weekly VRDNs (C & J Realty Corp.)/(Dai-Ichi
Kangyo Bank Ltd. LOC, Ford Motor Credit BPA) P-1 3,450,000
------------------------------------------------------------------------
564,167 Suffolk County, NY, IDA Weekly VRDNs (CS Property/Tara Toy,
Inc.)/(Dai-Ichi Kangyo Bank Ltd. LOC, Ford Motor Credit BPA) P-1 564,167
------------------------------------------------------------------------
350,000 Suffolk County, NY, IDA Weekly VRDNs (D.A. Yaron)/
(Dai-Ichi Kangyo Bank Ltd. LOC, Ford Motor Credit BPA)/
(Subject to AMT) P-1 350,000
------------------------------------------------------------------------
1,050,000 Suffolk County, NY, IDA Weekly VRDNs (Poly Research Corp.)/(Marine
Midland Bank N.A. LOC)/(Subject to AMT) A-2 1,050,000
------------------------------------------------------------------------
7,500,000 Walden Village, NY, IDRB (Series 1994) Weekly VRDNs (Spence Engineering
Co.)/(First Union National Bank LOC) P-1 7,500,000
------------------------------------------------------------------------
6,090,000 Warren & Washington Counties, NY, IDA Monthly VRDNs (Sandy Hill
Corp.)/(Fleet Bank of New York N.A. LOC)/ (Subject to AMT) A-1 6,090,000
------------------------------------------------------------------------
1,510,000 Yates County, NY, IDA Weekly VRDNs (Series 1992A)/ (Clearplass
Containers, Inc.)/(Norstar Bank of Upstate NY LOC)/(Subject to AMT) A-1 1,510,000
------------------------------------------------------------------------
2,400,000 Yonkers, NY, IDA Weekly VRDNs (Series 1992A)/(Consumers Union
Facility)/(Industrial Bank of Japan Ltd. LOC) VMIG1 2,400,000
------------------------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $ 274,670,373
------------------------------------------------------------------------ --------------
</TABLE>
(a) Denotes a restricted security which is subject to resale under Federal
Securities laws. This security has been determined to be liquid under
criteria established by the Board of Trustees.
(b) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 11.
Note: The categories of investments are shown as a percentage of net assets
($272,932,010) at April 30, 1995.
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following abbreviation(s) are used throughout this portfolio:
AMBAC-- American Municipal Bond
Assurance Corporation
AMT-- Alternative Minimum Tax
BANs-- Bond Anticipation Notes
BPA-- Bond Purchase Agreement
CP-- Commercial Paper
FHA-- Federal Housing Administration
IDA-- Industrial Development Authority
IDRB-- Industrial Development Revenue Bond
LOCs-- Letter(s) of Credit
LOC-- Letter of Credit
PCR-- Pollution Control Revenue
PLC-- Public Limited Company
TANs-- Tax Anticipation Notes
TOBs-- Tender Option Bonds
VRDNs-- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below) ). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the long-
term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
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
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
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 edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
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 which suggest a susceptibility to impairment sometime in the future.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $ 274,670,373
- -------------------------------------------------------------------------------------------------
Cash 866,724
- -------------------------------------------------------------------------------------------------
Income receivable 2,600,618
- ------------------------------------------------------------------------------------------------- --------------
Total assets 278,137,715
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 4,542,337
- -----------------------------------------------------------------------------------
Income distribution payable 663,368
- ----------------------------------------------------------------------------------- ------------
Total liabilities 5,205,705
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 272,949,618 shares outstanding $ 272,932,010
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSISTS OF:
- -------------------------------------------------------------------------------------------------
Paid in capital $ 272,949,619
- -------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (17,609)
- ------------------------------------------------------------------------------------------------- --------------
Total Net Assets $ 272,932,010
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES ($263,442,155 / 263,460,075 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
CASH II SHARES ($9,489,855 / 9,489,543 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 7,076,379
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 711,245
- --------------------------------------------------------------------------------------
Administrative personnel and services fee 134,603
- --------------------------------------------------------------------------------------
Custodian fees 37,615
- --------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 34,418
- --------------------------------------------------------------------------------------
Directors'/Trustees' fees 4,955
- --------------------------------------------------------------------------------------
Auditing fees 7,361
- --------------------------------------------------------------------------------------
Legal fees 5,374
- --------------------------------------------------------------------------------------
Portfolio accounting fees 32,491
- --------------------------------------------------------------------------------------
Distribution services fee--Institutional Service Shares 37,525
- --------------------------------------------------------------------------------------
Distribution services fee--Cash II Shares 130,422
- --------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 196,103
- --------------------------------------------------------------------------------------
Shareholder services fee--Cash II Shares 129,596
- --------------------------------------------------------------------------------------
Share registration costs 12,386
- --------------------------------------------------------------------------------------
Printing and postage 16,004
- --------------------------------------------------------------------------------------
Insurance premiums 5,134
- --------------------------------------------------------------------------------------
Miscellaneous 3,589
- -------------------------------------------------------------------------------------- ------------
Total expenses 1,498,821
- --------------------------------------------------------------------------------------
Deduct--
- --------------------------------------------------------------------------------------
Waiver of investment advisory fee $ 189,187
- --------------------------------------------------------------------------
Waiver of distribution services fee--Institutional Service Shares 37,525
- --------------------------------------------------------------------------
Waiver of distribution services fee--Class II Shares 128,849
- --------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service Shares 103,358
- --------------------------------------------------------------------------
Waiver of shareholder services fee--Class II Shares 1,573 460,492
- -------------------------------------------------------------------------- ---------- ------------
Net expenses 1,038,329
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 6,038,050
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
<S> <C> <C>
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------------
Net investment income $ 6,038,050 $ 7,881,134
- -------------------------------------------------------------------------------
Net realized gain (loss) on investments-identified cost basis -- 322
- ------------------------------------------------------------------------------- --------------- ---------------
Change in assets resulting from operations 6,038,050 7,881,456
- ------------------------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------------
Distributions from net investment income:
- -------------------------------------------------------------------------------
Institutional Service Shares (4,387,678) (5,630,675)
- -------------------------------------------------------------------------------
Cash II Shares (1,650,372) (2,250,459)
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions to shareholders (6,038,050) (7,881,134)
- ------------------------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS
- -------------------------------------------------------------------------------
Proceeds from sale of Shares 660,842,963 918,756,952
- -------------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in
payment of distributions declared 2,286,295 2,705,999
- -------------------------------------------------------------------------------
Cost of Shares redeemed (760,828,368) (884,074,127)
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from Share transactions (97,699,110) 37,388,824
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets (97,699,110) 37,389,146
- -------------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------------
Beginning of period 370,631,120 333,241,974
- ------------------------------------------------------------------------------- --------------- ---------------
End of period $ 272,932,010 $ 370,631,120
- ------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30,
1995 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income 0.02 0.02 0.02 0.03 0.04 0.05 0.06 0.05
- ---------------------------------
LESS DISTRIBUTIONS
- ---------------------------------
Distributions from net
investment income (0.02) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06) (0.05)
- --------------------------------- ----- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------- ----- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (A) 1.74% 2.35% 2.16% 3.01% 4.59% 5.51% 5.70% 4.66%
- ---------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------
Expenses 0.53%(b) 0.52% 0.54% 0.57% 0.52% 0.54% 0.55% 0.51%
- ---------------------------------
Net investment income 3.48%(b) 2.31% 2.14% 2.99% 4.48% 5.36% 5.56% 4.57%
- ---------------------------------
Expense waiver/reimbursement (c) 0.22%(b) 0.13% 0.17% 0.00% 0.00% 0.00% 0.00% 0.00%
- ---------------------------------
SUPPLEMENTAL DATA
- ---------------------------------
Net assets, end of period (000
omitted) $263,442 $236,580 $274,357 $164,492 $191,616 $197,213 $245,542 $212,786
- ---------------------------------
<CAPTION>
<S> <C> <C>
1987 1986
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00
- ---------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income 0.04 0.04
- ---------------------------------
LESS DISTRIBUTIONS
- ---------------------------------
Distributions from net
investment income (0.04) (0.04)
- --------------------------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- --------------------------------- --------- ---------
TOTAL RETURN (A) 3.90% 4.35%
- ---------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------
Expenses 0.47% 0.47%
- ---------------------------------
Net investment income 3.81% 4.18%
- ---------------------------------
Expense waiver/reimbursement (c) 0.00% 0.00%
- ---------------------------------
SUPPLEMENTAL DATA
- ---------------------------------
Net assets, end of period (000
omitted) $141,040 $183,941
- ---------------------------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) Computed on an annualized basis.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CLASS II SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30,
1995 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1994 1993 1992 1991(A)
<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 0.02 0.02 0.02 0.03 0.02
- --------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------
Distributions from net
investment income (0.02) (0.02) (0.02) (0.03) (0.02)
- -------------------------------------------------- ------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------- ------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.65% 2.15% 1.98% 2.86% 2.20%
- --------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------
Expenses 0.71%(c) 0.71% 0.71% 0.73% 0.46%(c)
- --------------------------------------------------
Net investment income 3.18%(c) 2.19% 1.96% 2.46% 4.08%(c)
- --------------------------------------------------
Expense waiver/reimbursement (d) 0.35%(c) 0.21% 0.17% 0.00% 0.00%(c)
- --------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------
Net assets, end of period (000 omitted) $9,490 $134,051 $58,884 $4,641 $56
- --------------------------------------------------
</TABLE>
(a) Reflects operations for the period from April 25, 1991 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end, management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present only those of New York
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 offers two classes of shares: Institutional Service Shares and
Class II Shares.
