PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present your Semi-Annual Report to Shareholders of Alabama
Municipal Cash Trust, a portfolio of Federated Municipal Trust, which covers
the six-month period from November 1, 1995 through April 30, 1996. The report
begins with a discussion with the fund's portfolio manager, followed by a
complete listing of the fund's holdings and its financial statements.
The fund is a convenient way to put your ready cash to work pursuing double-
tax-free income - free from federal regular income tax and Alabama personal
income tax* - through a portfolio concentrated in high-quality, short-term
Alabama municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course,
the fund also brings you the added benefits of daily liquidity and stability
of principal.**
During the report period, the fund paid double-tax-free dividends of $0.02
per share. Its total net assets of $192.1 million were spread among Alabama
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on Alabama Municipal Cash Trust to seek the best tax-free
income opportunities for your cash. As always, we will strive to provide you
with the highest level of professional service. We appreciate your support
and invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An investment in the fund is neither insured nor guaranteed
by the U.S. government.
INVESTMENT REVIEW
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during
the semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50%
to the current 5.25% at the end of January 1996. For the December 1995 move,
the Fed cited a better-than-expected inflation outlook as the impetus behind
the easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed
appeared swayed by the dampening effects of high debt loads and employment
uncertainty on consumer consumption along with sluggish export growth.
Through this period, the short-end of the government and municipal yield
curves anticipated the policy moves from the Fed, and amid signs of a
weakening economy looked forward to additional eases in the not too distant
future.
February and March of 1996, however, brought about a shift in market
psychology regarding both the extent and direction of changes in monetary
policy by the Fed. Recovering from the harsh winter weather and spurred
onward by lower interest rates, the housing market and consumer spending
breathed some life into the economy, which had seemed on the verge of
recession earlier in the year. The market was then stunned in early March
1996 by the report of a 705,000 increase in non-farm payroll jobs for
February 1996 - the largest increase in 12 years - which caused the yields on
short-term securities to rise by as much as 25 basis points. Now confronted
with a more robust economy than previously thought, market participants have
moved expectations toward a more neutral policy from the Fed in the near term
with a possible tightening, or increase in rates, later in 1996.
Yields on short-term government securities reflected this rather volatile
mood in the markets. The yield on the three-month Treasury bill began
November 1995 at 5.48%, declined to 4.89% by mid-February 1996, and ended
April 1996 at 5.14%. Correspondingly, the yield on the one-year Treasury bill
began November 1995 at 5.46%, fell to 4.79% in mid-February 1996, but rose to
5.62% by the end of April 1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to the
municipal money markets. However, because of these imbalances, the fund's
yield may experience more volatility on a weekly basis than Treasury yields
and taxable money fund yields. In general, yields on municipal money market
funds were lower over the period. For the fund, the seven-day net yield on
April 30, 1996 was 3.48% compared to 3.54% six months ago.*
* Past performance does not guarantee future results. Yield will vary.
Q What was your strategy for managing the fund over the semi-annual
reporting period?
A The fund started the reporting period with an average maturity of 50 days,
which is considered neutral. Because of the lack of readily available fixed-
rate notes and bonds in Alabama, and the change in sentiment regarding the
direction of interest rates, we allowed the average maturity to roll inward
over the period to a low of approximately 30 days in early April 1996. At the
end of the period, the average maturity was 38 days, reflecting our
assessment of more neutral to restrictive Fed policy for the balance of 1996.
Q What is your outlook for the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to
be on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel the
urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness
at very high levels, there also appears to be no danger of the economy
overheating in the near term. As long as inflation remains benign, the Fed
should be content to sit on the sidelines until confronted with signs of
undue strength or considerable weakness in economic growth. The average
maturity of the fund will continue to be managed in accordance with our
expectation for a stable monetary policy in the near term. Nevertheless,
opportunities for average maturity extension will arise as the supply of
fixed-rate notes in the municipal market increases significantly in June and
July of 1996. This spike in supply may present opportunities to "lock-in"
yields which are attractive relative to comparable maturity taxable
securities. As a result, we expect the average maturity of the fund to be
slightly longer throughout the summer months.
ALABAMA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-99.5%
ALABAMA-99.0%
$ 865,000 Alabama Industrial Access Road and Bridge Corp.,
Capital Improvement Bonds (Series 1995), 3.70% Bonds, 6/1/1996 A1 $ 865,000
3,000,000 Alabama State IDA Weekly VRDNs (Columbus Mills
Inc. Project)/(SunTrust Bank, Atlanta LOC) P-1 3,000,000
6,750,000 Alabama State IDA Weekly VRDNs (Pine City Fiber
Co.)/(Barclays Bank PLC, London LOC) VMIG1 6,750,000
3,970,000 Alabama State IDA, IDRB (Series 1994) Weekly VRDNs
(Decatur Aluminum Corp.)/(Star Bank, NA,
Cincinnati LOC) P-1 3,970,000
1,800,000 Alabama State IDA, IDRB Weekly VRDNs (Monarch
Tile, Inc. Project)/(Nationsbank of Texas, NA LOC) P-1 1,800,000
3,350,000 Alabama State IDA, Industrial Revenue Bonds Weekly
VRDNs (Kappler USA, Inc. Project)/(National Bank of
Canada, Montreal LOC) P-1 3,350,000
5,600,000 Alabama State IDA, Revenue Bonds Weekly VRDNs
(Southern Bag Corporation, Ltd.)/(SouthTrust Bank of
Alabama, Birmingham LOC) P-1 5,600,000
1,245,000 Alabama State Public School & College Authority,
Capital Improvement Bonds (Series 1996), 4.50% Bonds,
11/1/1996 Aa 1,251,689
7,500,000 Alabama State, UT GO Refunding Bonds, 5.35% Bonds,
9/1/1996 AA 7,537,524
3,650,000 Arab, AL IDB, (Series 1989) Weekly VRDNs (SCI
Manufacturing, Inc.)/(Bank of Tokyo-Mitsubishi LTD.
LOC) A-1 3,650,000
1,100,000 Arab, AL IDB, Revenue Refunding Bonds (Series 1989)
Weekly VRDNs (SCI Manufacturing, Inc.)/(Bank of
Tokyo-Mitsubishi LTD. LOC) A-1 1,100,000
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
ALABAMA-CONTINUED
$ 1,750,000 Ashland, AL IDB, (Series 1996) Weekly VRDNs
(Tru-Wood Cabinets)/(First Alabama Bank,
Birmingham LOC) P-1 $ 1,750,000
2,000,000 Birmingham, AL IDA Weekly VRDNs (Altec Industries,
Inc.)/(Wachovia Bank of Georgia NA, Atlanta LOC) P-1 2,000,000
1,810,000 Birmingham, AL IDA Weekly VRDNs (Glasforms,
Inc.)/(First Alabama Bank, Birmingham LOC) P-1 1,810,000
1,000,000 Birmingham, AL IDA, Revenue Refunding Bonds
Weekly VRDNs (S.P. Hotel Company)/(Amsouth Bank
NA, Birmingham LOC) VMIG1 1,000,000
535,000 Birmingham, AL Waterworks & Sewer Board, Water
and Sewer Revenue Bonds (Series 1996), 3.40% Bonds,
1/1/1997 AA 535,000
1,940,000 Birmingham-Carraway, AL Special Care Facilities
Financing Authority, Revenue bonds (Series 1995-A),
4.25% Bonds (Carraway Methodist Health Systems)/
(CONNIE LEE INS), 8/15/1996 AAA 1,943,818
1,880,000 Calhoun County, AL Economic Development Council
Weekly VRDNs (Food Ingredients Tech. Co.)/
(Nationsbank, NA (North Carolina) LOC) P-1 1,880,000
4,310,000 Chatom, AL, (National Rural Utilities Series 1984M),
3.10% TOBs (Alabama Electric Co-op, Inc.)/(National
Rural Utilities Cooperative Finance Corp. GTD),
Optional Tender 8/15/1996 A-1+ 4,310,000
6,000,000 Chatom, AL, IDB PCR, 3.40% CP (Alabama Electric
Co-op, Inc.)/(National Rural Utilities Cooperative
Finance Corp. GTD), Mandatory Tender 5/22/1996 A-1+ 6,000,000
2,000,000 Cherokee, AL IDB, IDR Refunding Bonds (Series 1993)
Weekly VRDNs (BOC Group, Inc.)/(Wachovia Bank of
Georgia NA, Atlanta LOC) A-1+ 2,000,000
520,000 Dothan, AL, GO Refunding Warrants (Series 1995),
3.85% BANs (AMBAC INS), 9/1/1996 Aaa 520,000
5,000,000 Eutaw, AL IDB Weekly VRDNs (Mississippi Power
Co.)/(Mississippi Power Co. GTD) VMIG1 5,000,000
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
ALABAMA-CONTINUED
$ 1,400,000 Fairfield, AL IDA, Variable Rate Environmental
Improvement Revenue Bonds (Series 1995), 3.55% TOBs
(USX Corp.)/(Wachovia Bank of NC, NA,
Winston-Salem LOC), Mandatory Tender 5/1/1996 VMIG1 $ 1,400,000
1,730,000 Fort Payne, AL IDB, IDRB Weekly VRDNs
(Ovalstrapping, Inc.)/(U.S. Bank of Washington
NA LOC) P-1 1,730,000
4,000,000 Guntersville, AL IDB, (Series 1995) Weekly VRDNs
(Hercules Rubber Co. Project)/(SouthTrust Bank of
Alabama, Birmingham LOC) P-1 4,000,000
3,915,000 Hoover, AL IDA Weekly VRDNs (Bud's Best Cookies,
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 3,915,000
260,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project
(Huntsville, AL))/(First Alabama Bank, Birmingham
LOC) A-1+ 260,000
1,715,000 Ider, AL IDB, Industrial Development Bonds Weekly
VRDNs (Galbreath, Inc. Proj.)/(National Bank of
Canada, Montreal LOC) P-1 1,715,000
2,500,000 Jefferson County, AL, GO Warrants (Series 1996) Weekly
VRDNs (Bayerische Landesbank Girozentrale LOC) A-1+ 2,500,000
2,300,000 Jefferson County, AL, Sewer Revenue Warrants (Series
1995-A) Weekly VRDNs (Bayerische Landesbank
Girozentrale LOC) A-1+ 2,300,000
3,900,000 Limestone County, AL Water Authority, Water Revenue
Bonds, 7.875% Bonds (United States Treasury PRF),
5/15/1996 (@103) Aaa 4,022,807
3,500,000 Lowndes County, AL IDB, (Series 1996) Weekly VRDNs
(Warren Oil Company Project)/(First Union National
Bank, Charlotte, NC LOC) A-1 3,500,000
1,425,000 Marshall County, AL, Special Obligation School
Refunding Warrant (Series 1994) Weekly VRDNs
(Marshall County, AL Board of Education)/(First
Alabama Bank, Birmingham LOC) A-1+ 1,425,000
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
ALABAMA-CONTINUED
$ 885,000 Mobile County, AL Board of School Commissioners,
Capital Outlay Warrants (Series 1996), 4.75% Bonds
(AMBAC INS), 3/1/1997 Aaa $ 895,044
2,540,000 Mobile, AL Downtown Redevelopment Authority,
(Series 1992), 4.15% TOBs (Mitchell Project)/(SunTrust
Bank, Atlanta LOC), Mandatory Tender 7/31/1996 P-1 2,540,000
14,600,000 Mobile, AL IDB, 3.65% TOBs (International Paper Co.)/
(International Paper Co. GTD), Optional Tender
10/15/1996 A-2 14,600,000
7,885,000 Mobile, AL IDB, IDRB (Series 1989) Weekly VRDNs
(Newark Group Industries, Inc.)/(First Fidelity Bank,
NA, New Jersey LOC) VMIG1 7,885,000
1,000,000 Mobile, AL IDB, Pollution Control Refunding Revenue
Bonds, (Series 1992) Weekly VRDNs (Air Products &
Chemicals, Inc.)/(Air Products & Chemicals, Inc. GTD) A-1 1,000,000
4,275,000 Mobile, AL Port City Medical Clinic Board, Revenue
Bonds (Series 1992-A), 4.15% CP (Mobile, AL Infirmiary
Association)/(Fuji Bank, Ltd., Tokyo LOC), Mandatory
Tender 5/29/1996 VMIG1 4,275,000
455,000 Mobile, AL, General Obligations Warrants, 4.25% Bonds,
8/15/1996 NR(3) 455,000
3,000,000 Montgomery - Wynlakes Governmental Utility Services
Corp., Bonds (Series 1995-A) Weekly VRDNs (Vaughn
Road, L.L.C., Project)/(Amsouth Bank NA,
Birmingham LOC) VMIG1 3,000,000
1,000,000 Montgomery, AL IDB, (Series 1988A) Weekly VRDNs
(Smith Industries)/(SunTrust Bank, Atlanta LOC) A-1 1,000,000
2,765,000 Montgomery, AL IDB, (Series 1990-A) Weekly VRDNs
(Industrial Partners)/(Wachovia Bank of Georgia NA,
Atlanta LOC) VMIG1 2,765,000
3,650,000 Montgomery, AL IDB, Industrial Development Revenue
Bonds (Series 1996A) Weekly VRDNs (Jobs Company,
L.L.C. Project)/(Columbus Bank and Trust Co.,
GA LOC) P-1 3,650,000
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
ALABAMA-CONTINUED
$ 500,000 Mountain Brook, AL, G O Warrants (Series 1996),
3.20% Bonds, 12/1/1996 NR $ 500,000
5,500,000 Pelham, AL Governmental Utility Services Corp.,
Wastewater Treatment and Collection Revenue Bonds
(Series 1985), 9.25% Bonds (Parsons Pelham Associates
Project)/(FGIC INS), 6/1/1996 (@102) Aaa 5,634,371
5,700,000 Phoenix City, AL IDB, (Series 1988), 3.25% CP (Mead
Coated Board)/(ABN AMRO Bank NV, Amsterdam
LOC), Mandatory Tender 5/8/1996 VMIG1 5,700,000
3,000,000 Phoenix City, AL IDB, (Series 1988), 3.25% CP (Mead
Coated Board)/(ABN AMRO Bank NV, Amsterdam
LOC), Mandatory Tender 5/9/1996 P-1 3,000,000
890,000 Piedmont, AL IDB Weekly VRDNs (Industrial Partners)/
(Wachovia Bank of Georgia NA, Atlanta LOC) P-1 890,000
2,500,000 Prattville, AL IDB, IDR Bonds Weekly VRDNs (Kuhnash
Properties/Arkay Plastics Project)/(PNC Bank, Ohio,
NA LOC) P-1 2,500,000
3,600,000 Scottsboro, AL IDB, (Series 1994) Weekly VRDNs
(Maples Industries, Inc.)/(Amsouth Bank NA,
Birmingham LOC) P-1 3,600,000
1,500,000 Scottsboro, AL IDB, IDRB (Series 1991) Weekly VRDNs
(Maples Industries, Inc.)/(Amsouth Bank NA,
Birmingham LOC) P-1 1,500,000
7,575,000 St. Clair County, AL IDB, (Series 1993) Weekly VRDNs
(Ebsco Industries, Inc.)/(National Australia Bank, Ltd.,
Melbourne LOC) A-1+ 7,575,000
4,000,000 Stevenson, AL IDB Daily VRDNs (Mead Corporation
Project)/(Societe Generale, Paris LOC) A-1+ 4,000,000
4,500,000 Stevenson, AL IDB, Industrial Revenue Bonds (Series
1996-A) Weekly VRDNs (Unitog Co.)/(UMB Bank,
NA LOC) A-1 4,500,000
5,800,000 Sumter County, AL IDA, Industrial Revenue Bonds
(Series 1995A) Weekly VRDNs (Fulghum Fibres Project
(AL))/(First Alabama Bank, Birmingham LOC) P-1 5,800,000
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
ALABAMA-CONTINUED
$ 1,200,000 Sumter County, AL IDA, Industrial Revenue Bonds
(Series 1995B) Weekly VRDNs (Canal Chip Project)/
(First Alabama Bank, Birmingham LOC) P-1 $ 1,200,000
795,000 Sylacuaga, AL IDB Monthly VRDNs (SouthTrust Bank
of Alabama, Birmingham LOC) P-1 795,000
2,000,000 Tuscaloosa County, AL, General Obligation Warrants
(Series 1996), 3.55% Bonds, 1/1/1997 AA- 2,000,000
2,000,000 Tuskegee, AL IDB, IDRB (Series 1995) Weekly VRDNs
(Concrete Company (The))/(Columbus Bank and
Trust Co., GA LOC) P-1 2,000,000
2,550,000 Vincent, AL IDB, (Series 1993) Weekly VRDNs (Ebsco
Industries, Inc.)/(National Australia Bank, Ltd.,
Melbourne LOC) A-1+ 2,550,000
Total 190,200,253
PUERTO RICO-0.5%
1,000,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 1983A), 3.75% TOBs (Reynolds Metals Co.)/
(ABN AMRO Bank NV, Amsterdam LOC), Optional
Tender 9/1/1996 A-1+ 1,000,000
TOTAL INVESTMENTS AT AMORTIZED COST(A) $ 191,200,253
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 56.4% of the
portfolio as calculated based upon total portfolio market value.
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
Note: The categories of investments are shown as a percentage of net
assets ($192,122,326) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
AMBAC -American Municipal Bond Assurance Corporation
BANs -Bond Anticipation Notes
CP -Commercial Paper
FGIC -Financial Guaranty Insurance Company
GO -General Obligation
GTD -Guaranty
IDA -Industrial Development Authority
IDB -Industrial Development Bond
IDR -Industrial Development Revenue
IDRB -Industrial Development Revenue Bond
INS -Insured
LOC -Letter of Credit
PCA -Pollution Control Authority
PCR -Pollution Control Revenue
PLC -Public Limited Company
PRF -Prerefunded
TOBs -Tender Option Bonds
UT -Unlimited Tax
VRDNs -Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
Statement of Assets and Liabilities
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 191,200,253
Cash 225,130
Income receivable 1,215,352
Deferred expenses 24,492
Total assets 192,665,227
LIABILITIES:
Income distribution payable $ 525,334
Accrued expenses 17,567
Total liabilities 542,901
Net Assets for 192,122,326 shares outstanding $ 192,122,326
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$192,122,326 / 192,122,326 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,779,627
EXPENSES:
Investment advisory fee $ 498,514
Administrative personnel and services fee 75,394
Custodian fees 14,660
Transfer and dividend disbursing agent fees and expenses 14,301
Directors'/Trustees' fees 1,108
Auditing fees 4,624
Legal fees 876
Portfolio accounting fees 27,158
Shareholder services fee 249,257
Share registration costs 16,892
Printing and postage 7,020
Insurance premiums 2,794
Taxes 30
Miscellaneous 6,840
Total expenses 919,468
Waivers-
Waiver of investment advisory fee $ (301,785)
Waiver of shareholder services fee (65,075)
Total waivers (366,860)
Net expenses 552,608
Net investment income $ 3,227,019
</TABLE>
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS-
Net investment income $ 3,227,019 $ 5,893,328
DISTRIBUTIONS TO SHAREHOLDERS-
Distributions from net investment income (3,227,019) (5,893,328)
SHARE TRANSACTIONS-
Proceeds from sale of shares 434,742,607 826,956,278
Net asset value of shares issued to shareholders in payment of
distributions declared 1,363,724 2,071,166
Cost of shares redeemed (453,474,434) (762,340,876)
Change in net assets resulting from share transactions (17,368,103) 66,686,568
Change in net assets (17,368,103) 66,686,568
NET ASSETS:
Beginning of period 209,490,429 142,803,861
End of period $ 192,122,326 $ 209,490,429
</TABLE>
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1996 1995 1994(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 0.04 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.04) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.61% 3.66% 2.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.48% 0.36%*
Net investment income 3.24%* 3.59% 2.67%*
Expense waiver/reimbursement(c) 0.37%* 0.44% 0.62%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $192,122 $209,490 $142,804
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and
net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Alabama Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
The investment objective of the Fund is current income exempt from federal
regular income tax and the income tax imposed by the State of Alabama
consistent with stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS-The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under
the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS-Interest income and
expenses are accrued daily. Bond premium and discount, if applicable,
are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-
dividend date.
FEDERAL TAXES-It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of its income.
Accordingly, no provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS-The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-
issued securities on the trade date and maintains security positions
such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
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 over a period of five
years from the Fund's commencement 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, 1996, 93.1% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of
various financial institutions and financial guaranty assurance
agencies. The value of investments insured by or supported (backed) by
a letter of credit from any one institution or agency did not exceed
7.6% of total investments.
ALABAMA MUNICIPAL CASH TRUST
USE OF ESTIMATES-The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts of assets,
liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimated.
OTHER-Investment transactions are accounted for on the trade date.
3. 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, 1996, capital paid-in aggregated $192,122,326.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
1996 1995
<S> <C> <C>
Shares sold 434,742,607 826,956,278
Shares issued to shareholders in payment of distributions declared 1,363,724 2,071,166
Shares redeemed (453,474,434) (762,340,876)
Net change resulting from share transactions (17,368,103) 66,686,568
</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 0.50% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive any portion of its
fee and/or reimburse 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is based
on the level of average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE-Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will
pay FSS up to 0.25% of daily average net assets of the Fund for the
period. The fee paid to Federated Shareholder Services is used to
finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee.
Federated Shareholder Services can modify or terminate this voluntary
waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-FServ,
through its subsidiary, Federated Shareholder Services Company, serves
as transfer and dividend disbursing agent for the Fund. The fee paid
to FServ is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES-FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES-Organizational expenses of $26,461 and start-
up administrative service expenses of $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 effective date. For the period ended April 30,
1996, the Fund paid $2,573 and $3,038 respectively, pursuant to this
agreement.
INTERFUND TRANSACTIONS-During the period ended April 30, 1996, the
Fund engaged in purchase and sale transactions with funds that have a
common investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7
under the Act amounting to $235,185,000 and $235,956,000,
respectively.
GENERAL-Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
<S> <S>
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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
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.
ALABAMA MUNICIPAL CASH TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1996
[GRAPHIC]
Cusip 314229790
G01120-01 (6/96)
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,
which covers the six-month period from November 1, 1995, through April 30,
1996. The report begins with a discussion with the fund's portfolio manager,
followed by a complete listing of the fund's holdings and its financial
statements.
The fund is a convenient way to put your ready cash to work pursuing triple-
tax-free income - free from federal regular income tax and North Carolina
income tax* - through a portfolio concentrated in high-quality, short-term
North Carolina municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course,
the fund also brings you the added benefits of daily liquidity and stability
of principal.**
During the report period, the fund paid triple-tax-free dividends of $0.02
per share. Its total net assets of $117.8 million were spread among North
Carolina securities that use municipal bond financing for projects as varied
as health care, housing, community development, and transportation.
You can count on North Carolina Municipal Cash Trust to seek the best tax-
free income opportunities for your cash investment needs. As always, we will
strive to provide you with the highest level of professional service. We
invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50%
to the current 5.25% at the end of January 1996. For the December 1995
move, the Fed cited a better-than-expected inflation outlook as the impetus
behind the easing, although a sluggish manufacturing sector and lackluster
consumer spending was thought to have had an influence. In January 1996,
the Fed appeared swayed by the dampening effects of high debt loads and
employment uncertainty on consumer consumption along with sluggish export
growth. Through this period, the short-end of the government and municipal
yield curves anticipated the policy moves from the Fed, and amid signs of a
weakening economy looked forward to additional eases in the not too distant
future.
February and March of 1996, however, brought about a shift in market
psychology regarding both the extent and direction of changes in monetary
policy by the Fed. Recovering from the harsh winter weather and spurred
onward by lower interest rates, the housing market and consumer spending
breathed some life into the economy, which had seemed on the verge of
recession earlier in the year. The market was then stunned in early March
1996 by the report of a 705,000 increase in non-farm payroll jobs for
February 1996 - the largest increase in 12 years - which caused the yields
on short-term securities to rise by as much as 25 basis points. Now
confronted with a more robust economy than previously thought, market
participants have moved expectations toward a more neutral policy from the
Fed in the near term with a possible tightening, or increase in rates,
later in 1996.
Yields on short-term government securities reflected this rather volatile
mood in the markets. The yield on the three-month Treasury bill began
November 1995 at 5.48%, declined to 4.89% by mid-February 1996, and ended
April 1996 at 5.14%. Correspondingly, the yield on the one-year Treasury
bill began November 1995 at 5.46%, fell to 4.79% in mid-February 1996, but
rose to 5.62% by the end of April 1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the period. For the fund, the seven-day net
yield of the shares on April 30, 1996 was 3.44% compared to 3.47% six
months earlier.*
* Past performance does not guarantee future results. Yield will vary.
Q What was your strategy for managing the fund over the semi-annual reporting
period?
A The fund started the reporting period with an average maturity of 50 days,
reflecting a neutral to bullish outlook on the direction of interest rates.
Our bias over the period was to extend the average maturity of the fund, a
task made more difficult due to asset growth over the period and low supply
of available fixed-rate notes and bonds. As a result, the fund's average
maturity generally ranged from 40 to 50 days during the six-month reporting
period. By April 30, 1996, the average maturity was 45 days, reflecting our
assessment of more neutral to restrictive Fed policy for the balance of
1996.
Q What is your outlook for the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however,
with areas of softness in the economy still evident and with consumer
indebtedness at very high levels, there also appears to be no danger of the
economy overheating in the near term. As long as inflation remains benign,
the Fed should be content to sit on the sidelines until confronted with
signs of undue strength or considerable weakness in economic growth. The
average maturity of the fund will continue to be managed in accordance with
our expectation for a stable monetary policy in the near term.