On August 26, 1994, shareholders of the Fund approved the reorganization of the
Fund into a portfolio of the Trust. The information included in the financial
statements includes data from the period of the time preceding the
reorganization.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary. At October 31, 1994, the Fund,
for federal tax purposes, had a capital loss carryforward of $17,609, which
will reduce the Fund's taxable income arising from future net realized gain
on investments, if any, to the extent permitted by the Code, and thus will
reduce the amount of the distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal
tax. Pursuant to the Code, such capital loss carryforward will expire in
1996.
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.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
59.3% 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 value of investments insured by
or supported (backed) by a letter of credit for any one institution or
agency does not exceed 6.4% of total investments.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under Federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In come 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 "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 Act. Additional information on each restricted
security held at April 30, 1995, is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
New York Dormitory Authority Weekly VRDN's 3/13/95 $ 5,475,000
New York State Floating Rate Trust
Certificate Weekly VRDN's 4/12/93-7/2/93 8,000,000
New York State Medical Care Facilities Finance
Agency Weekly VRDN's 4/7/95-4/10/95 12,000,000
New York State Mortgage Agency Weekly VRDN's 4/3/95 3,700,000
New York State Mortgage Agency Weekly VRDN's
Homeowner Mortgage Revenue 3/3/95 980,000
</TABLE>
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, 1995, capital paid in aggregated $272,932,010.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1995 1994
-------------- --------------
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
- ---------------------------------------------------------------------------------- -------------- --------------
Shares sold 465,336,953 548,493,561
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 586,154 758,005
- ----------------------------------------------------------------------------------
Shares redeemed (439,060,795) (587,029,347)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service Shares transactions 26,862,312 (37,777,781)
- ---------------------------------------------------------------------------------- -------------- --------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1995 1994
-------------- --------------
CASH II SHARES SHARES SHARES
<S> <C> <C>
- ---------------------------------------------------------------------------------- -------------- --------------
Shares sold 195,506,008 370,263,391
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,700,142 1,947,994
- ----------------------------------------------------------------------------------
Shares redeemed (321,767,573) (297,044,780)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Cash II Shares transactions (124,561,423) 75,166,605
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions (97,699,111) 37,388,824
- ---------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion. As of
September 2, 1994, the Fund changed its expense cap from contractual to
voluntary.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund's shares. The Plan provides that the Fund may incur
distribution expenses up to .25 of 1% of the average daily net assets of the
Institutional Service Shares and Cash II Shares, annually, to reimburse FSC.
The distributor may voluntarily choose to waive any portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at its
sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain the shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the six-months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common officers. These transactions were made at
current market value pursuant to Rule 17a-7 under the Act amounting to
$259,005,000 and $286,135,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit
Insurance Corporation, the Federal Reserve Board, or any other government
agency. Investment in mutual funds involves investment risk, including possible
loss of
principal. Although money market funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the fund's prospectus which contain facts concerning its
objective and policies, management fees, expenses and other information.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Florida
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995.
We begin this report with our customary update from the fund's portfolio
manager, Jeff A. Kozemchak, who will discuss market activity and changes in the
fund's strategy relative to that activity. Jeff's report is followed by the
fund's Portfolio of Investments and Financial Statements.
Florida Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Florida residents, in the form of tax-free* monthly income. The
fund is able to pursue this income by maintaining a portfolio of Florida
municipal securities, issued to fund projects as varied as education, health
care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid more than $2.3
million in total distributions to shareholders, and the fund's total net assets
increased from $53.9 million to $119.2 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
* INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX. SHARES OF THE
FUND ARE EXEMPT FROM FLORIDA'S INTANGIBLES TAX ON PERSONAL PROPERTY.
1
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
AN INTERVIEW WITH THE FUND'S PORTFOLIO MANAGER, JEFF A. KOZEMCHAK
Q Jeff, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995. On
November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from the high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period to 4.65% on April 30, 1995. Yield levels also moved upward for one-year
fixed-rate notes, increasing from 4.19% in early November, 1994, to a high of
5.10% in early January, 1995, before steadily falling to 4.29% at the end of the
reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The seven-day net yield* of the fund rose from
3.16% on November 1, 1994, to 3.98% on April 30, 1995.
* PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. YIELD WILL VARY.
2
- --------------------------------------------------------------------------------
Q Did you make any strategic changes to the fund's portfolio in this rate
atmosphere?
A We added to the fund's holdings of short maturity commercial paper (CP) and
VRDNs in order to increase the responsiveness to changes in short-term
interest rates. VRDNs adjust quickly to changes in Fed policy as well as
supply and demand imbalances that are unique to the municipal money markets. The
purchase of CP typically allows us to pick up an additional yield premium over
VRDNs over time, while still retaining portfolio responsiveness to further rate
increases. Also, the average maturity of the fund was targeted within a range of
30 to 45 days, with an emphasis on the shorter end of the target range.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We expect
that Fed policy will continue to be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. Short-term interest rates should trade within
a narrow range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly starting in mid-June,
1995, cheapening note levels. We plan, on average, to extend the average
maturity of the fund during this period of heavy issuance, as yields on
fixed-rate notes may become attractive versus comparable maturity taxable
securities.
3
FLORIDA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.2%
- -----------------------------------------------------------------------------
FLORIDA--92.9%
-----------------------------------------------------------------
$1,600,000 Alachua County, FL, HFA, Health Facility Revenue Bonds Weekly
VRDNs (Series 1991)/(North Florida Retirement
Village)/(Kredietbank N.V. LOC) A-1 $ 1,600,000
-----------------------------------------------------------------
3,000,000 Clay County, FL, IDRB Weekly VRDNs (Series 1994)/(Trust Company
Bank LOC) P-1 3,000,000
-----------------------------------------------------------------
2,900,000 Columbia County, FL, Health Facility Authority Weekly VRDNs
(Series 1991)/(Lake Shore Hospital)/(Sumitomo Bank Ltd. LOC) A-1 2,900,000
-----------------------------------------------------------------
2,000,000 Dade County, FL, IDA, IDRB Weekly VRDNs (Series 1995)/ (June
Leasing Co.)/(First Union National Bank of Florida LOC)/(Subject
to AMT) A-1 2,000,000
-----------------------------------------------------------------
3,000,000 Florida HFA, Multi-Family Housing Revenue Refunding Bonds Weekly
VRDNs (Series 1995D)/(Park Colony L.P.)/(Mellon Bank N.A. LOC) A-1 3,000,000
-----------------------------------------------------------------
1,000,000 Florida HFA Weekly VRDNs (Series 1985A)/(Parrot's Landing)/
(Citibank N.A. LOC) A-1 1,000,000
-----------------------------------------------------------------
4,000,000 Florida Local Government Finance Authority, 4.30% CP
(Series A)/(First Union National Bank of Florida LOC), Mandatory
Tender 6/23/1995 A-1 4,000,000
-----------------------------------------------------------------
4,000,000 Florida Municipal Loan Council, 4.25% CP (Series 1985-1)/
(Florida League of Cities)/(Sumitomo Bank Ltd. LOC), Mandatory
Tender 5/11/1995 VMIG1 4,000,000
-----------------------------------------------------------------
5,290,000 Florida State Board of Education, 4.30% Semi-Annual TOBs,
Optional Tender 6/1/1995 NR(2) 5,290,000
-----------------------------------------------------------------
1,250,000 Florida State Board of Education, 8.40% SB (Prerefunded),
7/1/1995 (@102) AAA 1,282,259
-----------------------------------------------------------------
1,690,000 Florida State, 5.125% Bond (Series H), 7/1/1995 AA 1,692,453
-----------------------------------------------------------------
1,825,000 Florida State, 5.50% Bond, 7/1/1995 AA 1,828,772
-----------------------------------------------------------------
</TABLE>
4
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -----------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------------------
$3,000,000 Greater Orlando, FL, Aviation Authority Airport Facilities, 4.00%
CP (Series B), Mandatory Tender 5/12/1995 A-1 $ 3,000,000
-----------------------------------------------------------------
3,000,000 Hillsborough County, FL, Aviation Authority, 4.20% Bond
Anticipation CP (Tampa International Airport)/(National
Westminster Bank PLC LOC)/(Subject to AMT), Mandatory Tender
6/8/1995 A-1+ 3,000,000
-----------------------------------------------------------------
3,000,000 Hillsborough County, FL, Aviation Authority, 4.30% CP (Tampa
International Airport)/(National Westminster Bank PLC LOC)/
(Subject to AMT), Mandatory Tender 5/10/1995 A-1+ 3,000,000
-----------------------------------------------------------------
2,000,000 Hillsborough County, FL, IDA Weekly VRDNs (Ringhaver Equipment
Co.)/(Mellon Bank N.A. LOC)/(Subject to AMT) P-1 2,000,000
-----------------------------------------------------------------
2,600,000 Hillsborough County, FL, IDA Weekly VRDNs (SIFCO Turbine
Component Service)/(Series 1992)/(National City Bank, Cleveland
LOC)/(Subject to AMT) P-1 2,600,000
-----------------------------------------------------------------
450,000 Indian River County School District, FL, 4.50% TANs (Series
1994), 6/30/1995 MIG1 450,299
-----------------------------------------------------------------
1,500,000 Jacksonville, FL, Health Facility Authority Weekly VRDNs (Series
1994)/(River Garden/The Coves)/(First Union National Bank of
North Carolina LOC) A+ 1,500,000
-----------------------------------------------------------------
1,300,000 Jacksonville, FL, Weekly VRDNs (Metal Sales Manufacturing)/
(First National Bank, Louisville LOC)/(Subject to AMT) P-1 1,300,000
-----------------------------------------------------------------
4,200,000 Key West, FL, Community Redevelopment Authority Weekly VRDNs
(Pier House Joint Venture)/(PNC Bank N.A. LOC) P-1 4,200,000
-----------------------------------------------------------------
1,000,000 Lee County, FL, Health Care Facility Weekly VRDNs (Hope
Hospice)/(Sun Bank N.A. LOC) VMIG1 1,000,000
-----------------------------------------------------------------
2,860,000 Lee County, FL, IDA Weekly VRDNs (Christian & Missionary Alliance
Foundation)/(Banque Paribas LOC) P-1 2,860,000
-----------------------------------------------------------------
1,000,000 Lee County, FL, IDA, IDRB Weekly VRDNs (Series 1994)/ (Baader
North America Corp.)/(Deutsche Bank Financial, Inc. LOC)/(Subject
to AMT) VMIG1 1,000,000
-----------------------------------------------------------------
</TABLE>
5
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -----------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------------------
$1,000,000 Marion County, FL, HFA Multi-Family Revenue Bonds Weekly VRDNs
(Series 1985F)/(Paddock Place)/(First National Bank of Boston
LOC) A-1 $ 1,000,000
-----------------------------------------------------------------
3,000,000 Miami, FL, 5.00% TANs, 9/28/1995 SP-1+ 3,001,892
-----------------------------------------------------------------
2,700,000 Mount Dora, FL, Health Facility Authority Weekly VRDNs (Series
1989)/(Waterman Village)/(Sumitomo Bank Ltd. LOC) A-1 2,700,000
-----------------------------------------------------------------
1,000,000 Orange County, FL, 4.05% CP, Mandatory Tender 5/4/1995 A-1+ 1,000,000
-----------------------------------------------------------------
2,000,000 Orange County, FL, 4.65% CP, Mandatory Tender 5/4/1995 A-1+ 2,000,000
-----------------------------------------------------------------
2,000,000 Orange County, FL, Health Facilities Authority Weekly VRDNs
(Mayflower Retirement Community, Inc.)/(Banque Paribas LOC) A-1 2,000,000
-----------------------------------------------------------------
1,815,000 Palm Beach County, FL, IDA Weekly VRDNs (Palm Jewish Community
Campus Corp.)/(Sun Bank N.A. LOC) A-1+ 1,815,000
-----------------------------------------------------------------
3,500,000 Pinellas County Industry Council, FL, IDRB Weekly VRDNs (Series
1994)/(Genca Corporation)/(PNC Bank, Ohio N.A. LOC)/(Subject to
AMT) P-1 3,500,000
-----------------------------------------------------------------
3,200,000 (b)Pinellas County, FL, HFA, SFM Revenue Bonds Weekly VRDNs
(Series PA-92)/(GNMA Collateralized)/(Merrill Lynch Capital
Services LIQ)/(Subject to AMT) A-1+ 3,200,000
-----------------------------------------------------------------
300,000 Pinellas County, FL, Pooled HFA Daily VRDNs (Chemical Bank LOC) A-1 300,000
-----------------------------------------------------------------
4,000,000 Putnam County, FL, Development Authority, Floating/Fixed Rate
Poll Control Revenue Bonds, 4.30% Semi-Annual TOBs (Pooled Series
1984H)/(CFC Guaranty), Optional Tender 9/15/1995 A-1+ 4,000,000
-----------------------------------------------------------------
4,845,000 Saint Lucie County, FL, IDR Bonds Weekly VRDNs (Series
1985)/(Savannah Hospital)/(NationsBank of Georgia N.A. LOC) P-1 4,845,000
-----------------------------------------------------------------
4,000,000 Saint Lucie County, FL, PCR, 4.25% CP (Florida Power & Light
Co.), Mandatory Tender 5/10/1995 A-1 4,000,000
-----------------------------------------------------------------
</TABLE>
6
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -----------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------------------
$3,800,000 Sarasota County, FL, IDRB Monthly VRDNs (Series 1994)/ (Resource
Recovery Systems of Sarasota)/(Fleet National Bank LOC)/(Subject
to AMT) A-1 $ 3,800,000
-----------------------------------------------------------------
3,000,000 Seminole County, FL, Health Facility Authority IDA Weekly VRDNs
(Series 1991)/(Florida Living Nursing Center)/(Barnett Bank of
Central Florida N.A. LOC) VMIG1 3,000,000
-----------------------------------------------------------------
1,450,000 Sumter County, FL, IDA Weekly VRDNs (Great Southern Wood of
Florida, Inc.)/(SouthTrust Bank of Alabama LOC)/ (Subject to AMT) VMIG1 1,450,000
-----------------------------------------------------------------
4,300,000 Sunshine State Governmental Finance Commission, FL, 4.10% CP
(Morgan Guaranty Trust Co., National Westminster Bank PLC, and
Union Bank of Switzerland LOCs), Mandatory Tender 6/13/1995 VMIG1 4,300,000
-----------------------------------------------------------------
1,600,000 Suwannee County, FL, Weekly VRDNs (Series 1989)/(Advent Christian
Village)/(Barnett Bank of Jacksonville LOC) VMIG1 1,600,000
-----------------------------------------------------------------
2,000,000 Volusia County, FL, HFA Weekly VRDNs (Fisherman's
Landing)/(Mellon Bank N.A. LOC) P-1 2,000,000
-----------------------------------------------------------------
1,725,000 Volusia County, FL, IDA Weekly VRDNs (Crane Cams)/(First
Interstate Bank of Arizona N.A. LOC) P-1 1,725,000
-----------------------------------------------------------------
2,000,000 Volusia County, FL, IDA Weekly VRDNs (Series 1994)/ (Southern
States Utilities, Inc.)/(Sun Bank N.A. LOC) VMIG1 2,000,000
----------------------------------------------------------------- ------------
Total 110,740,675
----------------------------------------------------------------- ------------
ALABAMA--2.1%
-----------------------------------------------------------------
2,500,000 Mobile, AL, IDB, 4.50% Semi-Annual TOBs (International Paper
Co.), Optional Tender 10/15/1995 A-2 2,500,000
----------------------------------------------------------------- ------------
</TABLE>
7
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ----------------------------------------------------------------- ------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -----------------------------------------------------------------------------