Nevertheless, opportunities for average maturity extension will arise as
the supply of fixed-rate notes in the municipal market increases
significantly in June and July of 1996. This spike in supply may present
opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
NORTH CAROLINA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-101.4%
NORTH CAROLINA-96.4%
$1,755,000 Alamance County, NC Industrial Facilities Authority,
(Series B) Weekly VRDNs (Culp, Inc.)/(Wachovia Bank
of NC, NA, Winston-Salem LOC) P-1 $ 1,755,000
7,200,000 Bladen County, NC Industrial Facilities & Pollution
Control Financing Authority, (Series 1993) Weekly
VRDNs (BCH Energy, Limited Partnership)/(Bank of
Tokyo-Mitsubishi LTD. LOC) VMIG1 7,200,000
1,600,000 Buncombe County, NC Industrial Facilities & Pollution
Control Financing Authority, (Series 1991) Weekly
VRDNs (Rich Mount, Inc.)/(Bank of Tokyo-Mitsubishi
LTD. LOC) A-1 1,600,000
1,250,000 Buncombe County, NC Metropolitan Sewer District,
(Series A), 7.875% Bonds (United States Treasury PRF),
7/1/1996 (@102) Aaa 1,284,732
1,695,000 Burke County, NC Industrial Facilities & Pollution
Control Financing Authority Weekly VRDNs (Norwalk
Furniture Corp & Hickory Furniture)/(Branch Banking
& Trust Co, Wilson LOC) P-1 1,695,000
910,000 Catawba County, NC Industrial Facilities & Pollution
Control Financing Authority, (Series 1992) Weekly
VRDNs (WSMP, Inc.)/(Nationsbank, N.A. (North
Carolina) LOC) A-1 910,000
4,600,000 Catawba County, NC Industrial Facilities & Pollution
Control Financing Authority, (Series 1994) Weekly
VRDNs (Ethan Allen Inc. Project)/(Bankers Trust Co.,
New York LOC) P-1 4,600,000
2,435,000 Charlotte, NC, UT GO, 5.50% Bonds, 5/1/1997 Aaa 2,478,392
4,036,556 (a)Charlotte-Mecklenburg Hospital Authority, NC, Loan
Participation Certificates (1995) VRNs, 5/22/1996 NR(2) 4,036,556
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-CONTINUED
NORTH CAROLINA-CONTINUED
$3,865,000 Cleveland County, NC Industrial Facilities and Pollution
Control Financing Authority, IDRB (Series 1990) Weekly
VRDNs (MetalsAmerica, Inc. Project)/(Nationsbank,
N.A. (North Carolina) LOC) P-1 $ 3,865,000
1,670,000 Cleveland County, NC Industrial Facilities and Pollution
Control Financing Authority, Pollution Control Revenue
Bonds (Series 1995) Weekly VRDNs (Grover Industries,
Inc. Project)/(Bank of America Illinois LOC) P-1 1,670,000
965,000 Davidson County, NC Industrial Facilities & PCFA,
IDRB (Series 1995) Weekly VRDNs (Lawrence Industries,
Inc. Project)/(Branch Banking & Trust Co, Wilson LOC) P-1 965,000
2,688,000 Enfield, NC, 3.50% BANs, 8/21/1996 NR 2,688,799
1,800,000 Guilford County, NC Industrial Facilities & PCFA,
(Series 1989) Weekly VRDNs (Bonset America Corp.)/
(Dai-Ichi Kangyo Bank Ltd., Tokyo and Industrial Bank
of Japan Ltd., Tokyo LOCs) A-1 1,800,000
1,000,000 Guilford County, NC Industrial Facilities & PCFA,
(Series 1989) Weekly VRDNs (Culp, Inc.)/(Wachovia
Bank of NC, NA, Winston-Salem LOC) P-1 1,000,000
9,025,000 Halifax County, NC Industrial Facilities & PCFA Weekly
VRDNs (Flambeau Airmold Project)/(Norwest Bank
Minnesota, Minneapolis LOC) P-1 9,025,000
1,000,000 Iredell County, NC Industrial Facilities & Pollution
Control Financing Authority, Industrial Revenue Bonds
Weekly VRDNs (Jet Corr, Inc. Project)/(National Bank
of Canada, Montreal LOC) P-1 1,000,000
1,000,000 Johnson County, NC Industrial Facilities & Pollution
Control Financing Authority, (Series 1996) Weekly
VRDNs (Inolex Chemical Company Project)/(PNC Bank,
N.A. LOC) P-1 1,000,000
3,000,000 Lincoln County, NC Industrial Facilities & Pollution
Control Financing Authority, Industrial Revenue Bonds
Weekly VRDNs (Leucadia, Inc. Project)/(National Bank
of Canada, Montreal LOC) P-1 3,000,000
</TABLE>
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 Mecklenberg County, NC Industrial Facilities and
Pollution Control Financing Authority, (Series 1996)
Weekly VRDNs (SteriGenics International Project)/
(Comerica Bank, Detroit, MI LOC) A-1 $ 2,500,000
2,000,000 Mecklenberg County, NC Industrial Facility & PCFA
Weekly VRDNs (Manhasset Bay Associates)/(Bank of
Tokyo-Mitsubishi LTD. LOC) A-1 2,000,000
1,000,000 Mecklenburg County, NC, (Series 1996) Weekly VRDNs
(YMCA of Greater Charlotte Project)/(Wachovia Bank
of NC, NA, Winston-Salem LOC) P-1 1,000,000
1,000,000 Morrisville, NC, GO UT, 3.35% BANs, 6/26/1996 NR 1,000,229
2,000,000 New Hanover County, NC PCFA Weekly VRDNs
(Efson, Inc.)/(Branch Banking & Trust Co, Wilson
LOC) P-1 2,000,000
1,555,000 New Hanover County, NC PCFA, (Series 1990),
4.15% TOBs (Wilmington Machinery Inc. Project)/
(Branch Banking & Trust Co, Wilson LOC),
Optional Tender 9/1/1996 P-1 1,555,000
5,000,000 North Carolina Eastern Municipal Power Agency,
3.65% CP (Industrial Bank of Japan Ltd., Tokyo
LOC), Mandatory Tender 5/13/1996 P-1 5,000,000
4,000,000 North Carolina Eastern Municipal Power Agency,
3.70% CP (Industrial Bank of Japan Ltd., Tokyo
LOC), Mandatory Tender 5/13/1996 P-1 4,000,000
2,000,000 North Carolina Eastern Municipal Power Agency,
Refunding Revenue Bonds (Series A), 7.50% Bonds
(United States Treasury PRF), 1/1/1997 (@102) Aaa 2,093,834
4,000,000 North Carolina State, Clean Water Bonds, (Series
1995B), 4.25% Bonds, 6/1/1996 Aaa 4,002,130
1,500,000 Onslow County, NC Industrial Facilities &
Pollution Control Financing Authority Weekly
VRDNs (Mine Safety Appliances Co.)/(Sanwa
Bank Ltd, Osaka LOC) A-1 1,500,000
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-CONTINUED
NORTH CAROLINA-CONTINUED
$3,600,000 Orange County, NC Industrial Facilities &
Pollution Control Financing Authority Weekly
VRDNs (Mebane Packaging Corp)/(First Union
National Bank, Charlotte, NC LOC) A-1+ $ 3,600,000
1,300,000 Piedmont, NC Airport Authority Weekly VRDNs
(Triad International Maintenance Corp.)/(Mellon
Bank NA, Pittsburgh LOC) P-1 1,300,000
2,100,000 Randolph County, NC IDA, (Series 1990) Weekly
VRDNs (Wayne Steel, Inc.)/(Bank One, Akron,
NA LOC) P-1 2,100,000
3,400,000 Richmond County, NC Industrial Facilities &
Pollution Control, (Series 1991) Weekly VRDNs
(Bibb Company)/(Citibank NA, New York LOC) A-1 3,400,000
2,400,000 Rutherford County, NC, Industrial Facilities
Pollution Control Financing Authority Weekly
VRDNs (Spring-Ford Knitting Co.)/(Branch
Banking & Trust Co, Wilson LOC) P-1 2,400,000
1,000,000 University of North Carolina at Chapel Hill, 4.00%
Bonds, 8/1/1996 AA 1,000,486
5,700,000 Wake County, NC Industrial Facilities & PCFA,
(Series 1990B), 3.70% CP (Carolina Power & Light
Co.)/(Fuji Bank, Ltd., Tokyo LOC), Mandatory
Tender 5/14/1996 P-1 5,700,000
3,000,000 Wake County, NC Industrial Facilities & PCFA,
(Series 1990B), 3.75% CP (Carolina Power & Light
Co.)/(Fuji Bank, Ltd., Tokyo LOC), Mandatory
Tender 6/20/1996 P-1 3,000,000
4,400,000 Wake County, NC, UT GO, 4.25% Bonds, 3/1/1997 Aaa 4,443,315
2,000,000 Washington County, NC Industrial Facilities and
Pollution Control Financing Authority, IDRB
(Series 1995) Weekly VRDNs (Mackeys Ferry
Sawmill, Inc. Project)/(Wachovia Bank of NC, NA,
Winston-Salem LOC) Aa2 2,000,000
4,013,220 Wayne County, NC PCFA Weekly VRDNs (Cooper
Industries, Inc.)/(Sanwa Bank Ltd, Osaka LOC) A-1+ 4,013,220
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES-CONTINUED
NORTH CAROLINA-CONTINUED
$2,300,000 Wilson County, NC PCA, (Series 1994) Weekly
VRDNs (Granutec, Inc.)/(Branch Banking & Trust
Co, Wilson LOC) P-1 $ 2,300,000
Total 113,481,693
PUERTO RICO-2.5%
3,000,000 Puerto Rico Industrial, Medical & Environmental
PCA, (Series 1983A), 3.75% TOBs (Reynolds Metals
Co.)/(ABN AMRO Bank NV, Amsterdam LOC),
Optional Tender 9/1/1996 A-1+ 3,000,000
VIRGIN ISLANDS-2.5%
3,000,000 Virgin Islands HFA, Single Family Mortgage
Revenue Refunding Bonds (1995 Series B), 3.50%
TOBs (FGIC INS), Mandatory Tender 11/1/1996 VMIG1 3,000,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 119,481,693
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 54.1% of the
portfolio as calculated based upon total portfolio market value.
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1996, these securities
amounted to $4,036,556 which represents 3.4% of net assets.
(b) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
Note: The categories of investments are shown as a percentage of net assets
($117,837,305) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
BANs - Bond Anticipation Notes
CP - Commercial Paper
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IDRB - Industrial Development Revenue Bond
INS - Insured
LOCs - Letter(s) of Credit
LOC - Letter of Credit
LTD - Limited
PCA - Pollution Control Authority
PCFA - Pollution Control Finance Authority
PRF - Prerefunded
TOBs - Tender Option Bonds
UT - Unlimited Tax
VRDNs - Variable Rate Demand Notes
VRNs - Variable Rate Notes
(See Notes which are an integral part of the Financial Statements)
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 119,481,693
Cash 477,978
Income receivable 668,613
Deferred expenses 24,556
Total assets 120,652,840
LIABILITIES:
Payable for investments purchased $ 2,489,180
Income distribution payable 314,347
Accrued expenses 12,008
Total liabilities 2,815,535
Net Assets for 117,837,305 shares outstanding $ 117,837,305
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$117,837,305/117,837,305 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 2,117,270
EXPENSES:
Investment advisory fee $ 276,596
Administrative personnel and services fee 62,246
Custodian fees 10,161
Transfer and dividend disbursing agent fees and expenses 7,612
Directors'/Trustees' fees 914
Auditing fees 4,358
Legal fees 634
Portfolio accounting fees 20,522
Shareholder services fee 138,298
Share registration costs 19,046
Printing and postage 6,072
Insurance premiums 2,366
Miscellaneous 5,438
Total expenses 554,263
Waivers -
Waiver of investment advisory fee (225,445)
Net expenses 328,818
Net investment income $ 1,788,452
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS -
Net investment income $ 1,788,452 $ 3,716,494
DISTRIBUTIONS TO SHAREHOLDERS -
Distributions from net investment income (1,788,452) (3,716,494)
SHARE TRANSACTIONS -
Proceeds from sale of shares 414,748,919 901,368,780
Net asset value of shares issued to shareholders in payment
of distributions declared 1,122,908 2,529,218
Cost of shares redeemed (395,636,469) (891,545,071)
Change in net assets resulting from share transactions 20,235,358 12,352,927
Change in net assets 20,235,358 12,352,927
NET ASSETS:
Beginning of period 97,601,947 85,249,020
End of period $ 117,837,305 $ 97,601,947
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NORTH CAROLINA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995 1994(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 0.04 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.04) (0.02)
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
TOTAL RETURN(B) 1.63% 3.51% 2.06%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.59%* 0.59% 0.49%*
Net investment income 3.23%* 3.46% 2.54%*
Expense waiver/reimbursement(c) 0.41%* 0.40% 0.44%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $117,837 $97,602 $85,249
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NORTH CAROLINA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of North Carolina Municipal Cash
Trust (the "Fund"), a non-diversified portfolio. The financial statements of
the other portfolios are presented separately. The assets of each portfolio
are segregated and a shareholder's interest is limited to the portfolio in
which shares are held.
The investment objective of the Fund is current income exempt from federal
regular income tax and the income tax imposed by the State of North Carolina
consistent with stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS-The Trust'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.
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 over a period of five
years from the Fund's commencement 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, 1996, 77% of the securities in the portfolio of investments
are backed by letters of credit or bond insurance of various financial
institutions and financial guaranty assurance agencies. The value of
investments insured by or supported (backed) by a letter of credit
from any one institution or agency did not exceed 9% of total
investments.
NORTH CAROLINA 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 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,
1996 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Charlotte-Mecklenburgh Hospital Authority,
NC, Loan Participation Certificates (1995) 6/30/95 $4,036,556
</TABLE>
USE OF ESTIMATES-The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts of assets,
liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimated.
OTHER-Investment transactions are accounted for on the trade date.
3. 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, 1996, capital paid-in aggregated $117,837,305. Transactions in
shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995
<S> <C> <C>
Shares sold 414,748,919 901,368,780
Shares issued to shareholders in payment of distributions
declared 1,122,908 2,529,218
Shares redeemed (395,636,469) (891,545,071)
Net change resulting from share transactions 20,235,358 12,352,927
</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 0.50% of the Fund's average daily net
assets.
NORTH CAROLINA MUNICIPAL CASH TRUST
The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time
at its sole discretion.
ADMINISTRATIVE FEE-Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is based
on the level of average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE-Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services, the Fund will pay
Federated Shareholder Services up to 0.25% of daily average net assets
of the Trust shares for the period. The fee paid to Federated
Shareholder Services is used to finance certain services for
shareholders and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES-FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FServ is
based on the size, type, and number of accounts and transactions made
by shareholders.
PORTFOLIO ACCOUNTING FEES-FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-
pocket expenses.
ORGANIZATIONAL EXPENSES-Organizational expenses of $21,879 and start-
up administrative service expenses of $31,507 were borne initially by
Adviser.
The Fund has agreed to reimburse Adviser for the organizational and
start-up administrative expenses during the five-year period following
effective date. For the period ended April 30, 1996, the Fund paid
$4,254 and $6,126, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS-During the period ended April 30, 1996, the
Trust engaged in purchase and sale transactions with funds that have a
common investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7
under the Act amounting to $202,855,000 and $190,655,000,
respectively.
GENERAL-Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
<TABLE>
<S> <S>
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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Trust's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
North Carolina
Municipal
Cash
Trust
Semi-Annual Report
To Shareholders
April 30, 1996
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 314229782
G01177-01 (6/96)
- --------------------------------------------------------------------------------
CONNECTICUT
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
April 30, 1996
FEDERATED SECURITIES CORP.
(LOGO)Z
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229105
0052406 (6/96)
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, which covers the
six-month period from November 1, 1995, through April 30, 1996. The report
begins with a discussion with the fund's portfolio manager, followed by a
complete listing of the fund's holdings and its financial statements.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and Connecticut
investment income tax*--through a portfolio concentrated in high-quality,
short-term Connecticut municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.02 per
share. Its total net assets of $219 million were diversified among Connecticut
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on Connecticut Municipal Cash Trust to seek the best tax-free
income opportunities for your cash. As always, we will strive to provide you
with the highest level of service. Your questions or comments are always
welcome.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the funds is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q
Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A
The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50% to
the current 5.25% at the end of January 1996. For the December 1995 move, the
Fed cited a better-than-expected inflation outlook as the impetus behind the
easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed appeared
swayed by the dampening effects of high debt loads and employment uncertainty on
consumer consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
- --------------------------------------------------------------------------------
Q
How has the fund's yield responded to this interest rate environment?
A
The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the period. For the fund, the seven-day net yield
was 3.16% at the end of the period compared to 3.30% six months ago.*
Q
What was your strategy for managing the fund over the semi-annual reporting
period?
A
The fund started the reporting period with an average maturity of 64 days,
reflecting a neutral to slightly bullish outlook on short-term interest
rates. Because of the lack of supply of fixed-rate notes in Connecticut, we
let the average maturity of the fund roll inward to 47 days by the end of the
year. In the first three months of 1996, we targeted the average maturity
between 40 and 50 days, reflecting the lack of value offered in the marketplace
for fixed-rate, Connecticut exempt notes. In April 1996, we extended the average
maturity to 69 days, as several attractive notes were offered in the
marketplace. Going forward, our assessment is for more neutral Fed policy for
the balance of 1996. If fixed-rate securities continue to offer relative value
when compared to shorter-term overnight or weekly notes, we expect to attempt to
maintain this average maturity between 50 and 65 days.
Q
What is your outlook for the near future?
A
With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only .5%. As a result, the Fed should not feel the
urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
* Past performance does not guarantee future results. Yield will vary.
CONNECTICUT MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.4%
- --------------------------------------------------------------------------
CONNECTICUT--92.0%
-------------------------------------------------------
$ 2,310,000 Berlin, CT, 4.00% BANs, 6/27/1996 NR(3) $ 2,311,563
-------------------------------------------------------
4,100,000 Cheshire, CT, 4.25% BANs, 8/9/1996 NR(2) 4,106,481
-------------------------------------------------------
9,933,170 (a) Clipper Connecticut Tax Exempt Trust, (Series 1994-1)
Weekly VRDNs (State Street Bank and Trust Co. LIQ) VMIG1 9,933,170
-------------------------------------------------------
2,640,000 Connecticut Development Authority Weekly VRDNs (Banta
Associates)/(Marine Midland Bank N.A., Buffalo, NY LOC) P-1 2,640,000
-------------------------------------------------------
700,000 Connecticut Development Authority Weekly VRDNs (Capital
District Energy Center)/(Canadian Imperial Bank of
Commerce, Toronto LOC) P-1 700,000
-------------------------------------------------------
4,000,000 Connecticut Development Authority Weekly VRDNs (Capital
District Energy Center)/(Canadian Imperial Bank of
Commerce, Toronto LOC) P-1 4,000,000
-------------------------------------------------------
4,500,000 Connecticut Development Authority Weekly VRDNs (Jewish
Community Center (New Haven, CT))/ (Fleet National
Bank, Providence, R.I. LOC) P-1 4,500,000
-------------------------------------------------------
1,392,600 Connecticut Development Authority Weekly VRDNs (RSA
Corp.)/(Barclays Bank PLC, London LOC) P-1 1,392,600
-------------------------------------------------------
1,030,000 Connecticut Development Authority, (Series 1985) Weekly
VRDNs (Martin-Brower Company Project)/ (ABN AMRO Bank
N.V., Amsterdam LOC) P-1 1,030,000
-------------------------------------------------------
5,000,000 Connecticut Development Authority, (Series 1993) Weekly
VRDNs (Rand-Whitney Containerboard Limited
Partnership)/(Chase Manhattan Bank N.A., New York LOC) A-1 5,000,000
-------------------------------------------------------
11,000,000 Connecticut Development Authority, (Series A) Weekly
VRDNs (Exeter Energy)/(Sanwa Bank Ltd, Osaka LOC) A-1 11,000,000
-------------------------------------------------------
1,000,000 Connecticut Development Authority, (Series B) Weekly
VRDNs (Exeter Energy)/(Sanwa Bank Ltd, Osaka LOC) A-1 1,000,000
-------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------
$ 7,499,000 Connecticut Development Authority, (Series C) Weekly
VRDNs (Exeter Energy)/(Sanwa Bank Ltd, Osaka LOC) A-1 $ 7,499,000
-------------------------------------------------------
5,000,000 Connecticut Development Authority, PCR (Series 1993A)
Weekly VRDNs (Connecticut Light & Power Co.)/ (Deutsche
Bank, AG LOC) A-1+ 5,000,000
-------------------------------------------------------
6,700,000 Connecticut Development Authority, PCR (Series 1993A)
Weekly VRDNs (Western Mass Electric Co.)/(Union Bank of
Switzerland, Zurich LOC) A-1+ 6,700,000
-------------------------------------------------------
2,500,000 Connecticut Development Authority, PCR Refunding Bonds
(Series 1993B) Weekly VRDNs (Connecticut Light & Power
Co.)/(Union Bank of Switzerland, Zurich LOC) A-1+ 2,500,000
-------------------------------------------------------
1,000,000 Connecticut Development Health Care Facilities Weekly
VRDNs (Independence Living)/(Chemical Bank, New York
LOC) VMIG1 1,000,000
-------------------------------------------------------
1,600,000 Connecticut Development Health Care Facilities Weekly
VRDNs (Independence Living)/(Credit Local de France
LOC) VMIG1 1,600,000
-------------------------------------------------------
6,700,000 Connecticut Municipal Electric Energy Cooperative,
Power Supply System Revenue Bonds (1995 Series A),
3.10% CP (Fleet National Bank, Providence, R.I. LOC),
Mandatory Tender 5/17/1996 P-1 6,700,000
-------------------------------------------------------
1,800,000 Connecticut State HEFA Weekly VRDNs (Charlotte
Hungerfield Hospital)/(First National Bank of Boston,
MA LOC) VMIG1 1,800,000
-------------------------------------------------------
3,700,000 Connecticut State HEFA, (Series A) Weekly VRDNs (Forman
School Issue)/(National Westminster Bank, PLC, London
LOC) A-1+ 3,700,000
-------------------------------------------------------
3,875,000 Connecticut State HEFA, (Series L), 3.25% CP (Yale
University), Mandatory Tender 6/14/1996 Aaa 3,875,000
-------------------------------------------------------
4,300,000 Connecticut State HEFA, (Series N), 3.45% CP (Yale
University), Mandatory Tender 7/12/1996 Aaa 4,300,000
-------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------
$10,250,000 Connecticut State HEFA, 3.40% CP (Windham Community
Memorial Hospital)/(Banque Paribas, Paris LOC),
Mandatory Tender 5/14/1996 A-1 $ 10,250,000
-------------------------------------------------------
1,000,000 Connecticut State HEFA, Revenue Bonds (Series A) Weekly
VRDNs (Pomfret School Issue)/(Credit Local de France
LOC) VMIG1 1,000,000
-------------------------------------------------------
7,130,000 Connecticut State HFA, (Series 1990C), 4.00% CP,
Mandatory Tender 7/16/1996 AA 7,130,000
-------------------------------------------------------
3,245,000 Connecticut State HFA, (Series 1990D), 3.30% CP,
Mandatory Tender 5/15/1996 A-1+ 3,245,000
-------------------------------------------------------
3,100,000 Connecticut State HFA, (Series 1990D), 3.80% CP,
Mandatory Tender 7/25/1996 AA 3,100,000
-------------------------------------------------------
10,000,000 Connecticut State HFA, (Series A-4), 3.65% TOBs,
Mandatory Tender 4/10/1997 A-1+ 10,000,000
-------------------------------------------------------
4,100,000 Connecticut State Resource Recovery Authority, 4.00%
RANs (Fleet National Bank, Providence, R.I. LOC),
6/21/1996 P-1 4,101,650
-------------------------------------------------------
4,925,000 Connecticut State, (1996 Series A), 4.00% Bonds,
5/15/1997 AA- 4,944,845
-------------------------------------------------------
12,000,000 Connecticut State, Special Assessment Unemployment
Compensation Advance Fund, Revenue Bonds (Series
1993C), 3.90% TOBs (FGIC INS)/(FGIC Securities
Purchase, Inc. LIQ), Mandatory Tender 7/1/1996 A-1+ 12,000,000
-------------------------------------------------------
10,100,000 Hartford, CT Redevelopment Authority Weekly VRDNs
(Underwood Towers)/(FSA INS)/(Barclays Bank PLC, London
LIQ) A-1+ 10,100,000
-------------------------------------------------------
9,475,000 Meriden, CT, (Lot B), 4.25% BANs, 8/14/1996 NR(3) 9,483,045
-------------------------------------------------------
7,550,000 New Britain, CT, 3.52% BANs, 4/15/1997 NR(3) 7,551,372
-------------------------------------------------------
1,600,000 New Haven, CT Weekly VRDNs (Starter Sportswear)/
(NatWest NA LOC) P-1 1,600,000
-------------------------------------------------------
10,000,000 New Haven, CT, Custodial Receipts (Series D), 4.25%
BANs (State Street Bank and Trust Co. LOC), 8/22/1996 P-1 10,013,416
-------------------------------------------------------
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------
$ 942,500 Southeastern CT Water Authority, 3.50% GANs, 3/20/1997 NR(3) $ 943,708
-------------------------------------------------------
7,500,000 Stamford, CT Housing Authority, Multi-Modal
Interchangeable Rate Revenue Bonds (Series 1994) Weekly
VRDNs (Morgan Street Project)/(Deutsche Bank, AG LOC) VMIG1 7,500,000
-------------------------------------------------------
1,325,000 Trumbull, CT, GO UT, 4.00% BANs, 6/5/1996 NR(2) 1,325,741
-------------------------------------------------------
5,000,000 West Hartford, CT, 3.34% BANs, 7/18/1996 NR(3) 5,000,407
------------------------------------------------------- ------------
Total 201,576,998
------------------------------------------------------- ------------
PUERTO RICO--7.4%
-------------------------------------------------------
7,000,000 Puerto Rico Government Development Bank, 3.15% CP,
Mandatory Tender 5/13/1996 A-1+ 7,000,000
-------------------------------------------------------
5,200,000 Puerto Rico Government Development Bank, 3.20% CP,
Mandatory Tender 5/22/1996 A-1+ 5,200,000
-------------------------------------------------------
3,500,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 1988), 3.25% CP (Inter American University of
Puerto Rico)/(Bank of Tokyo-Mitsubishi LTD. LOC),
Mandatory Tender 6/12/1996 Aa3 3,500,000
-------------------------------------------------------
400,000 (a) Puerto Rico Public Building Authority, (PA-106) Weekly
VRDNs (AMBAC INS)/(Merrill Lynch Capital Services, Inc.
LIQ) VMIG1 400,000
------------------------------------------------------- ------------
Total 16,100,000
------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $217,676,998
------------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum tax represent 26.3% of the
portfolio as calculated based upon total portfolio market value.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
(a) Denotes a restricted security which is subject to restrictions or resale
under Federal Securities laws. This security has been determined to be
liquid under criteria established by the Board of Trustees. At the end of
the period, this security amounts to $10,333,170 which represents 5% of net
assets.
(b) Also represents cost for federal tax purposes.