CALIFORNIA--4.2%
-----------------------------------------------------------------
$5,000,000 Orange County, CA, Local Transportation Authority, Sales Tax
Revenue, 4.30% CP (Industrial Bank of Japan Ltd. LOC), Mandatory
Tender 5/24/1995 A-1 $ 5,000,000
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST (a) $118,240,675
----------------------------------------------------------------- ------------
------------
<FN>
(a) Also represents cost for federal tax purposes.
(b) Denotes a restricted security which is subject to resale under Federal Securities laws.
This security has been determined to be liquid under criteria established by the Board of
Trustees.
* See Notes to Portfolio of Investments on page 9.
Note: The categories of investments are shown as a percentage of net assets ($119,178,176) at April
30, 1995.
</TABLE>
The following abbreviations are used throughout this portfolio:
<TABLE>
<S> <C>
AMT --Alternative Minimum Tax
CFC --Cooperative Finance Corporation
CP --Commercial Paper
GNMA --Government National Mortgage Association
HFA --Housing Finance Authority
IDA --Industrial Development Authority
IDB --Industrial Development Bond
IDR --Industrial Development Revenue
IDRB --Industrial Development Revenue Bonds
LIQ --Liquidity Agreement
LOCs --Letter(s) of Credit
LOC --Letter of Credit
PCR --Pollution Control Revenue
PLC --Public Limited Company
SB --Serial Bond
SFM --Single Family Mortgage
TANs --Tax Anticipation Notes
TOBs --Tender Option Bonds
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
8
FLORIDA MUNICIPAL CASH TRUST
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1--This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2--This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNs)
AND
TENDER OPTION BONDS (TOBs)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the
long-term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
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
9
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1--This highest category designation indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1--Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well established industries, high rates of return on funds
employed, conservative capitalization structure with moderate reliance on debt
and ample asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to a range of
financial markets and assured sources of alternate liquidity.
P-2--Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
10
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA--Debt rated "AAA" has the highest rating assigned by S&P. 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.
MOODY'S INVESTORS SERVICE, INC.
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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized 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 which
suggest a susceptibility to impairment sometime in the future.
NR--indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
11
FLORIDA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value (identified and tax cost $118,240,675) $118,240,675
- --------------------------------------------------------------------------------------------------
Cash 338,734
- --------------------------------------------------------------------------------------------------
Income receivable 879,569
- --------------------------------------------------------------------------------------------------
Deferred expenses 32,009
- -------------------------------------------------------------------------------------------------- ------------
Total assets 119,490,987
- --------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------
Income distribution payable $ 220,991
- -------------------------------------------------------------------------------------
Accrued expenses 91,820
- ------------------------------------------------------------------------------------- ----------
Total liabilities 312,811
- -------------------------------------------------------------------------------------------------- ------------
NET ASSETS for 119,178,176 shares outstanding $119,178,176
- -------------------------------------------------------------------------------------------------- ------------
------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($119,178,176 DIVIDED BY 119,178,176 shares outstanding) $ 1.00
- -------------------------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
12
FLORIDA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest $2,640,385
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $259,995
- -----------------------------------------------------------------------
Administrative personnel and services fee 64,297
- -----------------------------------------------------------------------
Custodian fees 12,587
- -----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 10,281
- -----------------------------------------------------------------------
Directors'/Trustees' fees 2,450
- -----------------------------------------------------------------------
Auditing fees 6,485
- -----------------------------------------------------------------------
Legal fees 3,795
- -----------------------------------------------------------------------
Portfolio accounting fees 23,767
- -----------------------------------------------------------------------
Shareholder services fee 162,497
- -----------------------------------------------------------------------
Share registration costs 19,219
- -----------------------------------------------------------------------
Printing and postage 4,905
- -----------------------------------------------------------------------
Insurance premiums 3,235
- -----------------------------------------------------------------------
Taxes 2,600
- -----------------------------------------------------------------------
Miscellaneous 2,975
- ----------------------------------------------------------------------- --------
Total expenses 579,088
- -----------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------
Waiver of investment advisory fee $259,995
- ------------------------------------------------------------
Waiver of shareholder services fee 26,657
- ------------------------------------------------------------
Reimbursement of other operating expenses 26,128 312,780
- ------------------------------------------------------------ -------- --------
Net expenses 266,308
- ---------------------------------------------------------------------------------- ----------
Net investment income $2,374,077
- ---------------------------------------------------------------------------------- ----------
----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
13
FLORIDA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL PERIOD ENDED
30, 1995 OCTOBER 31,
(UNAUDITED) 1994(a)
-------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------
Net investment income $ 2,374,077 $ 165,156
- ----------------------------------------------------------------- -------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------
Distributions from net investment income (2,374,077) (165,156)
- ----------------------------------------------------------------- -------------- -------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------
Proceeds from sale of Shares 804,129,320 134,110,437
- -----------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 1,135,365 92,846
- -----------------------------------------------------------------
Cost of Shares redeemed (740,052,696) (80,237,096)
- ----------------------------------------------------------------- -------------- -------------
Change in net assets resulting from Share transactions 65,211,989 53,966,187
- ----------------------------------------------------------------- -------------- -------------
Change in net assets 65,211,989 53,966,187
- -----------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------
Beginning of period 53,966,187 --
- ----------------------------------------------------------------- -------------- -------------
End of period $ 119,178,176 $ 53,966,187
- ----------------------------------------------------------------- -------------- -------------
-------------- -------------
<FN>
(a) For the period from September 12, 1994 (start of business) to October 31,
1994.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
FLORIDA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994(a)
------------------ -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.02 0.0004
- ---------------------------------------------------------------------- -------- -------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Distributions from net investment income (0.02) (0.0004)
- ---------------------------------------------------------------------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ---------------------------------------------------------------------- -------- -------
-------- -------
TOTAL RETURN (b) 1.78% 0.35%
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 0.41%(c) 0.28%(c)
- ----------------------------------------------------------------------
Net investment income 3.65%(c) 3.28%(c)
- ----------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.48%(c) 1.03%(c)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $119,178 $53,966
- ----------------------------------------------------------------------
<FN>
(a) Reflects operations for the period from September 21, 1994 (date of initial
public investment) to October 31, 1994. For the period from September 12,
1994 (start of business) to September 21, 1994 the Fund had no investment
activity.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
15
FLORIDA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present only those of Florida 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.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INTEREST INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
67.6% 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 value of investments insured by
or supported (backed) by a letter of credit for any one institution or
agency does not exceed 8.1% of total investments.
16
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under Federal securities laws or in transactions
exempt from such registration. Many restricted securities may be resold in
the secondary market in transactions exempt from registration. In some
cases, the restricted securities may be resold without registration upon
exercise of a demand feature. Such restricted securities may be determined
to be liquid under criteria established by the Board of Trustees (the
"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 Act. Additional information on each restricted
security held at April 30, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
-------------------------------------------------- -------- ----------
<S> <C> <C>
Pinellas County, FL, HFA, SFM Revenue Bonds
Weekly VRDNs (Series PA-92) 3/3/95 $3,200,000
</TABLE>
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 not to exceed a period of five
years from the Fund's commencement date.
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, 1995, capital paid-in aggregated $119,178,176. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
APRIL 30, OCTOBER 31,
1995 1994*
- ---------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
Shares sold 804,129,320 134,110,437
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,135,365 92,846
- ----------------------------------------------------------------------
Shares redeemed (740,052,696) (80,237,096)
- ---------------------------------------------------------------------- ------------- ------------
Net change resulting from Share transactions 65,211,989 53,966,187
- ---------------------------------------------------------------------- ------------- ------------
------------- ------------
<FN>
* For the period from September 12, 1994 (start of business) to October 31,
1994.
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and reimburse
17
FLORIDA MUNICIPAL CASH TRUST
- ---------------------------------------------------------
certain operating expenses of the Fund. The Adviser can modify or terminate this
voluntary waiver and/or reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund's shares. The Plan provides that the Fund may incur
distribution expenses up to .25 of 1% of the average daily net assets of the
Fund, 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 daily net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain the shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses of $15,374 were borne initially
by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following September 19, 1994
(date the Fund became effective). For the period ended April 30, 1995, the Fund
paid $1,110 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common Directors or
Trustees, and common Officers. These transactions were made at current market
value pursuant to Rule 17a-7 under the Act amounting to $394,370,000 and
$411,245,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
18
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
- ---------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley CHAIRMAN
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland PRESIDENT
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. VICE PRESIDENT
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson VICE PRESIDENT
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer VICE PRESIDENT AND TREASURER
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar VICE PRESIDENT AND SECRETARY
Marjorie P. Smuts David M. Taylor
ASSISTANT TREASURER
G. Andrew Bonnewell
ASSISTANT SECRETARY
</TABLE>
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by the
U.S. government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency. Investment
in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective
investors only when preceded or accompanied by the fund's
prospectus which contains facts concerning its objective and
policies, management fees, expenses and other information.
19
- --------------------------------------------------------------------------------
FLORIDA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
[LOGO] ----------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS -----------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779 ---------------------------------------------
[LOGO]
RECYCLED
PAPER
314229758
G00827-02 (6/95) ------------------------------
MASSACHUSETTS
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1995
INSTITUTIONAL SERVICE SHARES
BAYFUNDS SHARES
FEDERATED MANAGEMENT
- ---------------------------------
Investment Adviser
FEDERATED SECURITIES CORP.
- ---------------------------------
Distributor
A subsidiary of Federated Investors
314229832
314229303
Z00176 1052806 (6/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Massachusetts
Municipal Cash Trust, a portfolio of Federated Municipal Trust, for the
six-month period ended April 30, 1995. The fund consists of two classes of
shares known as Institutional Service Shares and BayFunds Shares.
We begin this report with our customary update from the fund's portfolio
manager, Mary Jo Ochson, who will discuss market activity and changes in the
fund's strategy relative to that activity. Mary Jo's report is followed by the
fund's Portfolio of Investments and Financial Statements. In addition, Financial
Highlights tables have been included for Institutional Service Shares and
BayFunds Shares.
Massachusetts Municipal Cash Trust continues to seek relief for you and other
tax-sensitive Massachusetts residents, in the form of double tax-free* monthly
income. The fund is able to pursue this income by maintaining a portfolio of
Massachusetts municipal securities, issued to fund projects as varied as
education, health care, and housing.
In this way, the fund helps you make the most of your short-term finances, while
funding important municipal improvements in your home state.
During the six-month period covered by the report, the fund paid nearly $2.1
million in total distributions to shareholders. As of this report, the fund's
total net assets are $127.7 million.
As always, we strive to provide you with the highest level of professional
service. We appreciate your continued support and welcome your comments or
questions.
Sincerely,
Glen R. Johnson
President
June 15, 1995
*Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Mary Jo Ochson
Q Mary Jo, can you comment on the changes in money market rates during the
reporting period?
A In the face of resilient economic growth and the potential for this growth
to create inflationary pressures, the Federal Reserve Board (the "Fed")
continued to tighten monetary policy throughout 1994 and into early 1995.
On November 15, 1994, the Fed hiked the federal funds target rate from 4.75% to
5.50%. The most recent move by the Fed, on February 1, 1995, increased the
target rate by 50 basis points to the current 6.00% level. Short-term interest
rates reflected the Fed's upward moves. The yield on the three-month Treasury
bill rose from 5.22% at the beginning of the reporting period to 6.06% on
February 1, 1995. The yield on the one-year Treasury bill rose from 6.25% at the
beginning of the reporting period to a high of 7.32% in early January, 1995.
February, March, and April, 1995, however, brought economic reports that pointed
to slowing in sectors of the economy, an indication that the rate increases by
the Fed that began in February, 1994, were starting to take hold. As a result,
short-term interest rates declined over this period as market participants
adjusted their expectations regarding the extent of future tightenings by the
Fed. Reflecting this change in expectations, the three-month Treasury bill
declined to 5.87% on April 30, 1995, while the one-year Treasury bill fell to
6.32%, a decline of 1.00% from its high in January, 1995.
Q How have the municipal money markets and the fund's yield reacted to this
interest rate environment?
A Municipal money market rates were affected by the Fed tightenings early in
the reporting period, as well as February's 180-degree change in market
expectations regarding the potential for future Fed rate increases. In
addition, municipal rates were also influenced by seasonal supply and demand
imbalances throughout the reporting period.
Yields on seven-day variable rate demand notes (VRDNs), the core component of a
tax-free money market fund, rose from 3.22% at the beginning of the reporting
period (November 1, 1994) to 4.65% on April 30, 1995. Yield levels also moved
upward for one-year fixed-rate notes, increasing from 4.19% in early November,
1994, to a high of 5.10% in early January, 1995, before steadily falling to
4.29% at the end of the reporting period.
The divergence between short VRDN yields and one-year fixed-rate note levels
resulted from market expectations that the Fed may have successfully engineered
a growth slowdown, or a "soft landing." Also, tight municipal note supply
conditions helped contribute to the decline in fixed note yields.
The fund responded favorably to the overall increase in short-term interest
rates over the reporting period. The 7-day net yield* of the fund's
Institutional Service Shares rose from 2.82% at the
beginning of the reporting period to 3.82% on April 30, 1995. For the fund's
BayFunds Shares, the 7-day net yield* rose from 2.75% at the beginning of the
reporting period to 3.78% on April 30, 1995.
Q What is your overall outlook for rates in the near future?