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
Note: The categories of investments are shown as a percentage of net assets
($219,057,766) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
BANs -- Bond Anticipation Notes
CP -- Commercial Paper
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GANs -- Grant Anticipation Notes
GO -- General Obligation
HEFA -- Health and Education Facilities Authority
HFA -- Housing Finance Authority
INS -- Insured
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
PCA -- Pollution Control Authority
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
RANs -- Revenue 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)
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Total Investments in securities, at amortized cost and value $217,676,998
- -------------------------------------------------------------------------------
Cash 366,318
- -------------------------------------------------------------------------------
Income receivable 1,608,150
- ------------------------------------------------------------------------------- ------------
Total assets 219,651,466
- -------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------
Income distribution payable $538,750
- --------------------------------------------------------------------
Accrued expenses 54,950
- -------------------------------------------------------------------- --------
Total liabilities 593,700
- ------------------------------------------------------------------------------- ------------
NET ASSETS for 219,057,766 shares outstanding $219,057,766
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
$219,057,766 / 219,057,766 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $3,989,533
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 549,973
- ----------------------------------------------------------------------
Administrative personnel and services fee 83,172
- ----------------------------------------------------------------------
Custodian fees 15,298
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 18,615
- ----------------------------------------------------------------------
Directors'/Trustees' fees 1,369
- ----------------------------------------------------------------------
Auditing fees 5,940
- ----------------------------------------------------------------------
Legal fees 1,202
- ----------------------------------------------------------------------
Portfolio accounting fees 34,898
- ----------------------------------------------------------------------
Shareholder services fee 274,987
- ----------------------------------------------------------------------
Share registration costs 10,789
- ----------------------------------------------------------------------
Printing and postage 7,254
- ----------------------------------------------------------------------
Insurance premiums 3,102
- ----------------------------------------------------------------------
Taxes 1,704
- ----------------------------------------------------------------------
Miscellaneous 310
- ---------------------------------------------------------------------- ---------
Total expenses 1,008,613
- ----------------------------------------------------------------------
Waivers
- ----------------------------------------------------------------------
Waiver of investment advisory fee $(238,649)
- ----------------------------------------------------------
Waiver of shareholder services fee (109,996)
- ---------------------------------------------------------- ---------
Total waivers (348,645)
- ---------------------------------------------------------------------- ---------
Net expenses 659,968
- ----------------------------------------------------------------------------------- ----------
Net investment income $3,329,565
- ----------------------------------------------------------------------------------- ----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 3,329,565 $ 6,931,149
- ------------------------------------------------------ --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income (3,329,565) (6,931,149)
- ------------------------------------------------------ --------------- ---------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 330,898,778 522,140,169
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 886,039 1,971,315
- ------------------------------------------------------
Cost of shares redeemed (297,445,267) (529,816,470)
- ------------------------------------------------------ --------------- ---------------
Change in net assets resulting from share
transactions 34,339,550 (5,704,986)
- ------------------------------------------------------ --------------- ---------------
Change in net assets 34,339,550 (5,704,986)
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 184,718,216 190,423,202
- ------------------------------------------------------ --------------- ---------------
End of period $ 219,057,766 $ 184,718,216
- ------------------------------------------------------ --------------- ---------------
</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
(UNAUDITED) YEAR ENDED OCTOBER 31,
APRIL 30, --------------------------------------------------------------
1996 1995 1994 1993** 1992 1991 1990(A)
----------- ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.02 0.03 0.02 0.02 0.03 0.04 0.05
- --------------------------- -------- ------ ------ ----- ------ ------ ------
LESS DISTRIBUTIONS
- ---------------------------
Distributions from net
investment income (0.02) (0.03) (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 $ 1.00
- --------------------------- -------- ------ ------ ----- ------ ------ ------
TOTAL RETURN(B) 1.51% 3.31% 2.12% 1.96% 2.68% 4.04% 5.54%
- ---------------------------
RATIOS TO AVERAGE NET
ASSETS
- ---------------------------
Expenses 0.60%* 0.60% 0.59% 0.57% 0.56% 0.56% 0.48%*
- ---------------------------
Net investment income 3.03%* 3.26% 2.11% 1.95% 2.66% 3.94% 5.32%*
- ---------------------------
Expense waiver/
reimbursement(c) 0.32%* 0.30% 0.18% 0.25% 0.30% 0.21% 0.28%*
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
Net assets, end of period
(000 omitted) $219,058 $184,718 $190,423 $140,446 $140,118 $140,113 $138,738
- ---------------------------
</TABLE>
* Computed on an annualized basis.
** Prior to November 6, 1992, the Fund provided two classes of shares.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Connecticut Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. The financial statements of the other
portfolios are presented separately. The assets of each portfolio are segregated
and a shareholder's interest is limited to the portfolio in which shares are
held.
The investment objective of the fund is current income exempt from federal
regular income tax and Connecticut Dividend and Interest Income Tax consistent
with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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, 1996, 59%
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
CONNECTICUT MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
supported (backed) by a letter of credit from any one institution or agency
did not exceed 9% 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 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, 1996,
is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Clipper Connecticut Tax Exempt Trust, (Series 1994-1) May 6, 1994 $9,933,170
Puerto Rico Public Building Authority July 25, 1995 400,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $219,057,766. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
- ---------------------------------------------------- ------------------ -----------------
<S> <C> <C>
Shares sold 330,898,778 522,140,169
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 886,039 1,971,315
- ----------------------------------------------------
Shares redeemed (297,445,267) (529,816,470)
- ---------------------------------------------------- ---------------- ---------------
Net change resulting from share transactions 34,339,550 (5,704,986)
- ---------------------------------------------------- ---------------- ---------------
</TABLE>
CONNECTICUT 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 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of daily average net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholders Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $123,070,000 and
$144,670,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Fund 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President and
Peter E. Madden Treasurer
Gregor F. Meyer John W. McGonigle
John E. Murray, Jr. Executive Vice President and
Wesley W. Posvar Secretary
Marjorie P. Smuts Richard B. Fisher
Vice President
David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves 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.
- --------------------------------------------------------------------------------
MINNESOTA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
April 30, 1996
FEDERATED SECURITIES CORP.
(LOGO)Z
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314229873
314229402
1052807 (6/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present your Semi-Annual Report to Shareholders of Minnesota
Municipal Cash Trust, a portfolio of Federated Municipal Trust, which covers the
six-month period from November 1, 1995, through April 30, 1996. The report
begins with a discussion with the fund's portfolio manager, followed by a
complete listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares and Cash
Series Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and Minnesota
personal income tax*--through a portfolio concentrated in high-quality,
short-term Minnesota municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.02 per
share for both Institutional Shares and Cash Series Shares. Its total net assets
of $404.9 million were spread among Minnesota securities that use municipal bond
financing for projects as varied as health care, housing, community development,
and transportation.
You can count on Minnesota Municipal Cash Trust to seek the best tax-free income
opportunities for your cash. As always, we will strive to provide you with the
highest level of professional service. We appreciate your support and invite
your questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
Government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Mary Jo Ochson, C.F.A.
Q
Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A
The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50% to
the current 5.25% at the end of January 1996. For the December 1995 move, the
Fed cited a better-than-expected inflation outlook as the impetus behind the
easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed appeared
swayed by the dampening effects of high debt loads and employment uncertainty on
consumer consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q
How has the fund's yield responded to this interest rate environment?
A
The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the period. The seven-day net yield of the fund's
Institutional Shares on April 30, 1996 was 3.62% compared to 3.79% six months
ago.* The seven-day net yield of the fund's Cash Series Shares on April 30, 1996
was 3.12% compared to 3.39% six months ago.*
*Past performance does not guarantee future results. Yield will vary.
- --------------------------------------------------------------------------------
Q
What was your strategy for managing the fund over the semi-annual reporting
period?
A
The fund generally maintained a neutral average maturity range of 55 to 60
days during the reporting period. However, active management of the average
maturity of the fund is strongly influenced by the seasonal nature of
Minnesota fixed rate note issuance. Minnesota note supply is heaviest in the
first quarter. Heavy supply results in attractive note season yields. Thus in
anticipation of the first quarter, the fund was temporarily repositioned within
a shorter average maturity range of 35 to 45 days. The fund purchased
attractively priced paper during note season and extended its average maturity
back to the neutral range for the duration of the period. Going forward we will
continue to monitor the overall rate environment, the economic outlook for the
State and supply factors as prime indicators of appropriate fund strategy.
Q
What is your outlook for rates in the near future?
A
With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term.
MINNESOTA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.5%
- -------------------------------------------------------------------------
MINNESOTA--97.0%
-----------------------------------------------------
$ 6,400,000 Anoka City, MN Solid Waste Disposal Authority, 3.65%
CP (United Power Associates)/(National Rural
Utilities Cooperative Finance Corp. GTD), Mandatory
Tender 7/12/1996 VMIG-1 $ 6,400,000
-----------------------------------------------------
2,050,000 Anoka, MN, Multifamily Housing Revenue Bonds Weekly
VRDNs (Walker Plaza Project)/(First Bank NA,
Minneapolis LOC) A-1 2,050,000
-----------------------------------------------------
10,000,000 Anoka-Hennepin, MN ISD 11, GO Certificates of
Indebtedness (Series 1996A), 3.44% TANs (Minnesota
Tax and Aid Anticipation Borrowing Program GTD),
3/13/1997 MIG1 10,000,642
-----------------------------------------------------
3,880,000 Apple Valley, MN, IDRB (Series 1995) Weekly VRDNs (AV
Development Company Project)/(Firstar Bank, Minnesota
LOC) A-1 3,880,000
-----------------------------------------------------
2,650,000 Baudette, MN, IDR (Series 1989) Weekly VRDNs (Reid
Powell, Inc.)/(Nationsbank of Georgia, N.A. LOC) P-1 2,650,000
-----------------------------------------------------
1,000,000 Becker, MN, PCR (Series 1992A), 3.15% CP (Northern
States Power Co.), Mandatory Tender 5/23/1996 A-1+ 1,000,000
-----------------------------------------------------
9,000,000 Becker, MN, PCR (Series 1992A), 3.20% CP (Northern
States Power Co.), Mandatory Tender 6/18/1996 A-1+ 9,000,000
-----------------------------------------------------
2,000,000 Becker, MN, PCR (Series 1993-B), 3.45% CP (Northern
States Power Co.), Mandatory Tender 7/11/1996 A-1+ 2,000,000
-----------------------------------------------------
2,000,000 Becker, MN, PCR (Series 1993A & B), 3.15% CP
(Northern States Power Co.), Mandatory Tender
5/23/1996 A-1+ 2,000,000
-----------------------------------------------------
6,000,000 Becker, MN, PCR (Series 1993A & B), 3.20% CP
(Northern States Power Co.), Mandatory Tender
6/18/1996 A-1+ 6,000,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 4,000,000 Becker, MN, PCR (Series 1993A & B), 3.60% CP
(Northern States Power Co.), Mandatory Tender
5/15/1996 A-1+ $ 4,000,000
-----------------------------------------------------
4,500,000 Becker, MN, PCR (Series 1993A & B), 3.65% CP
(Northern States Power Co.), Mandatory Tender
6/12/1996 A-1+ 4,500,000
-----------------------------------------------------
500,000 Beltrami County, MN, Environmental Control Authority
Daily VRDNs (Northwood Panelboard Co.)/(Union Bank of
Switzerland, Zurich LOC) A-1+ 500,000
-----------------------------------------------------
1,400,000 Beltrami County, MN, Environmental Control Authority,
(Series 1995) Daily VRDNs (Northwood Panelboard
Co.)/(Union Bank of Switzerland, Zurich LOC) A-1+ 1,400,000
-----------------------------------------------------
2,855,000 Blaine, MN, IDRB (Series 1996) Weekly VRDNs (S & S of
Minnesota, LLC Project)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 2,855,000
-----------------------------------------------------
8,000,000 Bloomington, MN Port Authority, Special Tax Revenue
Refunding Bonds (Series 1994B) Weekly VRDNs (Mall of
America)/(FSA INS)/(Credit Local de France LIQ) A-1+ 8,000,000
-----------------------------------------------------
3,600,000 Bloomington, MN, IDRB (Series 1995) Weekly VRDNs (Now
Technologies, Inc. Project)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 3,600,000
-----------------------------------------------------
5,000,000 Bloomington, MN, Multi-Family Housing Weekly VRDNs
(Crow/Bloomington Apartments)/(Citibank NA, New York
LOC) P-1 5,000,000
-----------------------------------------------------
8,080,000 Burnsville, MN, Multi-Family Housing Weekly VRDNs
(Berkshire of Burnsville)/(Sumitomo Bank Ltd., Osaka
LOC) A-1 8,080,000
-----------------------------------------------------
3,280,000 Byron, MN IDB Weekly VRDNs (Schmidt Printing)/
(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 3,280,000
-----------------------------------------------------
1,275,000 Chanhassen, MN IDA, (Series 1995) Weekly VRDNs
(Building Management Group, L.L.C. Project)/(Norwest
Bank Minnesota, Minneapolis LOC) A-1+ 1,275,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 1,270,000 Chaska, MN IDA Weekly VRDNs (Laeration Industries)/
(Norwest Bank Minnesota, Minneapolis LOC) A-1+ $ 1,270,000
-----------------------------------------------------
5,000,000 Cloquet, MN, Industrial Facilities Revenue Bonds
(Series 1996A) Weekly VRDNs (Potlatch Corp.)/(Credit
Suisse, Zurich LOC) P-1 5,000,000
-----------------------------------------------------
2,900,000 Coon Rapids, MN Hospital Authority, (Series 1985)
Weekly VRDNs (Health Central System)/(First Bank NA,
Minneapolis LOC) A-1 2,900,000
-----------------------------------------------------
5,400,000 Crystal, MN IDA Weekly VRDNs (Crystal Gallery Mall,
MN)/(Citibank NA, New York LOC) P-1 5,400,000
-----------------------------------------------------
10,745,000 Dakota County & Washington County MN Hsg & Redev
Auth, Bloomington Mtg Rev, 5.75% TOBs (GNMA
COL)(Meridian Bank, Reading, PA LIQ), Optional Tender
9/1/1996 NR(1) 10,806,009
-----------------------------------------------------
1,775,000 Dakota County, MN Housing & Redevelopment Authority,
(Custodial Receipts), 4.00% TOBs (GNMA COL)/(Meridian
Bank, Reading, PA LIQ), Optional Tender 9/1/1996 NR(1) 1,775,000
-----------------------------------------------------
3,000,000 (a) Dakota County, Washington County & Anoka City, MN
Housing & Redevelopment Authority, Merlots-Series H,
4.00% TOBs (United States Treasury COL)/(Meridian
Bank, Reading, PA LIQ), Optional Tender 6/1/1996 NR(1) 3,000,000
-----------------------------------------------------
8,000,000 Eagan, MN, Multi-Family Housing (Series 1992A)
Weekly VRDNs (Cinnamon Ridge)/(Mellon Bank NA,
Pittsburgh LOC) VMIG1 8,000,000
-----------------------------------------------------
855,000 Eden Prairie, MN IDA, #194 Weekly VRDNs
(Richard W. Cohen Project)/(Norwest Bank Minnesota,
Minneapolis LOC) P-1 855,000
-----------------------------------------------------
90,468 Eden Prairie, MN IDA, (Series 1987) Weekly VRDNs
(Minnesota Supply Co.)/(Norwest Bank Minnesota,
Minneapolis LOC) P-1 90,468
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 1,450,000 Eden Prairie, MN IDA, (Series 1995) Weekly VRDNs
(Robert Lothenbach Project)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ $ 1,450,000
-----------------------------------------------------
1,200,000 Elk River, MN Weekly VRDNs (Tescom Project)/ (Norwest
Bank Minnesota, Minneapolis LOC) P-1 1,200,000
-----------------------------------------------------
4,025,000 Fridley, MN , (Series 1984) Weekly VRDNs (River Road
Investors Project)/(Citibank NA, New York LOC) A-1 4,025,000
-----------------------------------------------------
1,000,000 Hennepin Co. MN, (Series 1995C) Weekly VRDNs
(Hennepin Co. MN GTD) NR(1) 1,000,000
-----------------------------------------------------
2,500,000 Hennepin Co. MN, GO ULT Notes, 4.25% Bonds, 12/1/1996 NR(1) 2,513,545
-----------------------------------------------------
3,150,000 Hennepin County, MN Independent School District No.
286, GO Certificates of Indebtedness of 1996, 3.38%
TANs (Minnesota Tax and Aid Anticipation Borrowing
Program GTD), 3/21/1997 NR(2) 3,150,811
-----------------------------------------------------
5,500,000 Hubbard County, MN, Solid Waste Disposal (Series
1990) Weekly VRDNs (Potlatch Corp.)/(Credit Suisse,
Zurich LOC) A-1+ 5,500,000
-----------------------------------------------------
1,135,000 Litchfield, MN ISD, Certificates of Indebtedness,
3.33% TANs (Minnesota Tax and Aid Anticipation
Borrowing Program GTD), 3/28/1997 NR(2) 1,135,296
-----------------------------------------------------
4,000,000 Maple Grove, MN IDA, (Series 1991A) Weekly VRDNs
(Eagle Ridge, MN Apartments)/(Sumitomo Bank Ltd.,
Osaka LOC) A-1 4,000,000
-----------------------------------------------------
3,000,000 Maple Grove, MN IDA, (Series 1991B) Weekly VRDNs
(Eagle Ridge, MN Apartments)/(First Bank NA,
Minneapolis LOC) A-1 3,000,000
-----------------------------------------------------
2,025,000 Maplewood, MN, Multi-Family Housing (Series 1993)
Weekly VRDNs (Silver Ridge Project)/(Federal Home
Loan Bank of Chicago LOC) A-1+ 2,025,000
-----------------------------------------------------
2,610,000 Mendota Heights, MN, Multi-Family Revenue Bonds
Weekly VRDNs (Lexington Heights Apartments)/
(Sumitomo Bank Ltd., Osaka LOC) A-1 2,610,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 4,455,000 Minneapolis CDA, Refunding Revenue Bonds Weekly VRDNs
(Riverplace Project (The Pinnacle Apartments)/
(Sumitomo Bank Ltd., Osaka LOC) A-1 $ 4,455,000
-----------------------------------------------------
715,000 Minneapolis, MN IDA Weekly VRDNs (JTJ Co.)/
(First Bank NA, Minneapolis LOC) P-1 715,000
-----------------------------------------------------
7,000,000 Minneapolis, MN, (Series 1995B) Weekly VRDNs VMIG1 7,000,000
-----------------------------------------------------
4,460,000 (a) Minneapolis/St. Paul MN Housing Finance Board,
SFM Revenue Bonds, Merlots (Series D), 4.125% TOBs
(GNMA COL), Optional Tender 7/1/1996 NR(1) 4,460,000
-----------------------------------------------------
1,141,000 (a) Minneapolis/St. Paul MN Housing Finance Board, SFM
Revenue Bonds, 4.00% TOBs (GNMA COL)/(Meridian Bank,
Reading, PA LIQ), Optional Tender 8/1/1996 NR(1) 1,141,000
-----------------------------------------------------
8,000,000 Minnesota State Commissioner of Iron Range Resources
& Rehabilitation, (Series 1991) Weekly VRDNs
(Louisiana-Pacific Corp.)/(Wachovia Bank of NC, NA,
Winston-Salem LOC) P-1 8,000,000
-----------------------------------------------------
830,000 Minnesota State HFA, Rental Housing Bonds
(Series 1995 D), 3.80% Bonds (MBIA INS), 8/1/1996 NR(1) 830,000
-----------------------------------------------------
5,900,000 Minnesota State HFA, Single Family Mortgage Bonds
(1995 Series M), 3.50% TOBs (Societe Generale, Paris
GIC), Mandatory Tender 12/12/1996 VMIG1 5,900,000
-----------------------------------------------------
800,000 Minnesota State HFA, Single Family Mortgage Bonds
(1995 Series N), 3.60% TOBs (Societe Generale, Paris
GIC), Mandatory Tender 12/12/1996 VMIG1 800,000
-----------------------------------------------------
2,200,000 Minnesota State HFA, Single Family Mortgage Bonds
(1995 Series O), 3.60% TOBs (Societe Generale, Paris
GIC), Optional Tender 12/12/1996 VMIG1 2,200,000
-----------------------------------------------------
2,770,000 Minnesota State HFA, Single Family Mortgage Bonds
(Series 1993-T), 3.50% TOBs (Societe Generale, Paris
GIC), Mandatory Tender 12/12/1996 VMIG1 2,770,000
-----------------------------------------------------
3,800,000 Minnesota State Higher Education Coordinating Board,
(Series 1992A) Weekly VRDNs (First Bank NA,
Minneapolis LIQ) VMIG1 3,800,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 7,000,000 Minnesota State Higher Education Coordinating Board,
1992 (Series B) Weekly VRDNs (First Bank NA,
Minneapolis LIQ) VMIG1 $ 7,000,000
-----------------------------------------------------
3,700,000 Minnesota State Higher Education Coordinating Board,
1992 (Series C) Weekly VRDNs (First Bank NA,
Minneapolis LIQ) VMIG1 3,700,000
-----------------------------------------------------
6,500,000 Minnesota State Higher Education Coordinating Board,
1992 (Series C) Weekly VRDNs (First Bank NA,
Minneapolis LIQ) VMIG1 6,500,000
-----------------------------------------------------
4,300,000 Minnesota State Higher Education Facility Authority
Weekly VRDNs (Carlton College)/(Swiss Bank Corp.,
Basle LIQ) VMIG1 4,300,000
-----------------------------------------------------
3,000,000 Minnesota State Higher Education Facility Authority,
(Series Four-A2) Weekly VRDNs (University of
St. Thomas) A-1 3,000,000
-----------------------------------------------------
5,925,000 Minnesota State, 7.00% Bonds (United States Treasury
PRF), 8/1/1996 (@100) NR(1) 5,973,385
-----------------------------------------------------
1,500,000 Minnesota State, 7.00% Bonds, 8/1/1996 (@100) NR(1) 1,512,747
-----------------------------------------------------
11,000,000 Minnesota Tax and Aid Anticipation Borrowing Program,
(Series 1995A), 4.25% TANs (Minnesota Tax and Aid
Anticipation Borrowing Program GTD), 8/23/1996 NR(2) 11,009,848
-----------------------------------------------------
8,750,000 Minnesota Tax and Aid Anticipation Borrowing Program,
Certificates of Participation (Series 1996A), 4.25%
TANs (Minnesota Aid Anticipation Pooled Borrowing
Program)/(Minnesota Tax and Aid Anticipation
Borrowing Program GTD), 2/21/1997 MIG1 8,801,467
-----------------------------------------------------
7,300,000 Minnesota Tax and Aid Anticipation Borrowing Program,
Certificates of Participation, Aid Anticipation
Series 1995B, 4.30% TRANs (Minnesota Tax and Aid
Anticipation Borrowing Program GTD), 9/13/1996 NR(2) 7,307,740
-----------------------------------------------------
1,515,000 Minnetonka, MN, IDRB (Series 1996) Weekly VRDNs (PGI
Cos., Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 1,515,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 5,900,000 Minnetonka, MN, Multifamily Housing Revenue Refunding
Bonds (Series 1995) Weekly VRDNs (Southampton
Apartments Project (MN))/(National Bank of Canada,
Montreal LOC) P-1 $ 5,900,000
-----------------------------------------------------
2,800,000 Moorehead, MN Independent School District,
Certificates of Indebtedness, 3.35% TANs (Minnesota
Tax and Aid Anticipation Borrowing Program GTD),
3/27/1997 NR(2) 2,800,844
-----------------------------------------------------
1,300,000 New Brighton, MN, IDR Weekly VRDNs (Unicare Homes,
Inc.)/(Banque Paribas, Paris LOC) A-2 1,300,000
-----------------------------------------------------
1,000,000 New Hope, MN IDRB, (Series 1994) Weekly VRDNs (Gaines
and Hanson Printing Co.)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 1,000,000
-----------------------------------------------------
3,825,000 New Hope, MN Weekly VRDNs (Paddock Labs)/ (Norwest
Bank Minnesota, Minneapolis LOC) P-1 3,825,000
-----------------------------------------------------
2,580,000 Olmsted County, MN Building Authority, Certificates
of Participation Weekly VRDNs (Human Services
Infrastructure)/(Toronto-Dominion Bank LOC) A-1+ 2,580,000
-----------------------------------------------------
2,405,000 Orono, MN ISD 278, GO Certificates of Indebtedness,
(Series 1996), 3.53% TANs (Minnesota Tax and Aid
Anticipation Borrowing Program GTD), 3/13/1997 NR(2) 2,406,794
-----------------------------------------------------
2,600,000 Perham, MN IDA Weekly VRDNs (Land O' Lakes, Inc.)/
(Rabobank Nederland, Utrecht LOC) A-1+ 2,600,000
-----------------------------------------------------
1,365,000 Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Norwest
Bank Minnesota, Minneapolis LOC) P-1 1,365,000
-----------------------------------------------------
4,500,000 Plymouth, MN, IDRB (Series 1994) Weekly VRDNs
(Olympic Steel, Inc.)/(National City Bank, Cleveland,
OH LOC) P-1 4,500,000
-----------------------------------------------------
1,435,000 Port of Austin, MN Weekly VRDNs (Mower House
Color)/(Norwest Bank Minnesota, Minneapolis LOC) P-1 1,435,000
-----------------------------------------------------
8,000,000 Rochester, MN Health Care Facility Authority Weekly
VRDNs (Mayo Foundation) VMIG1 8,000,000
-----------------------------------------------------
4,000,000 Rochester, MN Health Care Facility Authority Weekly
VRDNs (Mayo Foundation) VMIG1 4,000,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 2,000,000 Rochester, MN Health Care Facility Authority, (Series
C), 3.20% CP (Mayo Foundation), Mandatory Tender
6/10/1996 VMIG1 $ 2,000,000
-----------------------------------------------------
1,000,000 Rogers, MN IDA Weekly VRDNs (Metal Sales
Manufacturing Corp)/(Society National Bank,
Cleveland, OH LOC) P-1 1,000,000
-----------------------------------------------------
2,870,000 Rogers, MN IDA, IDRB Weekly VRDNs (DAC Development,
LLC Project)/(Norwest Bank Minnesota, Minneapolis
LOC) A-1+ 2,870,000
-----------------------------------------------------
15,950,000 Rosemount, MN, PCR (Series 1984) Weekly VRDNs (Koch
Refining Co.) A-1+ 15,950,000
-----------------------------------------------------
1,645,000 St. Cloud, MN Housing & Redevelopment Authority,
Revenue Refunding Bonds (Series 1994A) Weekly VRDNs
(Coborn's Incorporated Project)/(Norwest Bank
Minnesota, Minneapolis LOC) A-1+ 1,645,000
-----------------------------------------------------
2,890,000 St. Cloud, MN Housing & Redevelopment Authority,
Revenue Refunding Bonds (Series 1994B) Weekly VRDNs
(Coborn's Incorporated Project)/(Norwest Bank
Minnesota, Minneapolis LOC) A-1+ 2,890,000
-----------------------------------------------------
5,000,000 St. Paul, MN Housing & Redevelopment Authority Weekly
VRDNs (District Cooling St Paul, Inc.)/(Credit Local
de France LOC) A-1+ 5,000,000
-----------------------------------------------------
500,000 St. Paul, MN Housing & Redevelopment Authority Weekly
VRDNs (United Way)/(First Bank NA, Minneapolis LOC) A-1 500,000
-----------------------------------------------------
1,650,000 St. Paul, MN Housing & Redevelopment Authority,
(Series 1994) Weekly VRDNs (Minnesota Children's
Museum)/(First Bank NA, Minneapolis LOC) A-1 1,650,000
-----------------------------------------------------
2,000,000 St. Paul, MN Housing & Redevelopment Authority,
District Cooling Revenue Bonds (1995 Series I) Weekly
VRDNs (Credit Local de France LOC) P-1 2,000,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 4,600,000 St. Paul, MN Port Authority, (Series 1991) Weekly
VRDNs (West Gate Office)/(First Bank NA, Minneapolis
LOC) A-1 $ 4,600,000
-----------------------------------------------------
9,700,000 St. Paul, MN, Variable Rate Demand Water Revenue
Bonds, Series 1994D Weekly VRDNs A-1+ 9,700,000
-----------------------------------------------------
1,850,000 St. Peter, MN Independent School District #508, Aid
Anticipation Certificates of Indebtedness, 3.96% BANs
(Minnesota Tax and Aid Anticipation Borrowing Program
GTD), 8/29/1996 NR(2) 1,850,170
-----------------------------------------------------
1,000,000 Steele Couny, MN, IDRB (Series 1994) Weekly VRDNs
(Blount, Inc.)/(Nationsbank of Georgia, N.A. LOC) A-1 1,000,000
-----------------------------------------------------
6,500,000 University of Minnesota, (Series F), 3.25% TOBs
(Regents of University of Minnesota), Optional Tender
8/1/1996 A-1+ 6,500,000
-----------------------------------------------------
4,205,000 Victoria, MN, IDRB, (Series 1996A) Weekly VRDNs
(HEI, Inc. Project)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 4,205,000
-----------------------------------------------------
1,420,000 Victoria, MN, IDRB, (Series 1996B) Weekly VRDNs
(HEI, Inc. Project)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 1,420,000
-----------------------------------------------------
2,315,000 Waseca, MN I.S.D. #829, GO UT Notes, 3.57% TANs,
3/26/1997 NR(2) 2,315,792
-----------------------------------------------------
12,910,000 Washington County, MN Housing & Redevelopment
Authority, (Series 90) Weekly VRDNs (Granada Pond
Apartments)/(Sumitomo Bank Ltd., Osaka LOC) A-1 12,910,000
-----------------------------------------------------
1,405,000 Wells, MN, 5.00% TOBs (Stokely, Inc.)/(NBD Bank,
Indiana LOC), Optional Tender 6/1/1996 A-1+ 1,405,000
-----------------------------------------------------
4,705,000 White Bear, MN Weekly VRDNs (Thermoform Plastic,
Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 4,705,000
-----------------------------------------------------
2,165,000 White Bear, MN, Variable Rate Demand Industrial
Revenue Bonds Weekly VRDNs (N.A. Ternes Project)/
(Firstar Bank, Minnesota LOC) A-1 2,165,000
-----------------------------------------------------
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
$ 2,000,000 Winsted, MN IDA Weekly VRDNs (Sterner Lighting
Systems)/(Fleet National Bank, Providence, R.I. LOC) A-1 $ 2,000,000
----------------------------------------------------- ------------
Total 392,861,558
----------------------------------------------------- ------------
PUERTO RICO--2.5%
-----------------------------------------------------
10,000,000 Puerto Rico Government Development Bank, 3.50% CP,
Mandatory Tender 7/12/1996 VMIG1 10,000,000
----------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $402,861,558
----------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 30.5% of the
portfolio as calculated based upon total portfolio market value.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
(a) Denotes a restricted security which is subject to restrictions on resale,
under Federal Securities laws. This security has been determined to be
liquid under criteria established by the Board of Trustees. At the end of
the period, these securities amounted to $8,601,000 which represents 2.1% of
net assets.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($404,975,479) at April 30, 1996.