A Amid reports of a slightly slowing economy and restrained inflation, it
appears that the Fed is nearing the end of its tightening cycle. We would
expect that Fed policy will be neutral in the near term, as the Fed
scrutinizes upcoming releases on the economy and inflation for signs that either
one is stronger than expectations. As such, short-term interest rates should
trade within a range in the near future. Nevertheless, we expect the supply of
fixed-rate notes in our market to increase significantly in mid-June, 1995,
cheapening note levels. We plan on average to extend our maturities during that
period of heavy issuance as yields on fixed-rate notes may become attractive
versus comparable maturity taxable securities.
Q In November of 1994, Moody's Investors Service, Inc. upgraded the
Commonwealth of Massachusetts from A to A1.** At the same time, Standard
and Poor's Ratings Group and Fitch Investors Service, Inc. rated the
Commonwealth A+** with a positive outlook. Please comment on the factors which
have contributed to Massachusetts' improving credit situation.
A The improved credit position of Massachusetts can be attributed to both
budgetary and economic factors.
The Commonwealth has continued along the course of economic recovery that began
in 1992 after a deep regional recession. Massachusetts' economy retains diverse
sources of strength and generates personal income levels among the highest in
the nation. In the post recession period (1992-1994), the Commonwealth's 3.3%
job growth was thirteenth fastest in the nation, and in 1993 the Commonwealth
maintained its personal income per capita position (118% of the national
average) following several years of decline. Recently, like the rest of the
country, Massachusetts has shown signs of slowing economic growth. While
non-farm jobs are still on an upward trend, the rate of growth has slowed to
only 2.4% from November, 1993, to November, 1994. Future economic performance
will hinge on how well the Commonwealth's economy absorbs higher interest rates,
defense procurement cutbacks, and health care industry restructuring.
The Commonwealth closed fiscal year 1994 with a $112 million surplus in its
budgeted operating funds, marking the third consecutive surplus. The
Commonwealth restored fiscal control by following a disciplined spending program
and adhering to reasonable revenue assumptions. For example, in the face of
slower economic growth, the Commonwealth has responsibly reduced tax revenue
estimates for fiscal year 1995. The current estimate of $11,179 million
represents a still-healthy 5.4% increase over last year's tax revenue amount.
The 1995 budget is tightly balanced.
* Past performance does not guarantee future results. Yield will vary.
** Ratings are subject to change.
- --------------------------------------------------------------------------------
Future upgrades are contingent upon Massachusetts' economic performance meeting
or exceeding national averages, continued sound financial operations, and
maintenance of the overall debt burden at current levels.
MASSACHUSETTS MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--100.8%
- --------------------------------------------------------------------------------------
MASSACHUSETTS--99.9%
------------------------------------------------------------------------
$ 3,500,000 Attleboro, MA, 5.00% BANs (Series A), 7/7/1995 NR(4) $ 3,501,886
------------------------------------------------------------------------
2,000,000 Attleboro, MA, 5.25% BANs (Series B), 2/14/1996 NR(4) 2,002,249
------------------------------------------------------------------------
1,250,000 Attleboro, MA, 5.50% BANs (Series B), 2/14/1996 NR(4) 1,253,761
------------------------------------------------------------------------
1,000,000 Boston, MA, Water & Sewer Commission Weekly VRDNs (Series
1985A)/(Dai-Ichi Kangyo Bank Ltd. LOC) VMIG1 1,000,000
------------------------------------------------------------------------
1,000,000 Boston, MA, Water & Sewer Commission Weekly VRDNs (Series
1985A)/(Dai-Ichi Kangyo Bank Ltd. LOC) VMIG1 1,000,000
------------------------------------------------------------------------
1,000,000 Boston, MA, Water & Sewer Commission Weekly VRDNs (Series 1994A)/(State
Street Bank and Trust Co. LOC) VMIG1 1,000,000
------------------------------------------------------------------------
4,950,000 (a)Clipper, MA, Tax Exempt Trust Weekly VRDNs (Series 1993-1)/(State
Street Bank and Trust Co. BPA) VMIG1 4,950,000
------------------------------------------------------------------------
3,200,000 Framingham, MA, IDA Weekly VRDNs (Perin Corp.)/
(Barclays Bank PLC LOC) A-1+ 3,200,000
------------------------------------------------------------------------
2,000,000 Gloucester, MA, 4.33% BANs, 9/22/1995 NR(4) 2,000,221
------------------------------------------------------------------------
3,925,000 Gloucester, MA, 4.50% BANs, 9/22/1995 NR(4) 3,924,726
------------------------------------------------------------------------
1,000,000 Haverhill, MA, 8.875% Bond (Prerefunded), 12/1/1995 NR(1) 1,044,635
------------------------------------------------------------------------
300,000 Ludlow, MA, Weekly VRDNs (Advanced Drainage System, Inc.)/(FNB, Chicago
LOC) P-1 300,000
------------------------------------------------------------------------
1,800,000 (a)Massachusetts Municipal Wholesale Electric Company VRDC Trust, Weekly
VRDNs (Series 1993D)/(AMBAC Insured)/(Hong Kong Shanghai Banking Corp.
BPA) A-1 1,800,000
------------------------------------------------------------------------
4,000,000 Massachusetts Bay Transit Authority, 4.10% CP (Industrial Bank of Japan
Ltd. LOC), Mandatory Tender 5/23/1995 VMIG1 4,000,000
------------------------------------------------------------------------
2,200,000 Massachusetts Bay Transit Authority, 4.10% CP (Series A)/ (ABN AMRO Bank
N.V. LOC), Mandatory Tender 5/15/1995 A-1+ 2,200,000
------------------------------------------------------------------------
3,000,000 Massachusetts GO Refunding Weekly VRDNs (Series 1993A)/(AMBAC
Insured)/(Citibank N.A. BPA) NR(1) 3,000,000
------------------------------------------------------------------------
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
------------------------------------------------------------------------
$ 2,400,000 Massachusetts HEFA Weekly VRDNs (Series E)/(Williams College) A-1+ $ 2,400,000
------------------------------------------------------------------------
3,460,000 Massachusetts HEFA Weekly VRDNs (Newbury College)/ (Barclays Bank PLC
LOC) P-1 3,460,000
------------------------------------------------------------------------
200,000 Massachusetts HEFA Weekly VRDNs (Series A)/(Brigham & Women's
Hospital)/(Sanwa Bank Ltd. LOC) P-1 200,000
------------------------------------------------------------------------
3,410,000 Massachusetts HEFA Weekly VRDNs (Series A)/(New England Home For Little
Wanderers Issue)/(First National Bank of Boston LOC) P-1 3,410,000
------------------------------------------------------------------------
1,200,000 Massachusetts HEFA Weekly VRDNs (Series B)/(Clark University)/(Sanwa
Bank Ltd. LOC) VMIG1 1,200,000
------------------------------------------------------------------------
1,150,000 Massachusetts HEFA Weekly VRDNs (Series E)/(Capital Asset
Program)/(Sanwa Bank Ltd. LOC) A-1+ 1,150,000
------------------------------------------------------------------------
6,300,000 Massachusetts HEFA Weekly VRDNs (Series F)/(Children's Hospital of
Boston) A-1+ 6,300,000
------------------------------------------------------------------------
2,500,000 Massachusetts HEFA Weekly VRDNs (Series G)/(Massachusetts Institute of
Technology) NR(1) 2,500,000
------------------------------------------------------------------------
2,100,000 Massachusetts HEFA, 4.05% CP (Harvard University), Mandatory Tender
7/17/1995 A-1+ 2,100,000
------------------------------------------------------------------------
5,000,000 Massachusetts HEFA, 4.20% CP (Harvard University), Mandatory Tender
5/18/1995 A-1+ 5,000,000
------------------------------------------------------------------------
5,000,000 Massachusetts HEFA, 4.30% CP (Fallon Heathcare System)/ (Sanwa Bank Ltd.
LOC), Mandatory Tender 5/22/1995 A-1+ 5,000,000
------------------------------------------------------------------------
5,500,000 Massachusetts HEFA, 4.65% CP (Series E)/(Tufts University), Mandatory
Tender 5/9/1995 VMIG1 5,500,000
------------------------------------------------------------------------
4,500,000 Massachusetts IFA Daily VRDNs (Series 1994)/(Showa Women's Institute
Boston, Inc.)/(Fuji Bank, Ltd. LOC) VMIG1 4,500,000
------------------------------------------------------------------------
300,000 Massachusetts IFA PCR Weekly VRDNs (Series 1992A)/
(Holyoke Water Power Co.)/(Canadian Imperial Bank of
Commerce LOC) VMIG1 300,000
------------------------------------------------------------------------
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
------------------------------------------------------------------------
$ 1,000,000 Massachusetts IFA Weekly VRDNs (Berkshire School)/ (National Westminster
Bank PLC LOC) VMIG1 $ 1,000,000
------------------------------------------------------------------------
2,500,000 Massachusetts IFA Weekly VRDNs (Kendall Square, Inc.)/ (National
Westminster Bank PLC LOC) A-1+ 2,500,000
------------------------------------------------------------------------
1,300,000 Massachusetts IFA Weekly VRDNs (Groton School)/ (National Westminster
Bank PLC LOC) VMIG1 1,300,000
------------------------------------------------------------------------
1,300,000 Massachusetts IFA Weekly VRDNs (Series 1993B)/(New England Deaconess
Association)/(Banque Paribas LOC) A-1 1,300,000
------------------------------------------------------------------------
6,000,000 Massachusetts IFA Weekly VRDNs (Series 1995)/(Emerson College
Issue)/(Baybanks, Inc. LOC) P-2 6,000,000
------------------------------------------------------------------------
925,000 Massachusetts IFA Weekly VRDNs (Series A)/(Hockomock YMCA)/(Westpac
Banking Corp. LOC) P-1 925,000
------------------------------------------------------------------------
3,000,000 Massachusetts IFA Weekly VRDNs (Series B)/(Williston North Hampton
School)/(National Westminster Bank PLC LOC) A-1+ 3,000,000
------------------------------------------------------------------------
2,000,000 Massachusetts IFA, 4.20% CP (Series 1993A)/(New England Power Co.),
Mandatory Tender 5/31/1995 VMIG1 2,000,000
------------------------------------------------------------------------
1,100,000 Massachusetts IFA, 5.25% TOBs (1991 Issue)/(St. Mark's School of
Southborough, Inc.)/(Barclays Bank PLC LOC), Mandatory Tender 1/9/1996 VMIG1 1,100,000
------------------------------------------------------------------------
2,000,000 Massachusetts State PCR, 4.25% CP (New England Power Co.), Mandatory
Tender 7/24/1995 A-1 2,000,000
------------------------------------------------------------------------
4,500,000 Massachusetts Municipal Wholesale Electric Company Power Supply System
Bonds, Weekly VRDNs (Series 1994C)/(Canadian Imperial Bank of Commerce
LOC) A-1+ 4,500,000
------------------------------------------------------------------------
1,395,000 Needham, MA, 4.00% BANs, 5/26/1995 NR 1,395,415
------------------------------------------------------------------------
3,400,000 New Bedford, MA, 4.75% BANs (Fleet National Bank
Guaranty), 8/11/1995 P-1 3,405,926
------------------------------------------------------------------------
2,330,000 North Andover, MA, 4.10% BANs, 6/29/1995 NR 2,331,634
------------------------------------------------------------------------
2,297,900 North Attleborough, MA, 4.65% BANs, 4/19/1996 NR(3) 2,302,036
------------------------------------------------------------------------
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
------------------------------------------------------------------------
$ 2,335,000 Norwood, MA, IDRB 3.90% TOBs (Dash Realty
Trust)/(Fleet National Bank LOC), Mandatory Tender
7/1/1995 SP-1 $ 2,335,000
------------------------------------------------------------------------
4,550,000 Springfield, MA, 4.75% BANs (Fleet National Bank
Guaranty), 8/4/1995 P-1 4,555,131
------------------------------------------------------------------------
3,500,000 Springfield, MA, 5.10% RANs (Fleet National Bank
Guaranty), 6/30/1995 P-1 3,503,952
------------------------------------------------------------------------
2,927,000 Watertown, MA, 4.25% BANs, 10/12/1995 NR(3) 2,928,901
------------------------------------------------------------------------ --------------
Total 127,580,473
------------------------------------------------------------------------ --------------
PUERTO RICO--0.9%
------------------------------------------------------------------------
1,100,000 Puerto Rico Government Development Bank, Weekly VRDNs (Credit Suisse,
Zurich and Sumitomo Bank Ltd. LOCs) A-1 1,100,000
------------------------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $ 128,680,473
------------------------------------------------------------------------ --------------
</TABLE>
(a) Denotes a restricted security which is 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.
(b) Also represents cost for federal tax purposes.
* See Notes to Portfolio of Investments on page 10.
Note: The categories of investments are shown as a percentage of net assets
($127,683,235) at
April 30, 1995.
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following abbreviation(s) are used throughout this portfolio:
AMBAC-- American Municipal Bond
Assurance Corporation
BANs-- Bond Anticipation Notes
BPA-- Bond Purchase Agreement
CP-- Commercial Paper
GO-- General Obligation
HEFA-- Health and Education Facilities Authority
IDA-- Industrial Development Authority
IDRB-- Industrial Development Revenue Bonds
IFA-- Industrial Finance Authority
LOCs-- Letter(s) of Credit
LOC-- Letter of Credit
PCR-- Pollution Control Revenue
PLC-- Public Limited Company
RANs-- Revenue Anticipation Notes
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 (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P note rating reflects the liquidity concerns and market access risks unique
to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC.
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG
(see below)). The purpose of the MIG or VMIG ratings is to provide investors
with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong protection
by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS)
AND
TENDER OPTION BONDS (TOBS)
RATINGS
STANDARD & POOR'S RATINGS GROUP
S&P assigns dual ratings to all long-term debt issues that have as part of their
provisions a variable rate demand feature. The first rating (long-term rating)
addresses the likelihood of repayment of principal and interest when due, and
the second rating (short-term rating) describes the demand characteristics.
Several examples are AAA/A-1+, AA/A-1+, A/A-1. (The definitions for the long-
term and the short-term ratings are provided below.)
MOODY'S INVESTORS SERVICE, INC.
Short-term ratings on issues with demand features are differentiated by the use
of the VMIG symbol to reflect such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity.
In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the
first representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using the
same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
STANDARD & POOR'S RATINGS GROUP
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC.
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad
margins in earning coverage of fixed financial charges and high internal
cash generation, well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
LONG-TERM DEBT RATINGS
STANDARD & POOR'S RATINGS GROUP
AAA Debt rated "AAA" has the highest rating assigned by S&P. 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.
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 interest and repay principal
for debt in this category than in higher rated categories.
MOODY'S INVESTORS SERVICE, INC.
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 edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
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 which suggest a susceptibility to impairment sometime in the future.
BAA Bonds that 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.
NR indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AAA" by S&P or "Aaa" by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding debt rated
"AA" by S&P or "Aa" Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding debt rated
"A" by S&P or Moody's.
NR(4) The underlying issuer/obligor/guarantor has other outstanding debt rated
"BBB" by S&P or "Baa" by Moody's.