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
BANs -- Bond Anticipation Notes
CDA -- Community Development Administration
COL -- Collateralized
CP -- Commercial Paper
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
GTD -- Guaranty
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bond
INS -- Insured
ISD -- Independent School District
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue
PRF -- Prerefunded
SFM -- Single Family Mortgage
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $402,861,558
- --------------------------------------------------------------------------------
Cash 556,057
- --------------------------------------------------------------------------------
Income receivable 2,787,882
- --------------------------------------------------------------------------------
Deferred expenses (1,401)
- -------------------------------------------------------------------------------- ------------
Total assets 406,204,096
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $1,085,225
- -------------------------------------------------------------------
Accrued expenses 143,392
- ------------------------------------------------------------------- ----------
Total liabilities 1,228,617
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 404,975,479 shares outstanding $404,975,479
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- --------------------------------------------------------------------------------
$212,223,121 / 212,223,121 shares outstanding $1.00
- -------------------------------------------------------------------------------- ------------
CASH SERIES SHARES:
- --------------------------------------------------------------------------------
$192,752,358 / 192,752,358 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest $7,483,354
- ------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------
Investment advisory fee $ 786,327
- ---------------------------------------------------------------------
Administrative personnel and services fee 148,644
- ---------------------------------------------------------------------
Custodian fees 25,306
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 43,436
- ---------------------------------------------------------------------
Directors'/Trustees' fees 2,548
- ---------------------------------------------------------------------
Auditing fees 6,826
- ---------------------------------------------------------------------
Legal fees 3,302
- ---------------------------------------------------------------------
Portfolio accounting fees 45,818
- ---------------------------------------------------------------------
Distribution services fee--Cash Series Shares 416,852
- ---------------------------------------------------------------------
Shareholder services fee--Institutional Shares 283,029
- ---------------------------------------------------------------------
Shareholder services fee--Cash Series Shares 208,426
- ---------------------------------------------------------------------
Share registration costs 51,438
- ---------------------------------------------------------------------
Printing and postage 10,952
- ---------------------------------------------------------------------
Insurance premiums 4,556
- ---------------------------------------------------------------------
Miscellaneous 2,364
- --------------------------------------------------------------------- -----------
Total expenses 2,039,824
- ---------------------------------------------------------------------
Waivers
- ---------------------------------------------------------------------
Waiver of investment advisory fee $(535,874)
- ---------------------------------------------------------
Waiver of distribution services--Cash Series Shares (208,426)
- ---------------------------------------------------------
Waiver of shareholder services fee--Institutional
Shares (283,029)
- --------------------------------------------------------- ---------
Total waivers (1,027,329)
- --------------------------------------------------------------------- -----------
Net expenses 1,012,495
- ------------------------------------------------------------------------------------ ----------
Net investment income $6,470,859
- ------------------------------------------------------------------------------------ ----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 6,470,859 $ 12,302,404
- ------------------------------------------------------ ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income:
- ------------------------------------------------------
Institutional Shares (3,969,013) (8,269,227)
- ------------------------------------------------------
Cash Series Shares (2,501,846) (4,033,177)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from distributions
to shareholders (6,470,859) (12,302,404)
- ------------------------------------------------------ ---------------- ----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 670,402,652 1,040,754,759
- ------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of distributions declared 2,143,633 4,384,166
- ------------------------------------------------------
Cost of shares redeemed (611,434,147) (955,314,263)
- ------------------------------------------------------ ---------------- ----------------
Change in net assets resulting from share
transactions 61,112,138 89,824,662
- ------------------------------------------------------ ---------------- ----------------
Change in net assets 61,112,138 89,824,662
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 343,863,341 254,038,679
- ------------------------------------------------------ ---------------- ----------------
End of period $ 404,975,479 $ 343,863,341
- ------------------------------------------------------ ---------------- ----------------
</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
(UNAUDITED) YEAR ENDED OCTOBER 31,
APRIL 30, -------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990(A)
----------- ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------
Net investment income 0.02 0.04 0.03 0.02 0.03 0.05 0.01
- ----------------------------------
LESS DISTRIBUTIONS
- ----------------------------------
Distributions from net
investment income (0.02) (0.04) (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 $ 1.00
- ---------------------------------- -------- ------ ------ ------ ------ ------ ------
TOTAL RETURN (B) 1.76% 3.82% 2.58% 2.43% 3.19% 4.89% 0.90%
- ----------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------
Expenses 0.30%* 0.30% 0.31% 0.31% 0.31% 0.30% 0.01%*
- ----------------------------------
Net investment income 3.51%* 3.77% 2.55% 2.40% 3.10% 4.73% 6.45%*
- ----------------------------------
Expense waiver/
reimbursement (c) 0.52%* 0.52% 0.34% 0.34% 0.33% 0.43% 0.69%*
- ----------------------------------
SUPPLEMENTAL DATA
- ----------------------------------
Net assets, end of period (000
omitted) $212,223 $212,392 $159,704 $165,865 $245,168 $124,603 $75,904
- ----------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH SERIES SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
1996 1995 1994 1993 1992 1991(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 0.02 0.03 0.04
- ------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.02) (0.03) (0.04)
- ------------------------------------------ ------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------ ------- ------ ------ ------ ------ ------
TOTAL RETURN (B) 1.51% 3.41% 2.17% 2.02% 2.78% 3.60%
- ------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------
Expenses 0.80%* 0.70% 0.71% 0.71% 0.71% 0.64%*
- ------------------------------------------
Net investment income 3.00%* 3.37% 2.15% 2.01% 2.75% 4.11%*
- ------------------------------------------
Expense waiver/reimbursement (c) 0.52%* 0.62% 0.61% 0.44% 0.44% 0.59 %*
- ------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------
Net assets, end of period (000 omitted) $192,752 $131,471 $94,335 $67,521 $75,044 $69,747
- ------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Minnesota Municipal Cash Trust (the
"Fund"), a non-diversified portfolio. 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.
The investment objective of the Fund is current income exempt from federal
regular income tax and the regular personal income taxes imposed by the State of
Minnesota consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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 over a period of five years from
the Fund's commencement date.
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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, 1996,
67.17 % 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 from any one institution or
agency did not exceed 9.44% 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 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, 1996, is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------- ------------- ------------
<S> <C> <C>
Dakota County, Washington County & Anoka City, MN
Housing & Redevelopment Authority 5/31/1996 $3,000,000
Minneapolis/St. Paul MN Housing Finance Board,
SFM Revenue Bonds, Merlots (Series D) 3/29/1996 $4,460,000
Minneapolis/St. Paul MN Housing Finance Board,
SFM Revenue Bonds 2/1/1996 $1,141,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
MINNESOTA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1996, capital paid-in aggregated $404,975,479.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
INSTITUTIONAL SHARES APRIL 30, 1996 OCTOBER 31, 1995
- ----------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold 277,855,091 546,893,719
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 148,656 425,031
- -----------------------------------------------------
Shares redeemed (278,172,498) (494,630,825)
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Institutional share
transactions (168,751) 52,687,925
- ----------------------------------------------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
CASH SERIES SHARES APRIL 30, 1996 OCTOBER 31, 1995
- ----------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold 392,547,561 493,861,040
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,994,977 3,959,135
- -----------------------------------------------------
Shares redeemed (333,261,649) (460,683,438)
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Cash Series share
transactions 61,280,889 37,136,737
- ----------------------------------------------------- --------------- ---------------
Net change resulting from share transactions 61,112,138 89,824,662
- ----------------------------------------------------- --------------- ---------------
</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 0.40% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
MINNESOTA 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 0.50% of the average daily net assets of the Cash
Series Shares, annually, to compensate FSC. FSC may voluntarily choose to waive
any portion of its fee. FSC can modify or terminate this voluntary waiver at any
time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of average daily net assets of each class of shares for the period. The fee paid
to FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $360,670,000 and
$353,340,000, 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President and Treasurer
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not
insured or guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the
Federal Reserve Board, or any other government agency. Investment in mutual
funds involves
investment risk, including possible loss of principal. Although money market
funds seek to maintain
a stable net asset value of $1.00 per share, there is no assurance that they
will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or
accompanied by the fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
- --------------------------------------------------------------------------------
NEW JERSEY
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
April 30, 1996
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 314229600
Cusip 314229709
2052902 (6/96)
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, which covers the
six-month period from November 1, 1995 through April 30, 1996. The report begins
with a discussion with the fund's portfolio manager, followed by a complete
listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares and
Institutional Service Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and New Jersey
state income tax*--through a portfolio concentrated in high-quality, short-term
New Jersey municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.02 per
share for both Institutional Shares and Institutional Service Shares. The fund's
total net assets of $112.9 million were diversified among New Jersey securities
that use municipal bond financing for projects as varied as health care,
housing, community development, and transportation.
You can count on New Jersey Municipal Cash Trust to seek the best tax-free
income opportunities for your cash investment needs. As always, we'll continue
to provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An investment
in the fund is neither insured nor guaranteed by the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ended in April 1996. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50% to
the current 5.25% at the end of January 1996. For the December 1995 move, the
Fed cited a better-than-expected inflation outlook as the impetus behind the
easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed appeared
swayed by the dampening effects of high debt loads and employment uncertainty on
consumer consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the period. For the fund, the seven-day net yield
of the Institutional Shares on April 30, 1996 was 3.32% compared to 3.41% on
November 1, 1995. For the Institutional Service Shares, the seven-day net yield
was 3.22% on April 30, 1996 compared to 3.31% on November 30, 1995.*
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
- --------------------------------------------------------------------------------
Q What was your strategy for managing the fund over the period?
A The fund started the period with an average maturity of 58 days, reflecting
a neutral outlook on short-term interest rates. Because of the supply of
readily available fixed-rate notes in New Jersey and attractive yield
levels, we extended the average maturity of the fund to a high of 71 days in
February 1996. At the end of the period, we let the average maturity inward to
65 days, reflecting our assessment of more neutral Fed policy for the balance of
1996. If fixed-rate securities continue to offer relative value when compared to
shorter-term overnight or weekly notes, we expect to maintain this average
maturity between 55 and 65 days.
Q What is your outlook for the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only .5%. As a result, the Fed should not feel the
urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
NEW JERSEY MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.2%
- --------------------------------------------------------------------------
NEW JERSEY--95.2%
-------------------------------------------------------
$ 700,000 Atlantic County, NJ Improvement Authority Weekly VRDNs
(Marine Midland Bank N.A., Buffalo, NY LOC) VMIG1 $ 700,000
-------------------------------------------------------
1,925,000 Bordentown, NJ, 4.15% BANs, 6/27/1996 NR 1,925,430
-------------------------------------------------------
3,731,745 Caldwell Borough, NJ, 4.125% BANs, 12/6/1996 NR 3,744,139
-------------------------------------------------------
2,000,000 Camden County, NJ Improvement Authority, (Series 1995)
Weekly VRDNs (Jewish Federation of Southern Jersey,
Inc.)/(National Westminster Bank, PLC, London LOC) P-1 2,000,000
-------------------------------------------------------
1,250,000 Evesham Township, NJ, 4.25% BANs, 9/27/1996 NR 1,253,208
-------------------------------------------------------
1,004,000 Florence Township, NJ Board of Education, 4.15% TANs,
12/31/1996 NR 1,006,914
-------------------------------------------------------
2,500,000 Galloway Township, NJ, (Series B), 4.00% BANs,
3/13/1997 NR 2,508,356
-------------------------------------------------------
1,850,000 Hopewell Township, NJ, 4.15% BANs, 8/27/1996 NR 1,850,855
-------------------------------------------------------
1,300,000 Long Branch, NJ, 4.00% BANs, 12/13/1996 NR 1,305,317
-------------------------------------------------------
1,961,389 Long Hill Township, NJ, 4.00% BANs, 7/19/1996 NR 1,962,449
-------------------------------------------------------
1,500,000 Middlesex County, NJ PCFA Weekly VRDNs (FMC Gold
Co.)/(Wachovia Bank of NC, NA, Winston-Salem LOC) P-1 1,500,000
-------------------------------------------------------
1,500,000 Montclair Township, NJ, 4.25% BANs, 6/28/1996 NR(3) 1,501,133
-------------------------------------------------------
3,000,000 Moorestown Township, NJ, 3.99% BANs, 9/5/1996 NR(3) 3,000,317
-------------------------------------------------------
1,200,000 Morristown, NJ, 3.80% TANs, 2/14/1997 NR(3) 1,200,000
-------------------------------------------------------
1,138,681 New Brunswick, NJ, 4.00% BANs, 12/23/1996 NR 1,141,819
-------------------------------------------------------
2,900,000 New Jersey EDA Weekly VRDNs (Center-For-Aging--
Applewood Estates)/(Banque Paribas, Paris LOC) VMIG1 2,900,000
-------------------------------------------------------
2,500,000 New Jersey EDA Weekly VRDNs (Franciscan Oaks)/(Bank of
Scotland, Edinburgh LOC) A-1+ 2,500,000
-------------------------------------------------------
5,553,000 New Jersey EDA Weekly VRDNs (Meridan Health Care)/
(First National Bank of Maryland, Baltimore LOC) P-1 5,553,000
-------------------------------------------------------
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------
$ 4,173,000 New Jersey EDA Weekly VRDNs (Molins Machines)/
(Nationsbank of Virginia, N.A. LOC) P-1 $ 4,173,000
-------------------------------------------------------
1,320,000 New Jersey EDA Weekly VRDNs (Nash Group)/ (Chemical
Bank, New York LOC) A-1 1,320,000
-------------------------------------------------------
3,500,000 New Jersey EDA Weekly VRDNs (YA-YWHA of Bergen County,
NJ)/(Bank of New York, New York LOC) VMIG1 3,500,000
-------------------------------------------------------
1,600,000 New Jersey EDA, (1994 Series A), 4.35% TOBs (A.F.L.
Quality, Inc.)/(National Westminster Bank, PLC, London
LOC), Optional Tender 7/1/1996 A-1+ 1,600,000
-------------------------------------------------------
560,000 New Jersey EDA, (1994 Series B), 4.35% TOBs (Two
Univac, L.L.C.)/(National Westminster Bank, PLC, London
LOC), Optional Tender 7/1/1996 A-1+ 560,000
-------------------------------------------------------
2,700,000 New Jersey EDA, (Series 1984) Weekly VRDNs (Burmah-
Castrol Inc. Project)/(Barclays Bank PLC, London LOC) A-1+ 2,700,000
-------------------------------------------------------
4,100,000 New Jersey EDA, (Series 1986) Weekly VRDNs (Ridgefield
Associates)/(Bank of Tokyo-Mitsubishi LTD. LOC) P-1 4,100,000
-------------------------------------------------------
350,000 New Jersey EDA, (Series 1987G) Weekly VRDNs (W.Y. Urban
Renewal)/(National Westminster Bank, PLC, London LOC) VMIG1 350,000
-------------------------------------------------------
2,400,000 New Jersey EDA, (Series 1988-F) Weekly VRDNs (Lamington
Corners Associates)/(First Fidelity Bank, NA, New
Jersey LOC) VMIG1 2,400,000
-------------------------------------------------------
1,500,000 New Jersey EDA, (Series 1991), 3.25% CP (Chambers
Cogeneration Ltd Partnership)/(Swiss Bank Corp., Basle
LOC), Mandatory Tender 5/24/1996 A-1+ 1,500,000
-------------------------------------------------------
1,180,000 New Jersey EDA, (Series 1992 Q) Weekly VRDNs (Physical
Accoustics, Inc.)/(Banque Nationale de Paris LOC) VMIG1 1,180,000
-------------------------------------------------------
1,170,000 New Jersey EDA, (Series 1992 Z) Weekly VRDNs (West-Ward
Pharmaceuticals)/(Banque Nationale de Paris LOC) VMIG1 1,170,000
-------------------------------------------------------
1,080,000 New Jersey EDA, (Series 1992D-1) Weekly VRDNs (Danlin
Corp.)/(Banque Nationale de Paris LOC) VMIG1 1,080,000
-------------------------------------------------------
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------
$ 2,285,000 New Jersey EDA, (Series 1992I-1) Weekly VRDNs (Geshem
Realty)/(Banque Nationale de Paris LOC) VMIG1 $ 2,285,000
-------------------------------------------------------
3,010,000 New Jersey EDA, (Series 1992L) Weekly VRDNs (Kent Place
School)/(Banque Nationale de Paris LOC) VMIG1 3,010,000
-------------------------------------------------------
1,600,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Filtra
Corporation Project)/(Chemical Bank, New York LOC) P-1 1,600,000
-------------------------------------------------------
2,000,000 New Jersey EDA, (Series 1995) Weekly VRDNs
(International Vitamin Corporation Project)/(National
Westminster Bank, PLC, London LOC) P-1 2,000,000
-------------------------------------------------------
1,250,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Manhattan
Bagel Co., Inc.)/(First Fidelity Bank, NA, New Jersey
LOC) P-1 1,250,000
-------------------------------------------------------
3,700,000 New Jersey EDA, (Series 1995B) Weekly VRDNs (Fellowship
Village Project)/(Banque Paribas, Paris LOC) VMIG1 3,700,000
-------------------------------------------------------
1,005,000 New Jersey EDA, (Series W) Weekly VRDNs (Datatec
Industries, Inc.)/(Banque Nationale de Paris LOC) P-1 1,005,000
-------------------------------------------------------
2,815,000 New Jersey EDA, Adjustable/Fixed Rate Economic
Development Bonds Weekly VRDNs (Atlantic States Cast
Iron Pipe Company)/(Amsouth Bank N.A., Birmingham LOC) VMIG1 2,815,000
-------------------------------------------------------
1,400,000 New Jersey EDA, Economic Development Bonds, 1987
Project Weekly VRDNs (United Jewish Community of Bergen
County)/(Bank of New York, New York LOC) P-1 1,400,000
-------------------------------------------------------
1,925,000 Ocean City, NJ, 4.00% BANs, 6/28/1996 NR 1,926,043
-------------------------------------------------------
1,750,000 Pine Beach, NJ, 3.625% BANs, 2/13/1997 NR 1,752,983
-------------------------------------------------------
10,000,000 Port Authority of New York and New Jersey, (Series
1991-4) Weekly VRDNs P-1 10,000,000
-------------------------------------------------------
2,900,000 South Plainfield, NJ, 3.95% BANs, 7/26/1996 NR 2,900,321
-------------------------------------------------------
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------- -------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------
$ 3,000,000 Stafford Township, NJ, (Series A), 4.25% BANs,
9/20/1996 NR $ 3,005,098
-------------------------------------------------------
5,700,000 Trenton, NJ, 4.125% BANs, 12/20/1996 NR 5,712,830
------------------------------------------------------- ------------
Total 107,548,212
------------------------------------------------------- ------------
PUERTO RICO--4.0%
-------------------------------------------------------
4,500,000 Puerto Rico Government Development Bank, 3.15% CP,
Mandatory Tender 5/13/1996 A-1 4,500,000
------------------------------------------------------- ------------
TOTAL INVESTMENTS AT AMORTIZED COST (A) $112,048,212
------------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 29.8% of the
portfolio as calculated based upon total portfolio market value.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($112,905,475) at April, 30, 1996.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
BANs -- Bond Anticipation Notes
CP -- Commercial Paper
EDA -- Economic Development Authority
LOC -- Letter of Credit
PCFA -- Pollution Control Finance Authority
PLC -- Public Limited Company
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)
NEW JERSEY MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $112,048,212
- -------------------------------------------------------------------------------
Cash 220,287
- -------------------------------------------------------------------------------
Income receivable 946,701
- ------------------------------------------------------------------------------- ------------
Total assets 113,215,200
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Income distribution payable $292,512
- --------------------------------------------------------------------
Accrued expenses 17,213
- -------------------------------------------------------------------- --------
Total liabilities 309,725
- ------------------------------------------------------------------------------- ------------
NET ASSETS for 112,905,475 shares outstanding $112,905,475
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------
Institutional Shares: ($92,166,645 / 92,166,645 shares outstanding) $1.00
- ------------------------------------------------------------------------------- ------------
Institutional Service Shares: ($20,738,830 / 20,738,830 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------
Interest $2,280,140
- --------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------
Investment advisory fee $ 244,595
- -------------------------------------------------------------------------
Administrative personnel and services fee 77,184
- -------------------------------------------------------------------------
Custodian fees 11,712
- -------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 19,025
- -------------------------------------------------------------------------
Directors'/Trustees' fees 1,000
- -------------------------------------------------------------------------
Auditing fees 7,648
- -------------------------------------------------------------------------
Legal fees 2,202
- -------------------------------------------------------------------------
Portfolio accounting fees 27,492
- -------------------------------------------------------------------------
Distribution services fee--Institutional Service Shares 13,441
- -------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 119,269
- -------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 33,602
- -------------------------------------------------------------------------
Share registration costs 11,166
- -------------------------------------------------------------------------
Printing and postage 10,064
- -------------------------------------------------------------------------
Insurance premiums 1,520
- -------------------------------------------------------------------------
Taxes 636
- -------------------------------------------------------------------------
Miscellaneous 2,384
- ------------------------------------------------------------------------- ---------
Total expenses 582,940
- -------------------------------------------------------------------------
Waivers--
- -------------------------------------------------------------------------
Waiver of investment advisory fee $(108,194)
- -------------------------------------------------------------
Waiver of distribution services fee--Institutional Service
Shares (13,441)
- -------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (95,415)
- -------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service
Shares (13,441)
- ------------------------------------------------------------- ---------
Total waivers (230,491)
- ------------------------------------------------------------------------- ---------
Net expenses 352,449
- -------------------------------------------------------------------------------------- ----------
Net investment income $1,927,691
- -------------------------------------------------------------------------------------- ----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 1,927,691 $ 3,642,951
- ------------------------------------------------------ -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income:
- ------------------------------------------------------
Institutional Shares (1,513,840) (2,752,708)
- ------------------------------------------------------
Institutional Service Shares (413,851) (890,243)
- ------------------------------------------------------ -------------- --------------
Change in net assets resulting from distributions
to shareholders (1,927,691) (3,642,951)
- ------------------------------------------------------ -------------- --------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 198,629,424 425,149,193
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 224,368 545,318
- ------------------------------------------------------
Cost of shares redeemed (202,709,833) (408,621,137)
- ------------------------------------------------------ -------------- --------------
Change in net assets resulting from share
transactions (3,856,041) 17,073,374
- ------------------------------------------------------ -------------- --------------
Change in net assets (3,856,041) 17,073,374
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 116,761,516 99,688,142
- ------------------------------------------------------ -------------- --------------
End of period $ 112,905,475 $ 116,761,516
- ------------------------------------------------------ -------------- --------------
</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,
(UNAUDITED) -------------------------------------------------------
APRIL 30, 1996 1995 1994 1993** 1992 1991(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 0.02 0.03 0.04
- ------------------------------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
- ------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.02) (0.03) (0.04)
- ------------------------------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------ ------ ------ ------ ------ ------ ------
TOTAL RETURN(B) 1.59% 3.46% 2.26% 2.22% 2.96% 3.87%
- ------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------
Expenses 0.55%* 0.55% 0.54% 0.46% 0.45% 0.27%*
- ------------------------------
Net investment income 3.17%* 3.41% 2.22% 2.19% 2.86% 4.19%*
- ------------------------------
Expense waiver/
reimbursement(c) 0.38%* 0.41% 0.39% 0.45% 0.51% 0.67%*
- ------------------------------
SUPPLEMENTAL DATA
- ------------------------------
Net assets, end of period
(000 omitted) $92,167 $86,944 $62,984 $66,346 $57,657 $39,423
- ------------------------------
</TABLE>
* Computed on an annualized basis.
** Prior to October 6, 1993, the Fund provided three classes of shares.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
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,
(UNAUDITED) -------------------------------------------------------
APRIL 30, 1996 1995 1994 1993 1992 1991(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 0.02 0.03 0.04
- ------------------------------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
- ------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.02) (0.03) (0.04)
- ------------------------------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------ ------ ------ ------ ------ ------ ------
TOTAL RETURN(B) 1.54% 3.36% 2.16% 2.12% 2.86% 3.82%
- ------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------
Expenses 0.65%* 0.65% 0.65% 0.56% 0.55% 0.35%*
- ------------------------------
Net investment income 3.08%* 3.28% 2.19% 2.08% 2.69% 4.11%*
- ------------------------------
Expense waiver/
reimbursement(c) 0.38%* 0.41% 0.41% 0.45% 0.51% 0.69%*
- ------------------------------
SUPPLEMENTAL DATA
- ------------------------------
Net assets, end of period
(000 omitted) $20,739 $29,817 $36,704 $21,005 $26,844 $17,709
- ------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of New Jersey Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. 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.