MASSACHUSETTS MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $ 128,680,473
- -------------------------------------------------------------------------------------------------
Cash 364,594
- -------------------------------------------------------------------------------------------------
Income receivable 1,157,083
- -------------------------------------------------------------------------------------------------
Deferred expenses 1,248
- ------------------------------------------------------------------------------------------------- --------------
Total assets 130,203,398
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 2,305,004
- -----------------------------------------------------------------------------------
Payable for shares redeemed 1,000
- -----------------------------------------------------------------------------------
Income distribution payable 182,958
- -----------------------------------------------------------------------------------
Accrued expenses 31,201
- ----------------------------------------------------------------------------------- ------------
Total liabilities 2,520,163
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 127,683,235 shares outstanding $ 127,683,235
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES ($87,755,941 / 87,755,941 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
BAYFUNDS SHARES ($39,927,294 / 39,927,294 shares 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, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 2,484,342
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 326,619
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 76,864
- ---------------------------------------------------------------------------------------
Custodian fees 20,788
- ---------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 30,301
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 1,362
- ---------------------------------------------------------------------------------------
Auditing fees 8,647
- ---------------------------------------------------------------------------------------
Legal fees 6,309
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 17,851
- ---------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 56,594
- ---------------------------------------------------------------------------------------
Share registration costs 11,000
- ---------------------------------------------------------------------------------------
Printing and postage 26,472
- ---------------------------------------------------------------------------------------
Insurance premiums 4,466
- ---------------------------------------------------------------------------------------
Miscellaneous 6,237
- --------------------------------------------------------------------------------------- ----------
Total expenses 593,510
- ---------------------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------------------------
Waiver of investment advisory fee $ 166,005
- ---------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service Shares 56,594 222,599
- --------------------------------------------------------------------------- ---------- ----------
Net expenses 370,911
- --------------------------------------------------------------------------------------------------- ------------
Net investment income $ 2,113,431
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
(UNAUDITED) 1994
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------------
Net investment income $ 2,113,431 $ 2,717,161
- ------------------------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------------
Distributions from net investment income:
- -------------------------------------------------------------------------------
Institutional Service Shares (1,439,688) (2,037,982)
- -------------------------------------------------------------------------------
BayFunds Shares (673,743) (679,179)
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions to shareholders (2,113,431) (2,717,161)
- ------------------------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS
- -------------------------------------------------------------------------------
Proceeds from sale of Shares 176,741,686 349,831,127
- -------------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in
payment of distributions declared 1,128,390 1,275,493
- -------------------------------------------------------------------------------
Cost of Shares redeemed (182,111,733) (321,848,920)
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from Share transactions (4,241,657) 29,257,700
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets (4,241,657) 29,257,700
- -------------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------------
Beginning of period 131,924,892 102,667,192
- ------------------------------------------------------------------------------- --------------- ---------------
End of period $ 127,683,235 $ 131,924,892
- ------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
(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>
SIX MONTHS
ENDED
APRIL 30,
1995 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------
Net investment income 0.02 0.02 0.02 0.03 0.05 0.03
- ----------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------
Distributions from net
investment income (0.02) (0.02) (0.02) (0.03) (0.05) (0.03)
- ---------------------------------------------- ------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- ------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.62% 2.14% 1.99% 2.87% 4.63% 2.59%
- ----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------
Expenses 0.55%(c) 0.55% 0.53% 0.34% 0.30% 0.17%(c)
- ----------------------------------------------
Net investment income 3.26%(c) 2.12% 1.97% 2.82% 4.48% 5.66%(c)
- ----------------------------------------------
Expense waiver/reimbursement (d) 0.38%(c) 0.35% 0.43% 0.55% 0.69% 0.57%(c)
- ----------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------
Net assets, end of period (000 omitted) $87,756 $90,013 $84,524 $85,570 $81,681 $63,483
- ----------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 18, 1990 (date of initial
public investment) to October 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--BAYFUNDS SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
<S> <C> <C> <C>
(UNAUDITED) 1994 1993(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------
Net investment income 0.02 0.02 0.01
- ------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------------
Distributions from net investment income (0.02) (0.02) (0.01)
- ------------------------------------------------------------------------ ------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------ ------- --------- -----------
TOTAL RETURN (B) 1.59% 2.05% 1.25%
- ------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------------
Expenses 0.61%(c) 0.64% 0.65%(c)
- ------------------------------------------------------------------------
Net investment income 3.19%(c) 2.09% 1.85%(c)
- ------------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.25%(c) 0.35% 0.43%(c)
- ------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------
Net assets, end of period (000 omitted) $39,927 $41,912 $18,143
- ------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from March 8, 1993 (date of initial
public investment) to October 31, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of thirteen non-diversified portfolios.
The financial statements included herein present 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 offers two classes of shares: Institutional Service Shares and
BayFunds Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--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 tax-exempt mutual fund that invests nationally. In order to
reduce the credit risk associated with such factors, at April 30, 1995,
60.8% 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 value of investments
insured by or supported (backed) by a letter of credit for any one
institution or agency does not exceed 10.7% of total investments.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In come 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 "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 Act. Additional information on each restricted
security held at April 30, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Clipper, MA, Tax Exempt Trust Weekly VRDNs
(Series 1993-1)/(State Street Bank and Trust
Co. BPA) 1/6/94 $ 4,950,000
Massachusetts Municipal Wholesale Electric
Company VRDC Trust, Weekly VRDNs (Series
1993D)/ (AMBAC Insured)/(Hong Kong Shanghai
Banking Corp. BPA) 6/11/93 $ 1,800,000
</TABLE>
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 not to exceed a period of five
years from the Fund's commencement date.
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, 1995, capital paid-in aggregated $127,683,235.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES 1995 1994
- ---------------------------------------------------------------------------------- -------------- --------------
Shares sold 163,420,299 298,784,520
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 454,079 594,441
- ----------------------------------------------------------------------------------
Shares redeemed (166,131,823) (293,889,923)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service Shares transactions (2,257,445) 5,489,038
- ---------------------------------------------------------------------------------- -------------- --------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
BAYFUNDS SHARES 1995 1994
<S> <C> <C>
- ---------------------------------------------------------------------------------- -------------- --------------
Shares sold 13,321,387 51,046,608
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 674,311 681,051
- ----------------------------------------------------------------------------------
Shares redeemed (15,979,910) (27,958,997)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from BayFunds Shares transactions (1,984,212) 23,768,662
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions (4,241,657) 29,257,700
- ---------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Institutional Service Shares for the
period. Under the terms of a Shareholder Services Agreement with BayBank
Systems, Inc., the Fund will pay BayBank Systems, Inc. up to .25 of 1% of
average daily net assets of the BayFunds Shares for the period. These fees are
to obtain certain services for shareholders and to maintain shareholder
accounts. For the six months ended April 30, 1995, BayFunds Shares did not incur
a Shareholder Services fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. This fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $44,840 and start-up
administrative service expenses of $43,014 were initially borne by the Adviser.
The Fund has agreed to reimburse the Adviser at an annual rate of .005 of 1% and
.01% of 1% of average daily net assets for the organizational and start-up
administrative expenses, respectively, until expenses initially borne by the
Adviser are fully reimbursed or the expiration of five years after May 18, 1990
(the date the Fund became effective), whichever occurs earlier. For the period
ended April 30, 1995, the Fund paid $3,311 and $4,291, respectively, pursuant to
this agreement. During the period, the Fund completed its obligation for
start-up administrative expenses pursuant to this agreement.
INTERFUND TRANSACTIONS--During the six-months ended April 30, 1995, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated advisers), common Directors/Trustees, and/or
common Officers. These transactions were made at current market value pursuant
to Rule 17a-7 under the Act amounting to $74,300,000 and $94,050,000,
respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Richard B. Fisher
Glen R. Johnson Vice President
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Vice President and Treasurer
John E. Murray, Jr. John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
G. Andrew Bonnewell
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
agency. Investment in mutual funds involves investment risk, including possible
loss of
principal. Although money market funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the fund's prospectuses which contain facts concerning its
objective and policies, management fees, expenses and other information.