The investment objective of the Fund is current income exempt from federal
regular income tax and New Jersey state income tax consistent with stability of
principal and liquidity.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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, 1996,
53.4% of the securities in the portfolio of investments are backed by
letters of credit or bond insurance of various financial
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
institutions and financial guaranty assurance agencies. The value of
investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 8.7% of total investments.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $112,905,475.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
INSTITUTIONAL SHARES
- -----------------------------------------------------
Shares sold 158,576,553 334,240,209
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 9,325 15,613
- -----------------------------------------------------
Shares redeemed (153,363,471) (310,295,248)
- ----------------------------------------------------- -------------- --------------
Net change resulting from Institutional share
transactions 5,222,407 23,960,574
- ----------------------------------------------------- -------------- --------------
INSTITUTIONAL SERVICE SHARES
- -----------------------------------------------------
Shares sold 40,052,871 90,908,984
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 215,043 529,705
- -----------------------------------------------------
Shares redeemed (49,346,362) (98,325,889)
- ----------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service
share transactions (9,078,448) (6,887,200)
- ----------------------------------------------------- -------------- --------------
Net change resulting from share transactions (3,856,041) 17,073,374
- ----------------------------------------------------- -------------- --------------
</TABLE>
NEW JERSEY 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 the Fund's average daily net assets.The Adviser may voluntarily
choose to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Institutional Service Shares. The Plan provides that the Fund may
incur distribution expenses up to .10% of the average daily net assets of the
Institutional Service Shares, annually, to compensate FSC. The distributor may
voluntarily choose to waive any portion of its fee. The distributor can modify
or terminate this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25% of
daily average net assets of the Fund for the period. The fee paid to FSS is used
to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ, maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $61,531 were borne initially
by the Adviser. The Fund has agreed to reimburse Adviser for the organizational
expenses at an annual rate of .005% of average daily net assets, respectively,
until expenses initially borne are fully reimbursed or the expiration of five
years after effective date-whichever occurs earlier. For the period ended April
30, 1996, the Fund paid $497 pursuant to this agreement.
NEW JERSEY MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $97,000,000 and
$109,900,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Fund 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
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, which covers the six-month
period from November 1, 1995 through April 30, 1996. The report begins with a
discussion with the fund's portfolio manager, followed by a complete listing of
the fund's holdings and its financial statements. Financial highlights tables
are provided for the fund's Institutional Shares, Institutional Service Shares,
and Cash II Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and Ohio state
income tax*--through a portfolio concentrated in high-quality, short-term Ohio
municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.01 per
share for Institutional Shares, and $0.02 per share for both Institutional
Service Shares and Cash II Shares. The fund's total net assets of $278.7 million
were spread among Ohio securities that use municipal bond financing for projects
as varied as health care, housing, community development, and transportation.
You can count on Ohio Municipal Cash Trust to seek the best tax-free income
opportunities for your cash investment needs. As always, we'll continue to
provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q
Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A
The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ended in April 1996. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50% to
the current 5.25% at the end of January 1996. For the December 1995 move, the
Fed cited a better-than-expected inflation outlook as the impetus behind the
easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed appeared
swayed by the dampening effects of high debt loads and employment uncertainty on
consumer consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
- --------------------------------------------------------------------------------
Q
How has the fund's yield responded to this interest rate environment?
A
The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the period. For the fund, the seven-day net yield
of the Institutional Shares on April 30, 1996 was 3.68% compared to 3.14% on
March 11, 1996.* For the Institutional Service Shares, the seven-day net yield
was 3.48% on April 30, 1996 compared to 3.59% on November 1, 1995.** For the
Cash II Shares, the seven-day net yield was 3.18% on April 30, 1996 compared to
3.29% on November 1, 1995.**
Q
What was your strategy for managing the fund over the period?
A
The fund started the period with an average maturity of 60 days, reflecting
a neutral to slightly bullish outlook on short-term interest rates. Because
of the readily available supply of fixed-rate notes in Ohio and attractive
yield levels, we kept the average maturity of the fund targeted between 55 to 65
days, reflecting the value offered in the marketplace for fixed-rate notes. At
the end of the period, the average maturity was 64 days, reflecting our
assessment of more neutral Fed policy for the balance of 1996. If fixed-rate
securities continue to offer relative value when compared to shorter-term
overnight or weekly notes, we expect to maintain this average maturity between
55 and 65 days.
Q
What is your outlook for the near future?
A
With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
* The date of initial public investment for Institutional Shares was March 5,
1996. Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
** Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
OHIO MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--100.5%
- --------------------------------------------------------------------------
OHIO--100.5%
--------------------------------------------------------
$ 2,650,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs
(Visiting Nurses)/(National City Bank, Cleveland, OH
LOC) A-1 $ 2,650,000
--------------------------------------------------------
2,585,000 Ashland County, OH Health Care Weekly
VRDNs (Brethren Care, Inc.)/(National City Bank,
Cleveland, OH LOC) P-1 2,585,000
--------------------------------------------------------
5,875,000 Belmont County, OH Weekly VRDNs (Lesco, Inc.)/
(PNC Bank, N.A. LOC) A-1 5,875,000
--------------------------------------------------------
1,000,000 Belmont County, OH, County Jail Improvement Notes (Third
Series), 4.34% BANs, 8/30/1996 NR 1,000,921
--------------------------------------------------------
1,500,000 Belmont County, OH, Water System Improvement, 3.89%
BANs, 12/19/1996 NR 1,502,660
--------------------------------------------------------
1,675,000 Berea, OH, 4.07% BANs, 10/24/1996 NR(3) 1,676,312
--------------------------------------------------------
3,894,000 Bowling Green, OH, 3.80% BANs, 12/5/1996 NR 3,895,562
--------------------------------------------------------
5,500,000 Brecksville-Broadview Heights CSD, OH, (Series 1996),
3.90% BANs, 1/17/1997 NR 5,513,254
--------------------------------------------------------
2,050,000 Canal Winchester Village, OH, GO LT Notes, 4.27% BANs,
10/15/1996 NR 2,054,770
--------------------------------------------------------
2,000,000 Cleveland-Cuyahoga County, OH Port Authority, (Series
1993) Weekly VRDNs (Rock & Roll Hall of Fame
Museum)/(Credit Local de France LOC) A-1+ 2,000,000
--------------------------------------------------------
1,800,000 Clinton County, OH Hospital Authority Weekly VRDNs
(Clinton Memorial Hospital)/(National City Bank,
Columbus, OH LOC) P-1 1,800,000
--------------------------------------------------------
1,905,000 Columbiana County, OH, Industrial Development Revenue
Bonds Weekly VRDNs (C & S Land Company Project)/ (Bank
One, Youngstown, NA LOC) P-1 1,905,000
--------------------------------------------------------
1,800,000 Conneaut, OH, 4.45% BANs, 7/26/1996 NR 1,801,217
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 2,000,000 Cuyahoga County, OH Hospital Authority Daily VRDNs
(University Hospitals Health System, Inc.)/(Dai-Ichi
Kangyo Bank Ltd., Tokyo LOC) VMIG1 $ 2,000,000
--------------------------------------------------------
1,300,000 Cuyahoga County, OH Hospital Authority Weekly VRDNs (St.
Lukes Hospital)/(First National Bank of Chicago LOC) VMIG1 1,300,000
--------------------------------------------------------
700,000 Cuyahoga County, OH IDA Weekly VRDNs (Animal Protection
League (Cuyahoga County))/(Society National Bank,
Cleveland, OH LOC) VMIG1 700,000
--------------------------------------------------------
1,650,000 Cuyahoga County, OH IDA Weekly VRDNs (East Park
Community, Inc.)/(Society National Bank, Cleveland, OH
LOC) P-1 1,650,000
--------------------------------------------------------
525,000 Cuyahoga County, OH IDA Weekly VRDNs (Interstate Diesel
Service, Inc.)/(Huntington National Bank, Columbus, OH
LOC) P-1 525,000
--------------------------------------------------------
690,000 Cuyahoga County, OH IDA Weekly VRDNs (Parma-Commerce
Parkway West)/(Society National Bank, Cleveland, OH LOC) P-1 690,000
--------------------------------------------------------
1,050,000 Cuyahoga County, OH IDA Weekly VRDNs (Premier
Manufacturing Corp.)/(National City Bank, Kentucky LOC) P-1 1,050,000
--------------------------------------------------------
2,000,000 Cuyahoga County, OH IDA, IDRB (Series 1995) Weekly VRDNs
(Avalon Precision Casting Co. Project)/(Society National
Bank, Cleveland, OH LOC) P-1 2,000,000
--------------------------------------------------------
3,000,000 Dayton, OH, Revenue Refunding Bonds (Series 1993E)
Weekly VRDNs (Emery Air Freight Corp.)/(Mellon Bank NA,
Pittsburgh LOC) VMIG1 3,000,000
--------------------------------------------------------
1,700,000 Delaware County, OH, IDRB (Series 1995) Weekly VRDNs
(Air Waves, Inc. Project)/(Society National Bank,
Cleveland, OH LOC) P-1 1,700,000
--------------------------------------------------------
1,240,000 Elyria, OH, GO LT Various Purpose, 4.26% BANs,
10/11/1996 NR(3) 1,241,381
--------------------------------------------------------
6,100,000 Franklin County, OH Hospital Facility Authority Weekly
VRDNs (Riverside United Methodist Hospital)/
(National City Bank, Cleveland, OH LOC) VMIG1 6,100,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 3,620,000 Franklin County, OH Hospital Facility Authority, (Series
1992) Weekly VRDNs (Wesley Glenn, Inc.)/
(Fifth Third Bank, Cincinnati LOC) VMIG1 $ 3,620,000
--------------------------------------------------------
4,500,000 Franklin County, OH IDA Weekly VRDNs
(Heekin Can, Inc.)/(PNC Bank, Ohio, N.A. LOC) P-1 4,500,000
--------------------------------------------------------
3,055,000 Franklin County, OH IDA Weekly VRDNs (Unicorn Leasing
Corp.)/(Fifth Third Bank, Cincinnati LOC) P-1 3,055,000
--------------------------------------------------------
3,670,000 Franklin County, OH IDA, (Series 1995) Weekly VRDNs
(Fabcon L.L.C. Project)/(Norwest Bank Minnesota,
Minneapolis LOC) P-1 3,670,000
--------------------------------------------------------
2,000,000 Franklin County, OH IDA, IDRB Weekly VRDNs
(Tigerpoly Manufacturing, Inc.)/(Bank of Tokyo-
Mitsubishi LTD. LOC) P-1 2,000,000
--------------------------------------------------------
2,000,000 Franklin County, OH, GO LT (Series 8/95), 4.10% BANs,
8/23/1996 NR 2,001,196
--------------------------------------------------------
1,440,000 Franklin, OH County of, Health Care Facilities Revenue
Bonds (Series 1994) Weekly VRDNs (Wesley Glenn,
Inc.)/(Fifth Third Bancorp LOC) Aa2 1,440,000
--------------------------------------------------------
2,650,000 Franklin, OH LSD, Construction Notes, 3.85% BANs,
10/30/1996 NR 2,655,160
--------------------------------------------------------
1,300,000 Gates Mills Village, OH, Water System Improvement Notes,
3.70% BANs, 3/26/1997 NR 1,301,125
--------------------------------------------------------
1,200,000 Gates Mills Village, OH, Water System Improvement, 4.10%
BANs, 10/17/1996 NR 1,200,532
--------------------------------------------------------
6,280,800 Hamilton, OH, GO LT, 3.75% BANs, 6/14/1996 NR 6,282,798
--------------------------------------------------------
2,200,000 Hamilton, OH, Real Estate Acquisition/Electric
Improvement System (Series A), 4.02% BANs, 6/14/1996 NR(3) 2,200,050
--------------------------------------------------------
2,200,000 Hancock County, OH, Various Purpose, 3.81% BANs,
11/22/1996 NR 2,206,741
--------------------------------------------------------
2,900,000 Highland Heights City, OH, Various Purpose, 3.89% BANs,
12/19/1996 NR 2,903,364
--------------------------------------------------------
2,000,000 Holmes County, OH IDA Weekly VRDNs (Poultry
Processing)/(Rabobank Nederland, Utrecht LOC) A-1+ 2,000,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 1,230,000 Huber Heights, OH, IDRB (Series 1994) Weekly VRDNs
(Lasermike, Inc. Project)/(Society National Bank,
Cleveland, OH LOC) P-1 $ 1,230,000
--------------------------------------------------------
1,000,000 Huron City, OH, GO LT Various Purpose, 4.49% BANs,
5/31/1996 NR 1,000,189
--------------------------------------------------------
1,680,000 Lake County, OH, GO and SA LT various, 4.07% BANs,
10/10/1996 NR(2) 1,680,855
--------------------------------------------------------
2,560,000 Lake County, OH, Hospital Improvement Bonds, 7.875%
Bonds (United States Treasury PRF), 1/1/1997 (@102) Aaa 2,681,969
--------------------------------------------------------
2,815,000 Lake County, OH, Hospital Improvement Bonds, 8.00% Bonds
(United States Treasury PRF), 1/1/1997 (@102) Aaa 2,951,401
--------------------------------------------------------
2,885,000 Lorain County, OH, Health Facilities Revenue Bonds
(Series 1992A) Weekly VRDNs (Elyria United Methodist
Home)/(Fifth Third Bank, Cincinnati LOC) P-1 2,885,000
--------------------------------------------------------
4,385,000 Lorain Port Authority, OH, (Series 1994) Weekly VRDNs
(Spitzer Great Lakes Ltd., Inc.)/(Bank One, Cleveland,
N.A. LOC) P-1 4,385,000
--------------------------------------------------------
1,200,000 Lucas County, OH IDA Weekly VRDNs (Kuhlman Corp.)/
(Society National Bank, Cleveland, OH LOC) P-1 1,200,000
--------------------------------------------------------
1,905,000 Lucas County, OH, Hospital Facility Improvement Revenue
Bonds (Series 93) Weekly VRDNs (Lott Industries, Inc.)/
(National City Bank, Cleveland, OH LOC) P-1 1,905,000
--------------------------------------------------------
270,000 Lucas County, OH, Hospital Improvement Revenue Weekly
VRDNs (Sunshine Children's Home)/(National City Bank,
Cleveland, OH LOC) P-1 270,000
--------------------------------------------------------
8,500,000 Lucas County, OH, Hospital Refunding Revenue Bonds
Weekly VRDNs (Riverside Hospital, OH)/(Huntington
National Bank, Columbus, OH LOC) P-1 8,500,000
--------------------------------------------------------
2,000,000 Lucas County, OH, Metropolitan Sewer & Water District
Improvement Notes (Series 1995), 4.25% BANs, 11/28/1996 NR 2,004,997
--------------------------------------------------------
5,325,000 Mahoning County, OH Multifamily HFA Weekly VRDNs
(International Towers, Inc.)/(PNC Bank, N.A. LOC) A-1 5,325,000
--------------------------------------------------------
985,000 Mansfield, OH, IDR Weekly VRDNs (Designed Metal
Products, Inc.)/(Bank One, Columbus, N.A. LOC) P-1 985,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 870,000 Mayfield, OH City School District, 4.00% BANs, 4/24/1997 NR $ 871,643
--------------------------------------------------------
460,000 Medina County, OH, IDR, 3.35% TOBs (Bopco)/(Bank One,
Akron, N.A. LOC), Optional Tender 9/1/1996 P-1 460,000
--------------------------------------------------------
5,400,000 Medina County, OH, Solid Waste Disposal Revenue Bonds
(Series 1995) Weekly VRDNs (Valley City Steel Company
Project)/(Society National Bank, Cleveland, OH LOC) P-1 5,400,000
--------------------------------------------------------
4,000,000 Montgomery County, OH, Variable Rate Hospital Facilities
Revenue Bonds (1985 Series B), 3.50% CP (Miami (OH)
Valley Hospital)/(Northern Trust Co., Chicago, IL LOC),
Mandatory Tender 7/9/1996 Aa3 4,000,000
--------------------------------------------------------
2,010,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank, Columbus, OH
LOC) A-1 2,010,000
--------------------------------------------------------
2,000,000 Muskingum County, OH, County Building Improvement
(Series 1996), 3.75% BANs, 3/4/1997 NR 2,004,060
--------------------------------------------------------
345,000 North Olmsted, OH IDA Weekly VRDNs (Bryant &
Stratton)/(Society National Bank, Cleveland, OH LOC) P-1 345,000
--------------------------------------------------------
1,000,000 North Olmsted, OH IDA, 3.55% TOBs (Therm-All)/
(National City Bank, Cleveland, OH LOC), Optional Tender
8/1/1996 P-1 1,000,000
--------------------------------------------------------
4,000,000 North Olmsted, OH, Various Purpose Improvement Notes,
(Series 1995), 4.67% BANs, 6/20/1996 NR(3) 4,002,198
--------------------------------------------------------
2,035,000 Ohio HFA Weekly VRDNs (Westchester Village)/
(Society National Bank, Cleveland, OH LOC) P-1 2,035,000
--------------------------------------------------------
7,235,000 Ohio HFA, 4.25% TOBs (Comerica, Inc.)/(Comerica Bank,
Detroit, MI LOC), Optional Tender 5/1/1996 P-1 7,235,000
--------------------------------------------------------
8,500,000 Ohio HFA, Residential Mortgage Revenue Convertible
(1996 Series A-3), 3.40% TOBs (AIG Funding, Inc. GIC),
Mandatory Tender 3/3/1997 A-1+ 8,500,000
--------------------------------------------------------
8,405,000 (a) Ohio HFA, Single Family Mortgage (Series PT-71) Weekly
VRDNs (GNMA COL)/(Commerzbank AG, Frankfurt LIQ) A-1+ 8,405,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 2,230,000 Ohio State Air Quality Development Authority, Variable
Rate Environmental Improvement Revenue Bonds (Series
1995), 3.70% TOBs (USX Corp.)/(Wachovia Bank of NC, NA,
Winston-Salem LOC), Mandatory Tender 5/1/1996 A-1+ $ 2,230,000
--------------------------------------------------------
1,000,000 Ohio State Building Authority, State Facilities Bonds
(Series 1995A), 3.65% Bonds, 10/1/1996 A+ 1,000,000
--------------------------------------------------------
1,880,000 Ohio State Higher Education Facility, Revenue Bonds
Weekly VRDNs (Notre Dame College Project)/(National City
Bank, Cleveland, OH LOC) P-1 1,880,000
--------------------------------------------------------
1,000,000 Ohio State Water Development Authority Weekly VRDNs (PPG
Industries, Inc.) P-1 1,000,000
--------------------------------------------------------
5,000,000 Ohio State Water Development Authority, Ohio PCR Bonds
(Series 1989) Weekly VRDNs (Duquesne Light Power
Co.)/(Barclays Bank PLC, London LOC) A-1+ 5,000,000
--------------------------------------------------------
3,500,000 Ohio State Water Development Authority, Pollution
Control Facilities Revenue Bonds, 4.75% TOBs (Union Bank
of Switzerland, Zurich LOC), Optional Tender 5/1/1996 A-1+ 3,500,000
--------------------------------------------------------
600,000 Ohio State Weekly VRDNs (John Carroll University, OH)/
(PNC Bank, N.A. LOC) P-1 600,000
--------------------------------------------------------
1,360,000 Ohio State, General Obligation Infrastructure
Improvement Bonds (Series 1996), 3.40% Bonds, 8/1/1996 AA 1,360,000
--------------------------------------------------------
1,420,000 Ohio State, IDR (Series 1991) Weekly VRDNs (Standby
Screw, Inc.)/(National City Bank, Columbus, OH LOC) A-1 1,420,000
--------------------------------------------------------
1,400,000 Ohio State, IDRB (Series 1994) Weekly VRDNs (Anomatic
Corporation)/(National City Bank, Columbus, OH LOC) P-1 1,400,000
--------------------------------------------------------
1,350,000 Orrville, OH IDA Weekly VRDNs (O.S. Associates/
Contours, Inc.)/(National City Bank, Cleveland, OH LOC) A-1 1,350,000
--------------------------------------------------------
2,000,000 Ottawa County, OH, Regional Water System Notes, 3.98%
BANs, 4/9/1997 NR 2,004,158
--------------------------------------------------------
1,000,000 Perry Local School District, OH, UT GO Bonds, 3.75%
Bonds (Bank One, Cleveland, N.A. LOC), 12/1/1996 Aa2 1,000,000
--------------------------------------------------------
210,000 Portage County, OH IDA Weekly VRDNs (D & W
Associates)/(Bank One, Akron, N.A. LOC) P-1 210,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 400,000 Portage County, OH IDA, 3.35% TOBs (Neidlinger)/
(Society National Bank, Cleveland, OH LOC), Optional
Tender 9/1/1996 P-1 $ 400,000
--------------------------------------------------------
900,000 Portage County, OH IDA, Industries Revenue Bonds Weekly
VRDNs (Lovejoy Industries)/(Star Bank, NA, Cincinnati
LOC) P-1 900,000
--------------------------------------------------------
1,250,000 Ross County, OH, Hospital Facilities Revenue Bonds
(Series 1995) Weekly VRDNs (Medical Center Hospital
Project)/(Fifth Third Bank, Cincinnati LOC) AA- 1,250,000
--------------------------------------------------------
1,200,000 Sharonville, OH, IDR Weekly VRDNs (Xtek, Inc.)/
(Fifth Third Bank, Cincinnati LOC) VMIG1 1,200,000
--------------------------------------------------------
1,150,000 Shelby City, OH, GO LT Water System Improvement Notes
(Series 1995), 4.50% BANs, 8/22/1996 NR 1,150,850
--------------------------------------------------------
880,000 Solon, OH, IDR Weekly VRDNs (Graphic Laminating)/
(Society National Bank, Cleveland, OH LOC) P-1 880,000
--------------------------------------------------------
2,000,000 Solon, OH, IDRB (Series 1995) Weekly VRDNs
(Cleveland Twist Drill Company)/(Nationsbank of Georgia,
N.A. LOC) A-1 2,000,000
--------------------------------------------------------
2,000,000 Springdale, OH, (Series 1995), 4.15% BANs, 9/20/1996 NR 2,001,479
--------------------------------------------------------
1,200,000 Stark County, OH IDR Weekly VRDNs (Society National
Bank, Cleveland, OH LOC) P-1 1,200,000
--------------------------------------------------------
2,325,000 Stark County, OH IDR, (Series 1994) Weekly VRDNs (Wilk
of Morris)/(Society National Bank, Cleveland, OH LOC) P-1 2,325,000
--------------------------------------------------------
1,300,000 Stark County, OH IDR, IDRB (Series 1996) Weekly VRDNs
(Foundations Systems and Anchors, Inc. Project)/(Bank
One, Akron, N.A. LOC) NR 1,300,000
--------------------------------------------------------
5,300,000 Stark County, OH IDR, IDRB (Series 1995) Weekly VRDNs
(Gramac Project, OH)/(Society National Bank, Cleveland,
OH LOC) P-1 5,300,000
--------------------------------------------------------
1,340,000 Stow, OH, GO LT Various Purpose Refunding, 4.25% BANs,
12/20/1996 NR 1,344,931
--------------------------------------------------------
1,350,000 Strongsville, OH, IDRB (Series 1994) Weekly VRDNs (Nutro
Machinery Corp., Project)/(Huntington National Bank,
Columbus, OH LOC) A-1 1,350,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 2,700,000 Summit County, OH IDR Weekly VRDNs (Maison Aine Limited
Partnership)/(Society National Bank, Cleveland, OH LOC) P-1 $ 2,700,000
--------------------------------------------------------
4,500,000 Summit County, OH IDR, (Series 1994) Weekly VRDNs (Harry
London Candies, Inc.) /(Bank One, Akron, N.A. LOC) P-1 4,500,000
--------------------------------------------------------
910,000 Summit County, OH IDR, 3.20% TOBs (S.D. Meyers,
Inc.)/(Bank One, Akron, N.A. LOC), Optional Tender
8/15/1996 P-1 910,000
--------------------------------------------------------
385,000 Summit County, OH IDR, 3.35% TOBs (Keltec Industries)/
(Bank One, Akron, N.A. LOC), Optional Tender 9/1/1996 P-1 385,000
--------------------------------------------------------
795,000 Summit County, OH IDR, 3.35% TOBs (Universal Rack)/
(National City Bank, Cleveland, OH LOC), Optional Tender
9/1/1996 P-1 795,000
--------------------------------------------------------
1,245,000 Summit County, OH IDR, 3.50% TOBs (Matech Machine Tool
Co.)/(Bank One, Akron, N.A. LOC), Optional Tender
5/1/1996 P-1 1,245,000
--------------------------------------------------------
725,000 Summit County, OH IDR, 3.80% TOBs (Bechmer-Boyce
Project)/(Society National Bank, Cleveland, OH LOC),
Optional Tender 7/15/1996 P-1 725,000
--------------------------------------------------------
1,075,000 Summit County, OH IDR, 3.95% TOBs (Rogers Industrial
Products, Inc.)/(Bank One, Akron, N.A. LOC), Optional
Tender 5/1/1996 P-1 1,075,000
--------------------------------------------------------
960,000 Summit County, OH IDR, Bonds (Series 1994) Weekly VRDNs
(Austin Printing Co., Inc.)/(Bank One,
Akron, N.A. LOC) P-1 960,000
--------------------------------------------------------
2,890,000 Summit County, OH IDR, IDRB (Series 1994B) Weekly VRDNs
(Harry London Candies, Inc.)/(Bank One,
Akron, N.A. LOC) P-1 2,890,000
--------------------------------------------------------
1,000,000 Summit County, OH IDR, IDRB (Series 1995) Weekly VRDNs
(Cardtech Project (OH))/(Society National Bank,
Cleveland, OH LOC) P-1 1,000,000
--------------------------------------------------------
1,550,000 Summit County, OH IDR, Industrial Development Bonds
(Series 1996) Weekly VRDNs (Creative Screen Print
Project)/(National City, Northeast LOC) P-1 1,550,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 1,500,000 Summit County, OH IDR, Multi-Mode Variable Rate I Weekly
VRDNs (Mastergraphics, Inc. Project)/(Society National
Bank, Cleveland, OH LOC) P-1 $ 1,500,000
--------------------------------------------------------
3,000,000 Toledo, OH, City Services Special Assessment Notes
(Series 1995), 4.32% TRANs (Bank of Tokyo-Mitsubishi
LTD. LOC), 7/31/1996 MIG1 3,004,530
--------------------------------------------------------
1,000,000 Toledo-Lucas County, OH Port Authority, IDA Weekly VRDNs
(Medusa Corp.)/(Bayerische Vereinsbank AG, Munich LOC) VMIG1 1,000,000
--------------------------------------------------------
2,700,000 Trumbull County, OH IDA, (Series 1989) Weekly VRDNs
(McSonald Steel Corp.)/(PNC Bank, N.A. LOC) A-1 2,700,000
--------------------------------------------------------
1,355,000 Trumbull County, OH IDA, IDR Refunding Bonds (Series
1994) Weekly VRDNs (Churchill Downs, Inc.)/ (Bank One,
Columbus, N.A. LOC) P-1 1,355,000
--------------------------------------------------------
1,750,000 Trumbull County, OH, Correctional Facilities GO LT
Notes, 1996 Renewal, 4.07% BANs, 4/10/1997 NR 1,754,288
--------------------------------------------------------
715,000 Trumbull County, OH, Various Purpose GO LT Notes (Series
1996), 4.00% BANs, 10/10/1996 NR 716,082
--------------------------------------------------------
3,000,000 University of Cincinnati, OH, General Receipts
Anticipation Notes-Series T, 4.25% BANs, 8/28/1996 MIG1 3,002,344
--------------------------------------------------------
2,265,000 Wayne County, OH, Health Care Facility Revenue Bonds
(Series 1995) Weekly VRDNs (D & M Realty Project)/ (Bank
One, Youngstown, NA LOC) P-1 2,265,000
--------------------------------------------------------
2,000,000 Wayne Local School District, OH, School Improvement GO
UT, 4.34% BANs, 7/18/1996 NR 2,002,674
--------------------------------------------------------
3,800,000 Westlake, OH, IDR Weekly VRDNs (Kahal Limited
Partnership)/(Society National Bank, Cleveland, OH LOC) P-1 3,800,000
--------------------------------------------------------
1,140,000 Willoughby City, OH, IDR Refunding Bonds (Series 1995A)
Weekly VRDNs (Pine Ridge Shopping Center Company
Project)/(Star Bank, NA, Cincinnati LOC) P-1 1,140,000
--------------------------------------------------------
1,230,000 Willoughby City, OH, IDR Revenue Bonds (Series 1995 B)
Weekly VRDNs (Pine Ridge Shopping Center Company
Project)/(Star Bank, NA, Cincinnati LOC) P-1 1,230,000
--------------------------------------------------------
</TABLE>
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- -------------------------------------------------------- ------- ------------
SHORT-TERM MUNICIPALS--CONTINUED
<C> <C> <S> <C> <C>
- --------------------------------------------------------------------------
$ 1,400,000 Wood County, OH Weekly VRDNs (Principle Business
Enterprises)/(National City Bank, Cleveland, OH LOC) P-1 $ 1,400,000
--------------------------------------------------------
2,200,000 Wood County, OH, EDRB Weekly VRDNs (Roe Inc.
Project)/(Huntington National Bank, Columbus, OH LOC) P-1 2,200,000
--------------------------------------------------------
5,095,000 (a) Youngstown City School District, OH, Municipal
Installment Trust Receipts (Series 1994-A) Weekly VRDNs
(Internationale Nederlanden Bank N.V. LIQ)/
(Internationale Nederlanden Bank N.V. LOC) A-1+ 5,095,000
-------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $279,980,691
-------------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 45.2% of the
portfolio as calculated based upon total portfolio market value.
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
(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. At the end of
the period, these securities amounted to $13,500,000 which represents 4.8%
of net assets.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($278,660,577) at April 30, 1996.
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
BANs -- Bond Anticipation Notes
COL -- Collateralized
CP -- Commercial Paper
CSD -- Central School District
EDRB -- Economic Development Revenue Bonds
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bond
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
LT -- Limited Tax
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
PRF -- Prerefunded
SA -- Support Agreement
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $279,980,691
- --------------------------------------------------------------------------------
Cash 84,672
- --------------------------------------------------------------------------------
Income receivable 2,458,884
- -------------------------------------------------------------------------------- ------------
Total assets 282,524,247
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $3,004,530
- -------------------------------------------------------------------
Income distribution payable 722,931
- -------------------------------------------------------------------
Accrued expenses 136,209
- ------------------------------------------------------------------- ----------
Total liabilities 3,863,670
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 278,660,577 shares outstanding $278,660,577
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- --------------------------------------------------------------------------------
$58,049,545 / 58,049,545 shares outstanding $1.00
- -------------------------------------------------------------------------------- ------------
CASH II SHARES:
- --------------------------------------------------------------------------------
$199,898,028 / 199,898,028 shares outstanding $1.00
- -------------------------------------------------------------------------------- ------------
INSTITUTIONAL SHARES:
- --------------------------------------------------------------------------------
$20,713,004 / 20,713,004 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------
Interest $5,649,109
- ---------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 581,552
- -------------------------------------------------------------------------
Administrative personnel and services fee 109,936
- -------------------------------------------------------------------------
Custodian fees 37,930
- -------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 72,560
- -------------------------------------------------------------------------
Directors'/Trustees' fees 2,116
- -------------------------------------------------------------------------
Auditing fees 7,572
- -------------------------------------------------------------------------
Legal fees 2,113
- -------------------------------------------------------------------------
Portfolio accounting fees 46,100
- -------------------------------------------------------------------------
Distribution services fee-Cash II Shares 309,994
- -------------------------------------------------------------------------
Shareholder services fee-Institutional Service Shares 99,969
- -------------------------------------------------------------------------
Shareholder services fee-Cash II Shares 258,329
- -------------------------------------------------------------------------
Shareholder services fee-Institutional Shares 5,173
- -------------------------------------------------------------------------
Share registration costs 26,859
- -------------------------------------------------------------------------
Printing and postage 11,353
- -------------------------------------------------------------------------
Insurance premiums 4,010
- -------------------------------------------------------------------------
Miscellaneous 2,867
- ------------------------------------------------------------------------- ----------
Total expenses 1,578,433
- -------------------------------------------------------------------------
Waivers
- -------------------------------------------------------------------------
Waiver of investment advisory fee $(170,725)
- -------------------------------------------------------------
Waiver of distribution services fee-Cash II Shares (186,033)
- -------------------------------------------------------------
Waiver of shareholder services fee-Institutional Service
Shares (75,537)
- -------------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares (5,173)
- ------------------------------------------------------------- ---------
Total waivers (437,468)
- ------------------------------------------------------------------------- ----------
Net expenses 1,140,965
- --------------------------------------------------------------------------------------- ----------
Net investment income $4,508,144
- --------------------------------------------------------------------------------------- ----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 4,508,144 $ 8,010,653
- ------------------------------------------------------ ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income
- ------------------------------------------------------
Institutional Service Shares (1,323,080) (2,660,655)
- ------------------------------------------------------
Cash II Shares (3,113,571) (5,349,998)
- ------------------------------------------------------
Institutional Shares (71,493) --
- ------------------------------------------------------ ----------------- -----------------
Change in net assets resulting from distributions
to shareholders (4,508,144) (8,010,653)
- ------------------------------------------------------ ----------------- -----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 700,721,901 1,275,288,208
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 2,638,871 5,470,332
- ------------------------------------------------------
Cost of shares redeemed (685,865,650) (1,238,142,557)
- ------------------------------------------------------ ----------------- -----------------
Change in net assets resulting from share
transactions 17,495,122 42,615,983
- ------------------------------------------------------ ----------------- -----------------
Change in net assets 17,495,122 42,165,983
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 261,165,455 218,549,472
- ------------------------------------------------------ ----------------- -----------------
End of period $ 278,660,577 $ 261,165,455
- ------------------------------------------------------ ----------------- -----------------
</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>
PERIOD ENDED
(UNAUDITED)
APRIL 30,
1996(A)
-------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- -----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------
Net investment income 0.01
- -----------------------------------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------------------------------
Distributions from net investment income (0.01)
- ----------------------------------------------------------------------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ----------------------------------------------------------------------- ---------
TOTAL RETURN(B) 0.52%
- -----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------------------
Expenses 0.37%*
- -----------------------------------------------------------------------
Net investment income 3.47%*
- -----------------------------------------------------------------------
Expense waiver(c) 0.53%*
- -----------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------
Net assets, end of period (000 omitted) $20,713
- -----------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 5, 1996 (date of initial
public investment) to April 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED OCTOBER 31,
APRIL 30, -----------------------------------------------
1996 1995 1994 1993 1992 1991(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 0.04 0.02 0.02 0.03 0.02
- -----------------------------------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.02) (0.04) (0.02) (0.02) (0.03) (0.02 )
- ----------------------------------- -------- ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------- -------- ------ ------ ------ ------ -------
TOTAL RETURN(B) 1.66% 3.61% 2.41% 2.33% 3.21% 2.40 %
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.57%* 0.57% 0.55% 0.48% 0.46% 0.35 %*
- -----------------------------------
Net investment income 3.31%* 3.56% 2.36% 2.30% 3.10% 4.46 %*
- -----------------------------------
Expense waiver(c) 0.30%* 0.29% 0.07% 0.19% 0.25% 0.32 %*
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period (000
omitted) $58,050 $72,931 $62,499 $81,748 $74,342 $44,771
- -----------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH II SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
1996 1995 1994 1993 1992 1991(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 0.02 0.03 0.02
- --------------------------------
LESS DISTRIBUTIONS
- --------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.02) (0.03) (0.02 )
- -------------------------------- --------- ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------- --------- ------ ------ ------ ------ -------
TOTAL RETURN(B) 1.51% 3.30% 2.10% 2.02% 2.90% 2.27 %
- --------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------
Expenses 0.87%* 0.87% 0.85% 0.78% 0.76% 0.63 %*
- --------------------------------
Net investment income 3.01%* 3.25% 2.09% 2.01% 2.86% 4.18 %*
- --------------------------------
Expense waiver(c) 0.30%* 0.29% 0.24% 0.19% 0.25% 0.34 %*
- --------------------------------
SUPPLEMENTAL DATA
- --------------------------------
Net assets, end of period (000
omitted) $199,898 $188,234 $156,051 $127,017 $133,877 $94,081
- --------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Ohio Municipal Cash Trust (the
"Fund"), a non-diversified portfolio. 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 three classes of shares: Institutional Service Shares
(Effective March 5, 1996, the Fund's Institutional Shares changed to
Institutional Service Shares), Cash II Shares and Institutional Shares
(Effective March 5, 1996, the Fund added Institutional Shares).
The investment objective of the Fund is current income exempt from federal
regular income tax and the personal income taxes imposed by the state of Ohio
and Ohio municipalities consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
reduce the credit risk associated with such factors, at April 30, 1996,
72.6% 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 from any one institution or
agency did not exceed 13.1% 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 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, 1996
is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
----------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Ohio HFA, Single Family Mortgage (Series PT-71) Weekly VRDNs 03/05/96 $8,405,000
Youngstown City School District, OH, Municipal Installment Trust
Receipts (Series 1994-A) Weekly VRDNs 01/04/95 5,095,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $278,660,577.
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1996 OCTOBER 31, 1995
- -------------------------------------------------------- --------------- ----------------
<S> <C> <C>
Shares sold 293,754,110 571,719,826
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 109,464 277,721
- --------------------------------------------------------
Shares redeemed (308,745,118) (561,565,338)
- -------------------------------------------------------- ------------- -------------
Net change resulting from Institutional Service Share
transactions (14,881,544) 10,432,209
- -------------------------------------------------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
CASH II SHARES APRIL 30, 1996 OCTOBER 31, 1995
- -------------------------------------------------------- --------------- ----------------
<S> <C> <C>
Shares sold 360,520,811 703,568,382
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 2,517,463 5,192,611
- --------------------------------------------------------
Shares redeemed (351,374,612) (676,577,219)
- -------------------------------------------------------- ------------- -------------
Net change resulting from Cash II Share transactions 11,663,662 32,183,774
- -------------------------------------------------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
INSTITUTIONAL SHARES APRIL 30, 1996*
- ------------------------------------------------------- ----------------
<S> <C> <C>
Shares sold 46,446,980
- -------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 11,944
- -------------------------------------------------------
Shares redeemed (25,745,920)
- ------------------------------------------------------- ------------
Net change resulting from Institutional Share
transactions 20,713,004
- ------------------------------------------------------- ------------
Net change resulting from Fund share transactions 17,495,122 42,615,983
- ------------------------------------------------------- ------------ -----------
</TABLE>
* Reflects operations for the period from March 5, 1996 (date of initial public
investment) to April 30, 1996.
(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 0.40% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse certain
OHIO MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp.("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Cash II Shares. The Plan provides that the Fund may incur
distribution expenses up to 0.30% of the average daily net assets of the Cash II
shares, annually, to compensate FSC. FSC may voluntarily choose to waive any
portion of its fee. The distributor can modify or terminate this voluntary
waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of daily average net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
For the six month period ended April 30, 1996, Institutional Shares fully waived
its shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $270,795,000 and
$262,420,000, 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
OHIO
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1996
[LOGO] FEDERATED INVESTORS
Since 1955
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 314229659
Cusip 314229857
Cusip 314229840
2052903 (6/96)
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, which covers the
six-month period from November 1, 1995 through April 30, 1996. The report begins
with a discussion with the fund's portfolio manager, followed by a complete
listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares,
Institutional Service Shares, and Cash Series Shares.
The fund is a convenient way to put your ready cash to work pursuing
triple-tax-free income--free from federal regular income tax, state income tax,
and state personal property tax*--through a portfolio concentrated in
high-quality, short-term Pennsylvania municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid triple-tax free dividends of $0.02 per
share for Institutional Shares, $0.02 per share for Institutional Service
Shares, and $0.01 per share for Cash Series Shares. Its total net assets of
$265.2 million were spread among Pennsylvania securities that use municipal bond
financing for projects as varied as health care, housing, community development,
and transportation.
You can count on Pennsylvania Municipal Cash Trust to seek the best tax-free
income opportunities for your cash investment needs. As always, we will continue
to provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1996
*Income may be subject to the federal alternative minimum tax.
**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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q
Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A
The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ended in April 1996. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50% to
the current 5.25% at the end of January 1996. For the December 1995 move, the
Fed cited a better-than-expected inflation outlook as the impetus behind the
easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed appeared
swayed by the dampening effects of high debt loads and employment uncertainty on
consumer consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q
How has the fund's yield responded to this interest rate environment?
A
The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly
- --------------------------------------------------------------------------------
basis than Treasury yields and taxable money fund yields. In general, yields on
municipal money market funds were lower over the period. For the fund, the
seven-day net yield of the Institutional Shares on April 30, 1996, was 3.50%,
compared to 3.58% on November 1, 1995.* For the Institutional Service Shares,
the seven-day net yield was 3.30% on April 30, 1996, compared to 3.38% on
November 1, 1995.* For the Cash Series Shares, the seven-day net yield was 2.90%
on April 30, 1996, compared to 2.98% on November 1, 1995.*
Q
What was your strategy for managing the fund over the period?
A
The fund started the period with an average maturity of 63 days, reflecting
a neutral to slightly bullish outlook on short-term interest rates. Because
the supply of attracively priced fixed-rate notes and bonds in Pennsylvania
was readily available, we kept the average maturity of the fund targeted between
55 to 70 days, reflecting the value offered in the marketplace for fixed-rate
notes. At the end of the period, the average maturity was 61 days, reflecting
our assessment of more neutral Fed policy for the balance of 1996. If fixed-rate
securities continue to offer relative value when compared to shorter-term
overnight or weekly notes, we expect to maintain this average maturity between
55 and 65 days over the near-term.
Q
What is your outlook for the near future?
A
With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we anticipate the average
maturity of the fund to be slightly longer throughout the summer months.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
PENNSYLVANIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--99.0%
- --------------------------------------------------------------------------------------
PENNSYLVANIA--99.0%
-----------------------------------------------------------------------
$ 1,000,000 Allegheny County, PA IDA, (Series 1991) Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd, Osaka LOC) P-1 $ 1,000,000
-----------------------------------------------------------------------
1,500,000 Allegheny County, PA IDA, (Series 1991B) Weekly VRDNs (Shandon,
Inc.)/(PNC Bank, N.A. LOC) P-1 1,500,000
-----------------------------------------------------------------------
6,500,000 Allegheny County, PA IDA, 3.50% CP (Duquesne Light Power Co.)/(Barclays
Bank PLC, London LOC), Mandatory Tender 6/6/1996 A-1+ 6,500,000
-----------------------------------------------------------------------
4,850,000 Allegheny County, PA IDA, Commercial Development Revenue Bonds (Series
1992) Weekly VRDNs (Eleven Parkway Center Associates)/(Integra Bank,
Pittsburgh LOC) A-1 4,850,000
-----------------------------------------------------------------------
5,000,000 Allegheny County, PA IDA, PCR (Series 1992A), 3.75% TOBs (Duquesne
Light Power Co.)/(Canadian Imperial Bank of Commerce, Toronto LOC),
Optional Tender
11/7/1996 P-1 5,000,000
-----------------------------------------------------------------------
3,000,000 Beaver County, PA IDA, PCR Refunding Bonds (1992 Series-E), 3.25% CP
(Toledo Edison Co.)/(Toronto-Dominion Bank LOC), Mandatory Tender
6/5/1996 A-1+ 3,000,000
-----------------------------------------------------------------------
4,000,000 Bedford County, PA IDA, IDRB's (Series 1985) Weekly VRDNs (Sepa, Inc.
Facility)/(Banque Paribas LOC) A-2 4,000,000
-----------------------------------------------------------------------
1,260,000 Berks County, PA IDA Weekly VRDNs (ADC Quaker Maid Meats)/(Meridian
Bank, Reading, PA LOC) VMIG1 1,260,000
-----------------------------------------------------------------------
1,245,000 Berks County, PA IDA Weekly VRDNs (Beacon Container)/ (Corestates Bank
N.A., Philadelphia, PA LOC) P-1 1,245,000
-----------------------------------------------------------------------
1,900,000 Berks County, PA IDA, (Series 1988) Weekly VRDNs (Arrow Electronics,
Inc.)/(Corestates Bank N.A., Philadelphia, PA LOC) P-1 1,900,000
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
$ 2,000,000 Berks County, PA IDA, Mfg Facilities Revenue Bonds (Series 1995) Weekly
VRDNs (Grafika Commercial Printing, Inc.)/(Meridian Bank, Reading, PA
LOC) P-1 $ 2,000,000
-----------------------------------------------------------------------
560,000 Berks County, PA IDA, Revenue Bonds (Series 1995A/ Subseries A) Weekly
VRDNs (Meridian Bank, Reading, PA LOC) P-1 560,000
-----------------------------------------------------------------------
1,285,000 Berks County, PA IDA, Revenue Bonds (Series 1995A/ Subseries B) Weekly
VRDNs (Meridian Bank, Reading, PA LOC) P-1 1,285,000
-----------------------------------------------------------------------
4,000,000 Berks County, PA, (Series 1996), 4.50% TRANs, 12/31/1996 NR 4,012,817
-----------------------------------------------------------------------
2,445,000 Bucks County, PA IDA Weekly VRDNs (Double H Plastics, Inc.)/(Meridian
Bank, Reading, PA LOC) VMIG1 2,445,000
-----------------------------------------------------------------------
2,835,000 Bucks County, PA IDA Weekly VRDNs (Pennsylvania Associates)/(Meridian
Bank, Reading, PA LOC) P-1 2,835,000
-----------------------------------------------------------------------
4,500,000 Bucks County, PA IDA, (Series 1991) Weekly VRDNs (Cabot Medical
Corp.)/(Meridian Bank, Reading, PA LOC) VMIG1 4,500,000
-----------------------------------------------------------------------
1,360,000 Bucks County, PA IDA, Variable Rate Environmental Improvement Revenue
Bonds (Series 1995), 3.70% TOBs (USX Corp.)/(Wachovia Bank of NC, NA,
Winston-Salem LOC), Mandatory Tender 5/1/1996 A-1+ 1,360,000
-----------------------------------------------------------------------
1,000,000 Butler County, PA IDA Weekly VRDNs (Mine Safety Appliances Co.)/(Sanwa
Bank Ltd, Osaka LOC) P-1 1,000,000
-----------------------------------------------------------------------
3,000,000 Butler County, PA IDA Weekly VRDNs (Mine Safety Appliances Co.)/(Sanwa
Bank Ltd, Osaka LOC) P-1 3,000,000
-----------------------------------------------------------------------
1,000,000 Butler County, PA IDA, (Series 1992B) Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd, Osaka LOC) P-1 1,000,000
-----------------------------------------------------------------------
2,385,000 Butler County, PA IDA, IDRB (Series 1994) Weekly VRDNs (Lue-Rich
Holding Company, Inc. Project)/(ABN AMRO Bank N.V., Amsterdam LOC) A-1+ 2,385,000
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
$ 700,000 Cambria County, PA IDA Weekly VRDNs (Cambria Cogeneration)/(Fuji Bank,
Ltd., Tokyo LOC) P-1 $ 700,000
-----------------------------------------------------------------------
11,000,000 Cambria Township, PA Water Authority, Industrial User Revenue Bonds
(Series 1993A), 3.90% TOBs (Banque Paribas, Paris LOC), Mandatory
Tender 6/1/1996 VMIG1 11,000,000
-----------------------------------------------------------------------
1,700,000 Carbon County, PA IDA Weekly VRDNs (Summit Management & Utilities,
Inc.)/(PNC Bank, N.A. LOC) A-1 1,700,000
-----------------------------------------------------------------------
5,000,000 Carbon County, PA IDA, 3.50% CP (Panther Creek)/ (National Westminster
Bank, PLC, London LOC), Mandatory Tender 5/23/1996 A-1+ 5,000,000
-----------------------------------------------------------------------
2,620,000 Carbon County, PA IDA, Resource Recovery Bonds, 3.25% CP (Panther
Creek)/(National Westminster Bank, PLC, London LOC), Mandatory Tender
7/24/1996 A-1+ 2,620,000
-----------------------------------------------------------------------
6,825,000 Carbon County, PA IDA, Resource Recovery Bonds, 3.55% CP (Panther
Creek)/(National Westminster Bank, PLC, London LOC), Mandatory Tender
7/11/1996 A-1+ 6,825,000
-----------------------------------------------------------------------
5,000,000 Carbon County, PA IDA, Solid Waste Disposal Revenue Notes (Series
1995B), 3.90% RANs (Horsehead Resource Development, Inc.)/(Chemical
Bank, New York LOC),
12/3/1996 A-1+ 5,000,000
-----------------------------------------------------------------------
7,300,000 Clearfield County, PA IDA Weekly VRDNs (Penn Traffic Co.)/(ABN AMRO
Bank N.V., Amsterdam LOC) P-1 7,300,000
-----------------------------------------------------------------------
8,000,000 Clinton County, PA IDA, Solid Waste Disposal Revenue Bonds (Series
1992A), 3.80% TOBs (International Paper Co.), Optional Tender 1/15/1997 A-2 8,000,000
-----------------------------------------------------------------------
3,000,000 Clinton County, PA, IDA Weekly VRDNs (Armstrong World Industries,
Inc.)/(Mellon Bank NA, Pittsburgh LOC) P-1 3,000,000
-----------------------------------------------------------------------
17,000,000 Commonwealth of Pennsylvania, (First Series of 1995-1996), 4.50% TANs,
6/28/1996 SP-1+ 17,019,201
-----------------------------------------------------------------------
$ 1,500,000 Cumberland County, PA IDA, Industrial Development Bonds (Series 1994)
Weekly VRDNs (Lane Enterprises, Inc. Project)/(Meridian Bank, Reading,
PA LOC) P-1 $ 1,500,000
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
400,000 Erie County, PA IDA Weekly VRDNs (P.H.B. Project)/(PNC Bank, N.A. LOC) P-1 400,000
-----------------------------------------------------------------------
425,000 Erie County, PA IDA, (Series 1985) Weekly VRDNs (R. P-C Value,
Inc.)/(PNC Bank, N.A. LOC) P-1 425,000
-----------------------------------------------------------------------
500,000 Erie County, PA IDA, (Series B) Weekly VRDNs (P.H.B. Project)/(PNC
Bank, N.A. LOC) P-1 500,000
-----------------------------------------------------------------------
1,665,000 Erie County, PA IDA, Multi Mode Revenue Refunding Bonds Weekly VRDNs
(Corry Manor, Inc.)/(PNC Bank, N.A. LOC) A-1 1,665,000
-----------------------------------------------------------------------
500,000 Forest County, PA IDA Weekly VRDNs (Industrial Timber & Land
Co.)/(National City Bank, Cleveland, OH LOC) P-1 500,000
-----------------------------------------------------------------------
1,280,000 Forest County, PA IDA Weekly VRDNs (Marienville Health Care
Facility)/(PNC Bank, N.A. LOC) P-1 1,280,000
-----------------------------------------------------------------------
1,800,000 Franklin County, PA IDA Weekly VRDNs (The Guarriello Limited
Partnership)/(PNC Bank, N.A. LOC) P-1 1,800,000
-----------------------------------------------------------------------
2,800,000 Lackawanna County, PA IDA, (Series 1992) Weekly VRDNs (Hem
Project)/(Corestates Bank N.A., Philadelphia, PA LOC) P-1 2,800,000
-----------------------------------------------------------------------
1,856,092 Lawrence County, PA IDA, (Series 1989A) Weekly VRDNs (Ellwood Uddeholm
Steel Co.)/(Society National Bank, Cleveland, OH LOC) P-1 1,856,092
-----------------------------------------------------------------------
1,000,000 Lehigh County, PA General Purpose Authority, Revenue Bonds (Series
1990) Weekly VRDNs (Phoebe Terrace, Inc.)/ (Meridian Bank, Reading, PA
LOC) P-1 1,000,000
-----------------------------------------------------------------------
3,100,000 Lehigh County, PA IDA, (Series 1989A) Weekly VRDNs (Hershey Pizza Co.,
Inc.)/(PNC Bank, N.A. LOC) A-1 3,100,000
-----------------------------------------------------------------------
5,000,000 Luzerne Co, PA, 3.85% TRANs, 12/31/1996 NR 5,004,811
-----------------------------------------------------------------------
$ 1,650,000 Marple Township, PA, (Series 1996), 4.25% TRANs,
12/31/1996 NR $ 1,656,902
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
790,000 McKean County, PA IDA, Multi-Mode Revenue Refunding Bonds Weekly VRDNs
(Bradford Manor, Inc.)/(PNC Bank, N.A. LOC) A-1 790,000
-----------------------------------------------------------------------
3,300,000 Monroe County, PA IDA, PCR Weekly VRDNs (Cooper Industries,
Inc.)/(Sanwa Bank Ltd, Osaka LOC) A-1 3,300,000
-----------------------------------------------------------------------
1,070,000 Montgomery County, PA Higher Education and Health Authority, (Series
1992) Weekly VRDNs (Pottstown Healthcare Corporation Project)/(Meridian
Bank, Reading, PA LOC) VMIG1 1,070,000
-----------------------------------------------------------------------
1,300,000 Montgomery County, PA IDA, (Series 1992) Weekly VRDNs (RJI Limited
Partnership)/(Meridian Bank, Reading, PA LOC) VMIG1 1,300,000
-----------------------------------------------------------------------
2,800,000 Montgomery County, PA IDA, (Series 84) Weekly VRDNs (Thomas & Betts
Corp.)/(Wachovia Bank of NC, NA, Winston-Salem LOC) P-1 2,800,000
-----------------------------------------------------------------------
5,075,000 Moon Township, PA IDA Weekly VRDNs (Airport Hotel Associates)/(ABN AMRO
Bank N.V., Amsterdam LOC) A-1+ 5,075,000
-----------------------------------------------------------------------
3,250,000 Norristown, PA, (Series 1996), 3.75% TRANs, 12/31/1996 NR 3,250,000
-----------------------------------------------------------------------
3,850,000 Northampton County, PA IDA, 3.35% CP (Citizens Utilities Co.),
Mandatory Tender 5/15/1996 AAA 3,850,000
-----------------------------------------------------------------------
9,000,000 Northampton County, PA IDA, 3.65% CP (Citizens Utilities Co.),
Mandatory Tender 7/11/1996 A-1+ 9,000,000
-----------------------------------------------------------------------
1,590,000 Northumberland County PA IDA, Revenue Bonds (Series A of 1995) Weekly
VRDNs (Furman Farms, Inc. Project)/ (Meridian Bank, Reading, PA LOC) P-1 1,590,000
-----------------------------------------------------------------------
1,800,000 Pennsylvania Education Development Authority Weekly VRDNs (Cyrogenics,
Inc.)/(PNC Bank, N.A. LOC) A-1 1,800,000
-----------------------------------------------------------------------
$ 3,000,000 Pennsylvania Education Development Authority Weekly VRDNs (Industrial
Scientific Corp.)/(Mellon Bank NA, Pittsburgh LOC) P-1 $ 3,000,000
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
675,000 Pennsylvania Education Development Authority Weekly VRDNs (Pioneer
Fluid)/(PNC Bank, N.A. LOC) A-1 675,000
-----------------------------------------------------------------------
675,000 Pennsylvania Education Development Authority Weekly VRDNs (RMF
Associates)/(PNC Bank, N.A. LOC) A-1 675,000
-----------------------------------------------------------------------
850,000 Pennsylvania Education Development Authority Weekly VRDNs (Reace
Associates)/(PNC Bank, N.A. LOC) A-1 850,000
-----------------------------------------------------------------------
4,300,000 Pennsylvania Education Development Authority Weekly VRDNs (Walnut And
Craig)/(PNC Bank, N.A. LOC) P-1 4,300,000
-----------------------------------------------------------------------
500,000 Pennsylvania Education Development Authority, (Series B) Weekly VRDNs
(Payne Printing Co.)/(PNC Bank, N.A. LOC) A-1 500,000
-----------------------------------------------------------------------
1,000,000 Pennsylvania Education Development Authority, Economic Development
Revenue Bonds (Series 1996C) Weekly VRDNs (Napco, Inc. Project)/(Mellon
Bank NA, Pittsburgh LOC) P-1 1,000,000
-----------------------------------------------------------------------
1,075,000 Pennsylvania Education Development Authority, Revenue Bonds (Series G4)
Weekly VRDNs (Metamora Products)/ (PNC Bank, N.A. LOC) A-1 1,075,000
-----------------------------------------------------------------------
300,000 Pennsylvania Education Development Authority, Revenue Bonds Weekly
VRDNs (DDI Pharmaceuticals, Inc.)/(PNC Bank, N.A. LOC) A-1 300,000
-----------------------------------------------------------------------
500,000 Pennsylvania Education Development Authority, Revenue Bonds Weekly
VRDNs (RAM Forest Products)/(PNC Bank, N.A. LOC) A-1 500,000
-----------------------------------------------------------------------
6,700,000 Pennsylvania Housing Finance Authority, 3.50% TOBs (First National Bank
of Chicago LIQ), Optional Tender 10/1/1996 NR(2) 6,700,000
-----------------------------------------------------------------------
$ 980,000 Pennsylvania Housing Finance Authority, Section 8 Assisted Residential
Development Refunding Bonds (Series 1992A) Weekly VRDNs (CGIC
INS)/(Citibank NA, New York LIQ) P-1 $ 980,000
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
2,210,000 Pennsylvania Housing Finance Authority, Single Family Housing (Series
O), 4.00% TOBs (Meridian Bank, Reading, PA LIQ), Optional Tender
5/1/1996 NR(2) 2,210,000
-----------------------------------------------------------------------
3,300,000 Pennsylvania State University, Series of 1996, 4.25% BANs, 4/4/1997 MIG1 3,322,124
-----------------------------------------------------------------------
7,000,000 Philadelphia, PA IDA, 4.25% TOBs (Suite Hotel)/(First National Bank of
Boston, MA LOC), Optional Tender 6/1/ 1996 P-1 7,000,000
-----------------------------------------------------------------------
3,700,000 Philadelphia, PA IDA, Commercial Development Revenue Bonds (Series A),
4.00% TOBs (Economy Inn)/(First National Bank of Boston, MA LOC),
Optional Tender 7/1/ 1996 P-1 3,700,000
-----------------------------------------------------------------------
1,700,000 Philadelphia, PA IDA, Commercial Development Revenue Bonds (Series B),
4.00% TOBs (Economy Inn)/(First National Bank of Boston, MA LOC),
Optional Tender 7/1/ 1996 A-1 1,700,000
-----------------------------------------------------------------------
5,500,000 Philadelphia, PA, (Series A), 4.50% TRANs, 6/27/1996 SP-1 5,504,127
-----------------------------------------------------------------------
5,000,000 Port Authority of Allegheny County, PA, (Series 1995A), 3.875% GANs
(PNC Bank, N.A. LOC), 6/28/1996 MIG1 5,000,000
-----------------------------------------------------------------------
20,000 Sayre, PA, Health Care Facilities Authority Weekly VRDNs (VHA of
Pennsylvania)/(AMBAC INS)/(First National Bank of Chicago LIQ) A-1 20,000
-----------------------------------------------------------------------
2,000,000 Schuylkill County, PA IDA, Manufacturing Facilities Revenue Bonds
(Series 1995) Weekly VRDNs (Prime Packing, Inc. Project)/(Corestates
Bank N.A., Philadelphia, PA LOC) VMIG1 2,000,000
-----------------------------------------------------------------------
$ 4,000,000 Temple University, Commonwealth System of Higher Education University
Funding Obligations (Series 1995), 5.00% BANs, 5/22/1996 SP-1+ $ 4,001,540
-----------------------------------------------------------------------
3,824,000 Upper Darby School District, PA, 4.13% TRANs, 6/28/1996 NR(3) 3,824,346
-----------------------------------------------------------------------
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-----------------------------------------------------------------------
5,850,000 Venango, PA IDA, (Series A), 3.55% CP (Scrubgrass Power
Corp.)/(National Westminster Bank, PLC, London LOC), Mandatory Tender
7/12/1996 A-1+ 5,850,000
-----------------------------------------------------------------------
4,000,000 Venango, PA IDA, Resource Recovery Bonds (Series 1993), 3.35% CP
(Scrubgrass Power Corp.)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 5/14/1996 A-1+ 4,000,000
-----------------------------------------------------------------------
2,100,000 Venango, PA IDA, Resource Recovery Bonds (Series 1993), 3.45% CP
(Scrubgrass Power Corp.)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 5/21/1996 A-1+ 2,100,000
-----------------------------------------------------------------------
870,000 Washington County, PA Hospital Authority, (Series 1990) Weekly VRDNs
(Mac Plastics, Inc.)/(National City Bank, Cleveland, OH LOC) VMIG1 870,000
-----------------------------------------------------------------------
2,700,000 Washington County, PA Municipal Authority Facilities, (Series 1985A)
Weekly VRDNs (1985-A Pooled Equipment Lease Program)/(Sanwa Bank Ltd,
Osaka LOC) VMIG1 2,700,000
-----------------------------------------------------------------------
1,200,000 Washington County, PA, IDA (Series 1988) Weekly VRDNs (Coca-Cola
Co.)/(Mellon Bank NA, Pittsburgh LOC) P-1 1,200,000
-----------------------------------------------------------------------
1,000,000 West Cornwall Township, PA Municipal Authority, Revenue Bonds (Series
1995) Weekly VRDNs (Lebanon Valley Brethern Home Project
(PA))/(Meridian Bank, Reading, PA LOC) P-1 1,000,000
-----------------------------------------------------------------------
1,418,000 West York Area School District, PA, (Series 1995), 4.26% TRANs,
6/28/1996 NR(3) 1,418,172
-----------------------------------------------------------------------
2,588,850 Woodland Hills School District, PA, 4.21% TRANs,
6/28/1996 NR 2,589,084
----------------------------------------------------------------------- --------------
Total 262,679,216
----------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST) (A) $ 262,679,216
----------------------------------------------------------------------- --------------
</TABLE>
Securities that are subject to the Alternative Minimum Tax represent 46.5% of
the portfolio as calculated based upon total portfolio market value.
*Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
PENNSYLVANIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($265,248,674) at April 30, 1996.
The following acronyms are used throughout this portfolio:
AMBAC-- American Municipal Bond Assurance Corporation
BANs-- Bond Anticipation Notes
CGIC-- Capital Guaranty Insurance Corporation
CP-- Commercial Paper
GANs-- Grant Anticipation Notes
IDA-- Industrial Development Authority
IDRB-- Industrial Development Revenue Bond
INS-- Insured
LIQ-- Liquidity Agreement
LOC-- Letter of Credit
PCR-- Pollution Control Revenue
PLC-- Public Limited Company
RANs-- Revenue Anticipation Notes
TANs-- Tax Anticipation Notes
TOBs-- Tender Option Bonds
TRANs-- Tax and Revenue Anticipation Notes
VHA-- Veterans Housing Administration
VRDNs-- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 262,679,216
- -------------------------------------------------------------------------------------------------
Cash 660,970
- -------------------------------------------------------------------------------------------------
Income receivable 2,772,695
- ------------------------------------------------------------------------------------------------- --------------
Total assets 266,112,881
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable 719,096
- -----------------------------------------------------------------------------------
Accrued expenses 145,111
- ----------------------------------------------------------------------------------- ------------
Total liabilities 864,207
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 265,248,674 shares outstanding $ 265,248,674
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- -------------------------------------------------------------------------------------------------
$229,695,967 / 229,695,967 shares outstanding $ 1.00
- ------------------------------------------------------------------------------------------------- --------------
CASH SERIES SHARES:
- -------------------------------------------------------------------------------------------------
$16,320,696 / 16,320,696 shares outstanding $ 1.00
- ------------------------------------------------------------------------------------------------- --------------
INSTITUTIONAL SHARES:
- -------------------------------------------------------------------------------------------------
$19,232,011 / 19,232,011 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 5,908,737
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------
Investment advisory fee $ 767,812
- --------------------------------------------------------------------------------------
Administrative personnel and services fee 116,119
- --------------------------------------------------------------------------------------
Custodian fees 21,017
- --------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 33,453
- --------------------------------------------------------------------------------------
Directors'/Trustees' fees 1,140
- --------------------------------------------------------------------------------------
Auditing fees 10,094
- --------------------------------------------------------------------------------------
Legal fees 2,707
- --------------------------------------------------------------------------------------
Portfolio accounting fees 46,518
- --------------------------------------------------------------------------------------
Distribution services fee--Cash Series Shares 37,615
- --------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 345,618
- --------------------------------------------------------------------------------------
Shareholder services fee--Cash Series Shares 23,509
- --------------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 14,678
- --------------------------------------------------------------------------------------
Share registration costs 18,482
- --------------------------------------------------------------------------------------
Printing and postage 15,350
- --------------------------------------------------------------------------------------
Insurance premiums 3,208
- --------------------------------------------------------------------------------------
Miscellaneous 4,163
- -------------------------------------------------------------------------------------- ------------
Total expenses 1,461,483
- --------------------------------------------------------------------------------------
Waivers and reimbursements--
- -------------------------------------------------------------------------
Waiver of investment advisory fee $ (342,275)
- -------------------------------------------------------------------------
Waiver of distribution services fee--Cash Series Shares (4,702)
- -------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service Shares (69,124)
- -------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (14,678)
- ------------------------------------------------------------------------- -----------
Total waivers (430,779)
- -------------------------------------------------------------------------------------- ------------
Net expenses 1,030,704
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 4,878,033
- ---------------------------------------------------------------------------------------------------- ------------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995
<S> <C> <C>
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------------
Net investment income $ 4,878,033 $ 9,679,534
- ------------------------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------------
Distributions from net investment income
- -------------------------------------------------------------------------------
Institutional Service Shares (4,419,298) (8,951,830)
- -------------------------------------------------------------------------------
Cash Series Shares (261,150) (718,640)
- -------------------------------------------------------------------------------
Institutional Shares (197,585) (9,064)
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions to shareholders (4,878,033) (9,679,535)
- ------------------------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------------
Proceeds from sale of shares 508,833,170 1,028,950,579
- -------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of distributions
declared 1,046,137 2,339,163
- -------------------------------------------------------------------------------
Cost of shares redeemed (551,822,398) (971,610,388)
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from share transactions (41,943,091) 59,679,354
- ------------------------------------------------------------------------------- --------------- ---------------
Change in net assets (41,943,091) 59,679,354
- ------------------------------------------------------------------------------- --------------- ---------------
NET ASSETS:
- -------------------------------------------------------------------------------
Beginning of period 307,191,765 247,512,411
- ------------------------------------------------------------------------------- --------------- ---------------
End of period $ 265,248,674 $ 307,191,765
- ------------------------------------------------------------------------------- --------------- ---------------
</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
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1996 1995 1994 1993 1992 1991
<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 0.02 0.03 0.05
- ---------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.02) (0.03) (0.05)
- --------------------------------------------------------- ----- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------- ----- --------- --------- --------- --------- ---------
TOTAL RETURN (B) 1.60% 3.44% 2.25% 2.24% 3.08% 4.64%
- ---------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------
Expenses 0.65%* 0.65% 0.64% 0.57% 0.56% 0.55%
- ---------------------------------------------------------
Net investment income 3.20%* 3.38% 2.19% 2.21% 3.04% 4.53%
- ---------------------------------------------------------
Expense waiver/reimbursement (c) 0.27%* 0.27% 0.02% 0.12% 0.12% 0.11%
- ---------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------
Net assets, end of period (000 omitted) $229,696 $276,407 $229,160 $318,518 $308,200 $317,165
- ---------------------------------------------------------
<CAPTION>
1990(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- ---------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------
Net investment income 0.05
- ---------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------
Distributions from net
investment income (0.05)
- --------------------------------------------------------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00
- --------------------------------------------------------- ---------
TOTAL RETURN (B) 5.78%
- ---------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------
Expenses 0.50%*
- ---------------------------------------------------------
Net investment income 5.56%*
- ---------------------------------------------------------
Expense waiver/reimbursement (c) 0.18%*
- ---------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------
Net assets, end of period (000 omitted) $275,882
- ---------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH SERIES SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1996 1995 1994 1993 1992 1991(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 0.01 0.03 0.02 0.02 0.03 0.03
- --------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------
Distributions from net investment
income (0.01) (0.03) (0.02) (0.02) (0.03) (0.03)
- -------------------------------------- ------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------- ------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.40% 3.02% 1.84% 1.83% 2.67% 3.55%
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 1.06%* 1.05% 1.04% 0.97% 0.96% 0.78%*
- --------------------------------------
Net investment income 2.79%* 2.98% 1.73% 1.88% 2.64% 3.92%*
- --------------------------------------
Expense waiver/ reimbursement (c) 0.27%* 0.28% 0.18% 0.12% 0.12% 0.28%*
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000
omitted) $16,321 $28,255 $18,352 $18,561 $24,694 $19,846
- --------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995(A)
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENToperations
- -------------------------------------------------------------------------------
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) 1.70% 0.90%
- -------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------
Expenses 0.46%* 0.45%*
- -------------------------------------------------------------------------------
Net investment income 3.35%* 3.81%*
- -------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.45%* 0.46%*
- -------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $19,232 $2,529
- -------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 23, 1995 (date of initial
public investment) to October 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Pennsylvania Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. 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 three classes of shares: Institutional Service Shares,
Cash Series Shares, and Institutional Shares.
The investment objective of the Fund is current income exempt from federal
regular income tax and the personal income taxes imposed by the Commonwealth of
Pennsylvania consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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, 1996, 69%
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 from any one institution or agency did not
exceed 11% of total investments.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses, and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $265,248,674.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995
-------------- --------------
INSTITUTIONAL SERVICE SHARES SHARES SHARES
- ---------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 452,612,568 940,400,092
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 822,864 1,631,397
- ----------------------------------------------------------------------------------
Shares redeemed (500,146,949) (894,784,261)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service share transactions (46,711,517) 47,247,228
- ---------------------------------------------------------------------------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995
-------------- --------------
CASH SERIES SHARES SHARES SHARES
- ---------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 22,312,631 85,377,025
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 213,778 705,513
- ----------------------------------------------------------------------------------
Shares redeemed (34,460,977) (76,179,429)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Cash Series share transactions (11,934,568) 9,903,109
- ---------------------------------------------------------------------------------- -------------- --------------
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1995
1996 (A)
-------------- --------------
INSTITUTIONAL SHARES SHARES SHARES
- ---------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 33,907,971 3,173,462
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 9,495 2,253
- ----------------------------------------------------------------------------------
Shares redeemed (17,214,472) (646,698)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional share transactions 16,702,994 2,529,017
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions (41,943,091) 59,679,354
- ---------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(a) For the period from August 23, 1995 (date of initial public investment) to
October 31, 1995.
(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 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Cash Series Shares. The Plan provides that the Fund may incur
distribution expenses of up to 0.40% of average daily net assets of the Cash
Series Shares, annually, to compensate FSC. The distributor may voluntarily
choose to waive any portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $211,550,000 and
$284,880,000, 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contain facts concerning
its objective and policies, management fees, expenses and other information.
PENNSYLVANIA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1996
[LOGO] FEDERATED INVESTORS
Since 1955
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 314229717
Cusip 314229881
Cusip 314229204
0052405 (6/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present your Semi-Annual Report to Shareholders of Massachusetts
Municipal Cash Trust, a portfolio of Federated Municipal Trust, which covers the
six-month period from November 1, 1995 through April 30, 1996. The report begins
with a discussion with the fund's portfolio manager, followed by a complete
listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Service Shares and
BayFunds Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and Massachusetts
state income tax*--through a portfolio concentrated in high-quality, short-term
Massachusetts municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.02 per
share for both Institutional Service Shares and BayFunds Shares. Its total net
assets of $160.6 million were spread among Massachusetts securities that use
municipal bond financing for projects as varied as health care, housing,
community development, and transportation.
You can count on Massachusetts Municipal Cash Trust to seek the best tax-free
income opportunities for your cash. As always, we will continue to provide you
with the highest level of service. Your questions or comments are always
welcome.
Sincerely,
Glen R. Johnson
President
June 15, 1996
*Income may be subject to the federal alternative minimum tax.
**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. An investment in
the fund is neither insured nor guaranteed by the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with the Fund's Portfolio Manager, Mary Jo Ochson
Q Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ended April 30, 1996. Faced with slowing
economic growth and benign inflationary pressures, the Fed lowered the
federal funds target rate from 5.75% to 5.50% in late December, and again from
5.50% to the current 5.25% at the end of January. For the December move, the Fed
cited a better-than-expected inflation outlook as the impetus behind the easing,
although a sluggish manufacturing sector and lackluster consumer spending was
thought to have had an influence. In January, the Fed appeared swayed by the
dampening effects of high debt loads and employment uncertainty on consumer
consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March by the report of a 705,000 increase in
non-farm payroll jobs for February--the largest increase in 12 years--which
caused the yields on short-term securities to rise by as much as 25 basis
points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bills began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April at 5.14%.
Correspondingly, the yield on one-year Treasury bills began November at 5.46%,
fell to 4.79% in mid-February, but rose to 5.62% by the end of April.
Q How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts) as well as
supply and demand imbalances unique to the municipal money markets. Because
of these imbalances, however, on a weekly basis the fund's yield
experiences more volatility than Treasury yields and taxable money fund yields.
In general, yields on municipal money market funds were lower over the period.
The seven-day net yield of the fund's Institutional Service Shares on April 30,
1996, was 3.20% compared to 3.34% six months earlier.*
- --------------------------------------------------------------------------------
For the BayFunds Shares, the seven-day net yield was 3.18% on April 30, 1996,
compared to 3.30% six months earlier.*
Q What was your strategy for managing the fund over the period?
A We maintained a neutral average maturity of 55 to 60 days during the
reporting period by taking advantage of the overall improvement in the
Massachusetts economy and buying a variety of local municipal note issues
at attractive levels. Going forward we will continue to monitor the overall rate
environment as well as the economic outlook for the State.
Q What is your outlook for rates in the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only .5%. As a result, the Fed should not feel the
urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July. This spike in supply may present
opportunities to "lock-in" yields which are attractive relative to comparable
maturity taxable securities. As a result, we expect the average maturity of the
fund to be slightly longer throughout the summer months.
*Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
MASSACHUSETTS MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPALS--99.3%
- --------------------------------------------------------------------------------------
MASSACHUSETTS--96.2%
------------------------------------------------------------------------
$ 2,000,000 Attleboro, MA, 3.50% BANs, 2/6/1997 NR(4) $ 2,001,486
------------------------------------------------------------------------
620,000 Billerica, MA, LT GO Bonds, 7.25% Bonds (MBIA INS),
10/15/1996 NR(1) 628,849
------------------------------------------------------------------------
2,000,000 Boston, MA Water & Sewer Commission, General Revenue Bonds (1994 Series
A) Weekly VRDNs (State Street Bank and Trust Co. LOC) VMIG1 2,000,000
------------------------------------------------------------------------
5,000,000 (a) Clipper, MA Tax Exempt Trust Weekly VRDNs (State Street Bank and
Trust Co. LIQ) VMIG1 5,000,000
------------------------------------------------------------------------
3,465,000 (a) Clipper, MA Tax Exempt Trust, (Series 1993-1) Weekly VRDNs (State
Street Bank and Trust Co. LIQ) VMIG1 3,465,000
------------------------------------------------------------------------
3,000,000 Commonwealth of Massachusetts Weekly VRDNs (AMBAC INS)/(Citibank NA, New
York LIQ) NR(1) 3,000,000
------------------------------------------------------------------------
4,000,000 Danvers, Massachusetts, 4.10% BANs, 7/19/1996 NR(3) 4,002,528
------------------------------------------------------------------------
1,000,000 Dracut, MA, 3.75% BANs, 6/28/1996 NR(3) 1,000,234
------------------------------------------------------------------------
3,200,000 Framingham, MA IDA Weekly VRDNs (Perini Corp)/
(Barclays Bank PLC, London LOC) A-1+ 3,200,000
------------------------------------------------------------------------
2,500,000 Gardner, MA, 4.00% BANs, 4/1/1997 NR(4) 2,504,405
------------------------------------------------------------------------
3,093,000 Greenfield, MA, 4.25% BANs, 9/13/1996 NR(3) 3,095,742
------------------------------------------------------------------------
3,925,000 Mashpee, MA, 4.00% BANs, 2/7/1997 NR(3) 3,936,685
------------------------------------------------------------------------
4,000,000 Mashpee, MA, 4.22% BANs, 7/5/1996 NR(3) 4,000,414
------------------------------------------------------------------------
5,300,000 Massachusetts Bay Transit Authority, (Series C), 3.80% CP (Westdeutsche
Landesbank Girozentrale LOC), Mandatory Tender 5/23/1996 SP-1+ 5,300,000
------------------------------------------------------------------------
3,350,000 Massachusetts HEFA Weekly VRDNs (Newbury College)/ (Barclays Bank PLC,
London LOC) P-1 3,350,000
------------------------------------------------------------------------
6,400,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Brigham & Women's
Hospital)/(Sanwa Bank Ltd, Osaka LOC) P-1 6,400,000
------------------------------------------------------------------------
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
------------------------------------------------------------------------
$ 2,300,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Endicott College)/(BayBank,
Burlington, MA LOC) P-2 $ 2,300,000
------------------------------------------------------------------------
3,320,000 Massachusetts HEFA, (Series A) Weekly VRDNs (New England Home For Little
Wanderers)/(First National Bank of Boston, MA LOC) P-1 3,320,000
------------------------------------------------------------------------
2,600,000 Massachusetts HEFA, (Series B) Weekly VRDNs (Clark University)/(Sanwa
Bank Ltd, Osaka LOC) VMIG1 2,600,000
------------------------------------------------------------------------
2,400,000 Massachusetts HEFA, (Series E) Weekly VRDNs (Williams College, MA) A-1+ 2,400,000
------------------------------------------------------------------------
3,000,000 Massachusetts HEFA, (Series E) Daily VRDNs (Capital Asset
Program)/(First National Bank of Chicago LOC) VMIG1 3,000,000
------------------------------------------------------------------------
6,300,000 Massachusetts HEFA, (Series F) Weekly VRDNs (Children's Hospital of
Boston) A-1+ 6,300,000
------------------------------------------------------------------------
2,500,000 Massachusetts HEFA, (Series G) Weekly VRDNs (Massachusetts Institute of
Technology) NR(1) 2,500,000
------------------------------------------------------------------------
1,000,000 Massachusetts HEFA, 3.15% CP (Harvard University), Mandatory Tender
6/7/1996 VMIG1 1,000,000
------------------------------------------------------------------------
5,000,000 Massachusetts HEFA, 3.35% CP (Harvard University), Mandatory Tender
5/23/1996 VMIG1 5,000,000
------------------------------------------------------------------------
6,000,000 Massachusetts HEFA, 3.70% CP (Fallon Heathcare System)/ (Sanwa Bank Ltd,
Osaka LOC), Mandatory Tender 7/5/1996 A-1 6,000,000
------------------------------------------------------------------------
500,000 Massachusetts IFA Weekly VRDNs (Berkshire, MA School)/ (National
Westminster Bank, PLC, London LOC) VMIG1 500,000
------------------------------------------------------------------------
1,300,000 Massachusetts IFA Weekly VRDNs (Groton School)/ (National Westminster
Bank, PLC, London LOC) VMIG1 1,300,000
------------------------------------------------------------------------
1,910,000 Massachusetts IFA, (1995 Series A) Weekly VRDNs (Bradford College
Issue)/(First National Bank of Boston, MA LOC) P-1 1,910,000
------------------------------------------------------------------------
300,000 Massachusetts IFA, (Series 1992) Weekly VRDNs (Holyoke Water Power
Co.)/(Canadian Imperial Bank of Commerce, Toronto LOC) VMIG1 300,000
------------------------------------------------------------------------
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
------------------------------------------------------------------------
$ 1,000,000 Massachusetts IFA, (Series 1992A) Weekly VRDNs (Ogden Haverhill)/(Union
Bank of Switzerland, Zurich LOC) A-1+ $ 1,000,000
------------------------------------------------------------------------
5,000,000 Massachusetts IFA, (Series 1992B), 3.30% CP (New England Power Co.),
Mandatory Tender 5/20/1996 A-1 5,000,000
------------------------------------------------------------------------
3,000,000 Massachusetts IFA, (Series 1992B), 3.55% CP (New England Power Co.),
Mandatory Tender 7/12/1996 A-1 3,000,000
------------------------------------------------------------------------
5,000,000 Massachusetts IFA, (Series 1993A), 4.35% CP (New England Power Co.),
Mandatory Tender 5/21/1996 A-1 5,000,000
------------------------------------------------------------------------
5,800,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Whitehead Institute for
Biomedical Research) VMIG1 5,800,000
------------------------------------------------------------------------
925,000 Massachusetts IFA, (Series A) Weekly VRDNs (Hockomock YMCA)/(Bank of
Nova Scotia, Toronto LOC) P-1 925,000
------------------------------------------------------------------------
4,000,000 Massachusetts IFA, (Series B) Weekly VRDNs (Williston North Hampton
School)/(National Westminster Bank, PLC, London LOC) A-1+ 4,000,000
------------------------------------------------------------------------
1,495,000 Massachusetts IFA, Museum Revenue Refunding Bonds (1996 Issue), 3.80%
Bonds (Museum of Fine Arts, Boston)/ (MBIA INS), 1/1/1997 NR(1) 1,501,816
------------------------------------------------------------------------
1,000,000 Massachusetts IFA, Refunding Revenue Bonds 1994 Project Daily VRDNs
(Showa Womens Institute Boston, Inc.)/(Bank of America NT and SA, San
Francisco LOC) VMIG1 1,000,000
------------------------------------------------------------------------
5,800,000 Massachusetts IFA, Revenue Bonds (Series 1995) Weekly VRDNs (Emerson
College Issue)/(BayBank, Burlington, MA LOC) P-2 5,800,000
------------------------------------------------------------------------
5,000,000 Massachusetts IFA, Revenue Bonds (Series 1995C) Weekly VRDNs (Edgewood
Retirement Community Project)/
(Dresdner Bank Ag, Frankfurt LOC) A-1+ 5,000,000
------------------------------------------------------------------------
3,270,000 Massachusetts State HFA, Multi-Family Housing Refunding Bonds (1995
Series A), 5.00% Bonds (MBIA INS), 7/1/1996 NR(1) 3,274,468
------------------------------------------------------------------------
2,500,000 North Adams, MA, 4.24% BANs, 6/30/1996 NR(3) 2,500,352
------------------------------------------------------------------------
$ 6,000,000 North Andover, MA, 4.00% BANs, 1/23/1997 NR(3) $ 6,009,665
------------------------------------------------------------------------
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
MASSACHUSETTS--CONTINUED
------------------------------------------------------------------------
8,000,000 Springfield, MA , 3.75% BANs (Fleet National Bank, Providence, R.I.
LOC), 7/12/1996 P-1 8,008,603
------------------------------------------------------------------------
1,725,000 Stoughton, MA, 3.51% BANs, 1/30/1997 NR(3) 1,725,742
------------------------------------------------------------------------
2,514,160 Stoughton, MA, 3.75% BANs, 3/7/1997 NR(3) 2,521,376
------------------------------------------------------------------------
1,148,837 Yarmouth, MA, 3.40% RANs, 3/4/1997 NR(3) 1,149,958
------------------------------------------------------------------------ --------------
Total 154,532,323
------------------------------------------------------------------------ --------------
PUERTO RICO--3.1%
------------------------------------------------------------------------
5,000,000 Puerto Rico Government Development Bank, 3.20% CP, Mandatory Tender
5/22/1996 A-1+ 5,000,000
------------------------------------------------------------------------ --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 159,532,323
------------------------------------------------------------------------ --------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1996, these securities amounted
to $8,465,000 which represents 5.3% of net assets.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($160,630,716) at April 30, 1996.
MASSACHUSETTS MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
AMBAC-- American Municipal Bond
Assurance Corporation
BANs--Bond Anticipation Notes
CP--Commercial Paper
GO--General Obligation
HEFA-- Health and Education Facilities Authority
HFA--Housing Finance Authority
IDA--Industrial Development Authority
IFA--Industrial Finance Authority
INS--Insured
LIQ--Liquidity Agreement
LOC--Letter of Credit
LT--Limited Tax
MBIA--Municipal Bond Investors Assurance
PLC--Public Limited Company
RANs--Revenue Anticipation Notes
SA--Support Agreement
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 159,532,323
- -------------------------------------------------------------------------------------------------
Cash 503,179
- -------------------------------------------------------------------------------------------------
Income receivable 1,055,409
- ------------------------------------------------------------------------------------------------- --------------
Total assets 161,090,911
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable $ 410,383
- -------------------------------------------------------------------------------------
Accrued expenses 49,812
- ------------------------------------------------------------------------------------- ----------
Total liabilities 460,195
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 160,630,753 shares outstanding $ 160,630,716
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- -------------------------------------------------------------------------------------------------
$109,957,209 / 109,957,234 shares outstanding $ 1.00
- ------------------------------------------------------------------------------------------------- --------------
BAYFUNDS SHARES:
- -------------------------------------------------------------------------------------------------
$50,673,507 / 50,673,519 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 2,926,324
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 399,200
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 77,184
- ---------------------------------------------------------------------------------------
Custodian fees 13,450
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 34,819
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 1,002
- ---------------------------------------------------------------------------------------
Auditing fees 6,632
- ---------------------------------------------------------------------------------------
Legal fees 1,826
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 28,164
- ---------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 136,466
- ---------------------------------------------------------------------------------------
Shareholder services fee--BayFunds Shares 63,135
- ---------------------------------------------------------------------------------------
Share registration costs 5,994
- ---------------------------------------------------------------------------------------
Printing and postage 21,220
- ---------------------------------------------------------------------------------------
Insurance premiums 2,728
- ---------------------------------------------------------------------------------------
Miscellaneous 4,214
- --------------------------------------------------------------------------------------- -----------
Total expenses 796,034
- ---------------------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------------------------
Waiver of investment advisory fee $ (145,940)
- --------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service Shares (136,466)
- --------------------------------------------------------------------------
Waiver of shareholder services fee--BayFunds Shares (63,135)
- -------------------------------------------------------------------------- -----------
Total waivers (345,541)
- --------------------------------------------------------------------------------------- -----------
Net expenses 450,493
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 2,475,831
- ---------------------------------------------------------------------------------------------------- ------------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------------
Net investment income $ 2,475,831 $ 4,506,984
- --------------------------------------------------------------------------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------------
Distributions from net investment income
- ---------------------------------------------------------------------------------
Institutional Service Shares (1,698,960) (3,066,535)
- ---------------------------------------------------------------------------------
BayFunds Shares (776,871) (1,440,449)
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets resulting from distributions to shareholders (2,475,831) (4,506,984)
- --------------------------------------------------------------------------------- -------------- --------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------------------------
Proceeds from sale of shares 256,872,275 371,068,422
- ---------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of distributions
declared 1,069,477 2,255,146
- ---------------------------------------------------------------------------------
Cost of shares redeemed (243,518,742) (359,040,754)
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets resulting from share transactions 14,423,010 14,282,814
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets 14,423,010 14,282,814
- ---------------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------------
Beginning of period 146,207,706 131,924,892
- --------------------------------------------------------------------------------- -------------- --------------
End of period $ 160,630,716 $ 146,207,706
- --------------------------------------------------------------------------------- -------------- --------------
</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
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 30,
1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------
Net investment income 0.02 0.03 0.02 0.02 0.03 0.05 0.03
- ------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------
Distributions from net
investment income (0.02) (0.03) (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 $ 1.00
- ------------------------------------ ------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.56% 3.34% 2.14% 1.99% 2.87% 4.63% 2.59%
- ------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------
Expenses 0.55%* 0.55% 0.55% 0.53% 0.34% 0.30% 0.17%*
- ------------------------------------
Net investment income 3.11%* 3.30% 2.12% 1.97% 2.82% 4.48% 5.66%*
- ------------------------------------
Expense waiver/ reimbursement (c) 0.43%* 0.45% 0.35% 0.43% 0.55% 0.69% 0.57%*
- ------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------
Net assets, end of period (000
omitted) $109,957 $99,628 $90,013 $84,524 $85,570 $81,681 $63,483
- ------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--BAYFUNDS SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995 1994 1993(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------
Net investment income 0.02 0.03 0.02 0.01
- -----------------------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------------------
Distributions from net investment income (0.02) (0.03) (0.02) (0.01)
- ----------------------------------------------------------- ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------- ------- --------- --------- -----------
TOTAL RETURN (B) 1.54% 3.30% 2.05% 1.25%
- -----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------
Expenses 0.59%* 0.60% 0.64% 0.65%*
- -----------------------------------------------------------
Net investment income 3.08%* 3.25% 2.09% 1.85%*
- -----------------------------------------------------------
Expense waiver/reimbursement (c) 0.43%* 0.45% 0.35% 0.43%*
- -----------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------
Net assets, end of period (000 omitted) $50,674 $46,580 $41,912 $18,143
- -----------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MASSACHUSETTS MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Massachusetts Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. 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
BayFundst Shares. The investment objective of the Fund is to provide current
income which is exempt from regular federal and Massachusetts state income tax
consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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, 1996,
47.4% 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 from
any one institution or agency did not exceed 9.4% 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 some cases, the restricted securities may be resold without registration
upon exercise of a demand feature. Such restricted securities may be
determined to be liquid under criteria established by the Board of
Trustees. The Fund will not incur any registration costs upon such resales.
Restricted securities are valued at amortized cost in accordance with Rule
2a-7 under the Act.
Additional information on each restricted security held at April 30, 1996
is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Clipper, MA Tax Exempt Trust Weekly VRDN's (State Street
Bank and Trust Co. LIQ) 5/15/95 $ 5,000,000
Clipper, MA Tax Exempt Trust, (Series 1993-1) Weekly
VRDN's (State Street Bank and Trust Co. LIQ) 6/30/95 3,465,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $160,630,716.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1996 1995
- ---------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 232,825,380 337,436,671
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 418,005 814,368
- ----------------------------------------------------------------------------------
Shares redeemed (222,913,939) (328,636,637)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service share transactions 10,329,446 9,614,402
- ---------------------------------------------------------------------------------- -------------- --------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
BAYFUNDS SHARES 1996 1995
- ---------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 24,046,932 33,631,751
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 651,472 1,440,778
- ----------------------------------------------------------------------------------
Shares redeemed (20,604,803) (30,404,117)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from Retired share transactions 4,093,601 4,668,412
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions 14,423,047 14,282,814
- ---------------------------------------------------------------------------------- -------------- --------------
</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 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of average daily net assets of the
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 0.25% of the average daily net assets of the BayFunds Shares
for the period. These fees are used to finance certain services for shareholders
and to maintain shareholder accounts. FSS and BayBank Systems, Inc. may
voluntarily choose to waive any portion of their fees. FSS and BayBank Systems,
Inc. can modify or terminate this voluntary waiver at any time at their sole
discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--FServ, through its
subsidiary, Federated Shareholder Services Company, serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended Apri 30, 1996, 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 $97,700,000 and $99,600,000,
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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President, Treasurer and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts Douglas L. Hein
Assistant Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
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.
MASSACHUSETTS
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1996
INSTITUTIONAL SERVICE SHARES
BAYFUNDSa SHARES
Federated Management
Investment Adviser
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
314229832
314229303
Z00326 1052806 (6/96)
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, which covers the
six-month period from November 1, 1995, through April 30, 1996. The report
begins with a discussion with the fund's portfolio manager, followed by a
complete listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares and
Institutional Service Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and California
income tax*--through a portfolio concentrated in high-quality, short-term
California municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.01 per
share for Institutional Shares $0.02 per share for Institutional Service Shares.
The fund's total net assets of $85.3 million were spread among California
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on California Municipal Cash Trust to seek the best tax-free
income opportunities for your cash investment needs. As always, we will continue
to provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Mary Jo Ochson, C.F.A. and
Co-Portfolio Manager Michael Sirianni.
Q Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April 1996. Faced with slowing
economic growth and benign inflationary pressures, the Fed lowered the
federal funds target rate from 5.75% to 5.50% in late December 1995, and again
from 5.50% to the current 5.25% at the end of January 1996. For the December
1995 move, the Fed cited a better-than-expected inflation outlook as the impetus
behind the easing, although a sluggish manufacturing sector and lackluster
consumer spending was thought to have had an influence. In January 1996, the Fed
appeared swayed by the dampening effects of high debt loads and employment
uncertainty on consumer consumption along with sluggish export growth. Through
this period, the short-end of the government and municipal yield curves
anticipated the policy moves from the Fed, and amid signs of a weakening economy
looked forward to additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts) as well as
supply and demand imbalances unique to the municipal money markets. Because
of these imbalances, however, on a weekly basis the fund's yield may
experience more volatility than Treasury yields and taxable money fund yields.
In general, yields on municipal money market funds were lower over the reporting
period. The seven-day net yield* of the fund's Institutional Shares on April 30
1996, was 3.67%. (Institutional Shares were introduced in March, 1996.)
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
- --------------------------------------------------------------------------------
For the Institutional Service Shares, the seven-day net yield* was 3.42% on
April 30, 1996, compared to 3.57% six months earlier.
Q What was your strategy for managing the fund over the semi-annual reporting
period?
A We extended the average maturity during July of 1995 by taking advantage of
some very attractive fixed rate notes. The extension enabled the fund to
maintain a neutral average maturity target of 55 to 60 days early in the
reporting period. During the first quarter of 1996, we repositioned the fund
within a shorter average maturity range of 35 to 45 days due to the change in
sentiment with respect to the direction of interest rates. Going forward, we
will continue to monitor the overall interest rate environment as well as the
economic outlook for the State. Additionally, if the June and July 1996 issuance
of cash flow notes are attractive, we will extend the fund to the 50 day range.
Q What is your outlook for rates in the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
CALIFORNIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------ -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.2%
- -------------------------------------------------------------------------
CALIFORNIA--95.1%
------------------------------------------------------
$2,920,000 California HFA Home Mortgage, (Series 1989F), 3.25%
TOBs (Citibank NA, New York LIQ), Optional Tender
8/1/1996 A-1+ $ 2,920,000
------------------------------------------------------
1,100,000 California Health Facilities Financing Authority
Weekly VRDNs (FGIC INS)/(Morgan Guaranty Trust Co.,
New York LIQ) VMIG1 1,100,000
------------------------------------------------------
4,000,000 California PCFA, (Series 1991) Weekly VRDNs (North
County, CA Recycling & Energy Recovery)/(Union Bank of
Switzerland, Zurich LOC) SP-1 4,000,000
------------------------------------------------------
3,655,000 California PCFA, (Series D), 3.50% CP (Pacific Gas &
Electric Co.)/(Bank of Tokyo-Mitsubishi LTD. LOC),
Mandatory Tender 7/25/1996 A-1 3,655,000
------------------------------------------------------
3,400,000 (a) California Public Capital Improvements Financing
Authority, Trust Receipts (Series 1996 FR-3) Weekly
VRDNs (MBIA INS)/(Bank of New York, New York LIQ) SP-1 3,400,000
------------------------------------------------------
3,900,000 California Statewide Communities Development
Authority, (Series A) Weekly VRDNs (Barton Memorial
Hospital)/ (Banque Nationale de Paris LOC) VMIG1 3,900,000
------------------------------------------------------
2,000,000 California Statewide Communities Development
Authority, Certificates of Participation, 4.00% Bonds
(Queen of Angels-Hollywood Presbyterian Medical
Center), 1/1/1997 NR(3) 2,000,000
------------------------------------------------------
6,000,000 Central Unified School District, CA, Certificates of
Participation (1995 Financing Project) Weekly VRDNs
(Union Bank of California LOC) VMIG1 6,000,000
------------------------------------------------------
1,000,000 Livermore Valley, CA USD, (Series 1995-96), 4.75%
TRANs, 9/19/1996 MIG1 1,002,589
------------------------------------------------------
5,000,000 Long Beach, CA Housing Authority, (1995 Series A)
Weekly VRDNs (Channel Point Apartments)/(Union Bank of
California LOC) VMIG1 5,000,000
------------------------------------------------------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------ -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$2,000,000 Los Angeles County, CA Metropolitan Transportation
Authority, 3.25% CP (ABN AMRO Bank N.V., Amsterdam,
Banque Nationale de Paris, Canadian Imperial Bank of
Commerce, Toronto, National Westminster Bank, PLC,
London and Union Bank of California LOCs), Mandatory
Tender 5/20/1996 A-1 $ 2,000,000
------------------------------------------------------
3,500,000 Los Angeles County, CA Metropolitan Transportation
Authority, General Revenue Bonds, (Series 1995-A)
Weekly VRDNs (Union Station Gateway Project)/(FSA
INS)/(Societe Generale, Paris LIQ) A-1+ 3,500,000
------------------------------------------------------
2,000,000 Los Angeles, CA Wastewater System, 3.25% CP, Mandatory
Tender 5/17/1996 A-1 2,000,000
------------------------------------------------------
3,000,000 (a) Los Angeles, CA Wastewater System, Tender Option
Certificates, (Series 1995D) Weekly VRDNs (MBIA INS)/
(Canadian Imperial Bank of Commerce, Toronto LIQ) A-1+ 3,000,000
------------------------------------------------------
2,000,000 Monterey Peninsula, CA Water Management District
Weekly VRDNs (Wastewater Reclaimation)/(Sumitomo Bank
Ltd., Osaka LOC) VMIG1 2,000,000
------------------------------------------------------
600,000 Orange County, CA IDA, (Series 1985B -- Niguel Summit
II) Weekly VRDNs (Hon Development Corp.)/ (Bank of
America NT and SA, San Francisco LOC) VMIG1 600,000
------------------------------------------------------
3,000,000 Orange County, CA IDA, (Series 1991A) Weekly VRDNs
(The Lakes)/(Citibank NA, New York LOC) A-1+ 3,000,000
------------------------------------------------------
4,000,000 Orange County, CA Local Transportation Authority,
Sales Tax Revenue Notes, 3.45% CP (Industrial Bank of
Japan Ltd., Tokyo LOC), Mandatory Tender 5/22/1996 A-1 4,000,000
------------------------------------------------------
4,250,000 Pomona, CA, 4.70% TRANs, 6/28/1996 SP-1+ 4,252,582
------------------------------------------------------
1,200,000 Riverside County, CA, (Series A) Weekly VRDNs
(Riverside, CA Public Facility Finance)/ (Commerzbank
AG, Frankfurt and National Westminster Bank, PLC,
London LOCs) MIG1 1,200,000
------------------------------------------------------
950,000 Roseville, CA, Hospital Facilities Authority, (Series
1989A) Weekly VRDNs (Toronto-Dominion Bank LOC) VMIG1 950,000
------------------------------------------------------
1,700,000 San Bernardino County, CA, (Series 1985) Weekly VRDNs
(Woodview Apartments)/(Swiss Bank Corp., Basle LOC) VMIG1 1,700,000
------------------------------------------------------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------ -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$3,400,000 San Dimas, CA Redevelopment Agency, (Series 1995)
Weekly VRDNs (Diversified Shopping Center Project)/
(Morgan Guaranty Trust Co., New York LOC) A-1+ $ 3,400,000
------------------------------------------------------
1,500,000 San Francisco, CA Redevelopment Finance Agency,
(Series B1) Weekly VRDNs (Fillmore Center)/(Bank of
Nova Scotia, Toronto LOC) A-1+ 1,500,000
------------------------------------------------------
1,400,000 Santa Clara County-El Comino Hospital District, CA,
(Series 1985G) Weekly VRDNs (Valley Medical Center)/
(National Westminster Bank, PLC, London LOC) A-1+ 1,400,000
------------------------------------------------------
400,000 Santa Clara, CA, (Series 1985C) Weekly VRDNs (Santa
Clara, CA Electric System)/(National Westminster Bank,
PLC, London LOC) A-1+ 400,000
------------------------------------------------------
4,000,000 Santa Cruz County, CA, 4.50% TRANs, 7/11/1996 SP-1+ 4,003,727
------------------------------------------------------
1,500,000 Selma, CA, 4.75% TRANs, 6/30/1996 SP-1+ 1,501,018
------------------------------------------------------
2,000,000 Southern California Public Power Authority,
Transmission Project Revenue Bonds, 7.875% Bonds
(United States Treasury PRF), 7/1/1996 (@103) NR(1) 2,075,038
------------------------------------------------------
610,000 Stockton, CA, (Series 1993) Weekly VRDNs (La Quinta
Inns, Inc.) /(Nationsbank of Texas, N.A. LOC) P-1 610,000
------------------------------------------------------
2,500,000 Temecula Valley Unified School District, CA, 4.50%
TRANs, 7/5/1996 SP-1+ 2,502,132
------------------------------------------------------
995,000 Vallejo, CA, Commercial Development Refunding Revenue
Bonds (1994 Series A) Weekly VRDNs (Vallejo Center
Associates Project)/(Bank of Tokyo-Mitsubishi LTD.
LOC) A-1 995,000
------------------------------------------------------
1,500,000 Victor Valley Community College District, CA, 4.00%
TRANs (Union Bank of California LOC), 1/17/1997 SP-1 1,504,130
------------------------------------------------------ -----------
Total 81,071,216
------------------------------------------------------ -----------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------ -------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
PUERTO RICO--4.1%
------------------------------------------------------
$3,500,000 Puerto Rico Government Development Bank, 3.15% CP,
Mandatory Tender 5/13/1996 A-1+ $ 3,500,000
------------------------------------------------------ -----------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $84,571,216
------------------------------------------------------ -----------
</TABLE>
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to $6,400,000 which represents 7.5% of net assets.
(b) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($85,288,653) at April 30, 1996.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
CP -- Commercial Paper
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
INS -- Insured
LIQ -- Liquidity Agreement
LOCs -- Letter(s) of Credit
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCFA -- Pollution Control Finance Authority
PLC -- Public Limited Company
PRF -- Prerefunded
SA -- Support Agreement
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
USD -- University School District
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $84,571,216
- --------------------------------------------------------------------------------
Cash 146,415
- --------------------------------------------------------------------------------
Income receivable 877,114
- -------------------------------------------------------------------------------- -----------
Total assets 85,594,745
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $247,278
- ---------------------------------------------------------------------
Accrued expenses 58,814
- --------------------------------------------------------------------- --------
Total liabilities 306,092
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 85,288,653 shares outstanding $85,288,653
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- --------------------------------------------------------------------------------
$77,830,376 / 77,830,376 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
INSTITUTIONAL SHARES:
- --------------------------------------------------------------------------------
$7,458,277 / 7,458,277 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $1,659,750
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 218,161
- ----------------------------------------------------------------------
Administrative personnel and services fee 53,351
- ----------------------------------------------------------------------
Custodian fees 11,702
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,331
- ----------------------------------------------------------------------
Directors'/Trustees' fees 1,965
- ----------------------------------------------------------------------
Auditing fees 6,547
- ----------------------------------------------------------------------
Legal fees 4,629
- ----------------------------------------------------------------------
Portfolio accounting fees 24,921
- ----------------------------------------------------------------------
Shareholder services fee-Institutional Service Shares 106,551
- ----------------------------------------------------------------------
Shareholder services fee-Institutional Shares 2,529
- ----------------------------------------------------------------------
Share registration costs 29,142
- ----------------------------------------------------------------------
Printing and postage 11,219
- ----------------------------------------------------------------------
Insurance premiums 3,913
- ----------------------------------------------------------------------
Miscellaneous 1,481
- ---------------------------------------------------------------------- ---------
Total expenses 489,442
- ----------------------------------------------------------------------
Waivers and reimbursements--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $(218,161)
- ----------------------------------------------------------
Waiver of shareholder services fee-Institutional Service
Shares (19,427)
- ----------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares (2,529)
- ----------------------------------------------------------
Reimbursement of other operating expenses (14,734)
- ---------------------------------------------------------- ---------
Total waivers and reimbursements (254,851)
- ---------------------------------------------------------------------- ---------
Net expenses 234,591
- ----------------------------------------------------------------------------------- ----------
Net investment income $1,425,159
- ----------------------------------------------------------------------------------- ----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------
OPERATIONS--
- -----------------------------------------------------
Net investment income $ 1,425,159 $ 3,099,882
- ----------------------------------------------------- ------------- -------------
Net realized gain (loss) on investments -- (750,875)
- ----------------------------------------------------- ------------- -------------
Change in net assets resulting from operations 1,425,159 2,349,007
- ----------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------
Distributions from net investment income
- -----------------------------------------------------
Institutional Service Shares (1,389,611) (3,099,882)
- -----------------------------------------------------
Institutional Shares (35,548) --
- ----------------------------------------------------- ------------- -------------
Change in net assets resulting from
distributions to shareholders (1,425,159) (3,099,882)
- ----------------------------------------------------- ------------- -------------
SHARE TRANSACTIONS--
- -----------------------------------------------------
Proceeds from sale of shares 196,596,882 361,842,642
- -----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 194,097 471,326
- -----------------------------------------------------
Cost of shares redeemed (208,036,184) (347,342,783)
- ----------------------------------------------------- ------------- -------------
Change in net assets resulting from share
transactions (11,245,205) 14,971,185
- ----------------------------------------------------- ------------- -------------
Change in net assets (11,245,205) 14,971,185
- -----------------------------------------------------
NET ASSETS:
- -----------------------------------------------------
Beginning of period 96,533,858 81,562,673
- ----------------------------------------------------- ------------- -------------
End of period $ 85,288,653 $ 96,533,858
- ----------------------------------------------------- ------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,(A) YEAR ENDED SEPTEMBER 30,
------------ ------------------ ----------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(B)
------------ ------- ------- -------- ------- ------- ------- -------
<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 0.03 0.02 0.02 0.03 0.04 0.05 0.03
- ----------------------------------
Net realized loss on investments -- (0.01) -- -- -- -- -- --
- ---------------------------------- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations 0.02 0.02 0.02 0.02 0.03 0.04 0.05 0.03
- ----------------------------------
CAPITAL CONTRIBUTION -- 0.01 -- -- -- -- -- --
- ---------------------------------- ----- ----- ----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
- ----------------------------------
Distributions from net investment
income (0.02) (0.03) (0.02) (0.02) (0.03) (0.04) (0.05) (0.03)
- ---------------------------------- ----- ----- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL RETURN(C) 1.64% 3.37% 2.07% 2.03% 2.83% 4.30% 5.38% 2.95%
- ----------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------
Expenses 0.55%* 0.59% 0.58% 0.54% 0.45% 0.35% 0.38% 0.40%*
- ----------------------------------
Net investment income 3.26%* 3.33% 2.03% 2.00% 2.76% 4.19% 5.27% 5.86%*
- ----------------------------------
Expense waiver/reimbursement(d) 0.58%* 0.50% 0.40% 0.35% 0.58% 0.75% 0.86% 0.89%*
- ----------------------------------
SUPPLEMENTAL DATA
- ----------------------------------
Net assets, end of period (000
omitted) $ 77,830 $96,534 $74,707 $104,322 $59,709 $56,754 $50,391 $36,628
- ----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) The Fund changed its fiscal year-end from September 30, to October 31,
beginning September 30, 1994.
(b) Reflects operations for the period from March 15, 1989 (date of initial
public investment) to September 30, 1989.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(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)
CALIFORNIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD
ENDED
(UNAUDITED)
APRIL 30,
1996(A)
-----------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- ------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------
Net investment income 0.01
- ------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------------------
Distributions from net investment income (0.01)
- ------------------------------------------------------------------------------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ------------------------------------------------------------------------------ ------
TOTAL RETURN(B) 0.55%
- ------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------------------
Expenses 0.21%*
- ------------------------------------------------------------------------------
Net investment income 3.76%*
- ------------------------------------------------------------------------------
Expense waiver/reimbursement(c) 0.78%*
- ------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 7,458
- ------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 4, 1996 (date of initial
public investment) to April 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of California Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. 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
Institutional Shares.
The investment objective of the Fund is current income exempt from federal
regular income tax and the personal income taxes imposed by the State of
California consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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, 1996,
69.5% 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 from any one institution or
agency did not exceed 17.2% of total investments.
CALIFORNIA 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 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, 1996
is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
----------------------------------------------------------- ------------ -----------
<S> <C> <C>
California Public Capital Improvements Financing Authority,
Fund Receipts (Series 1996 FR-3) Weekly VRDNs 3/7-4/1/1996 $3,400,000
Los Angeles, CA Wastewater System, Tender Option
Certificates, (Series 1995-A) Weekly VRDNs 3/4/1996 $3,000,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $85,288,653.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SHARES APRIL 30, 1996 OCTOBER 31, 1995
- -------------------------------------------------------- --------------- ----------------
<S> <C> <C>
Shares sold 186,522,416 361,842,642
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 194,097 471,326
- --------------------------------------------------------
Shares redeemed (205,419,995) (347,342,783)
- -------------------------------------------------------- ------------ ------------
Net change resulting from Institutional Service share
transactions (18,703,482) 14,971,185
- -------------------------------------------------------- ------------ ------------
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
INSTITUTIONAL SHARES APRIL 30, 1996*
- --------------------------------------------------------------------------- ----------------
<S> <C>
Shares sold 10,074,466
- ---------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared --
- ---------------------------------------------------------------------------
Shares redeemed (2,616,189)
- --------------------------------------------------------------------------- ------------
Net change resulting from Institutional share transactions 7,458,277
- --------------------------------------------------------------------------- ------------
Net change resulting from share transactions (11,245,205)
- --------------------------------------------------------------------------- ------------
</TABLE>
* For the period from March 4, 1996 (date of initial public investment) to April
30, 1996.
(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 0.50% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of daily average net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
For the period ended April 30, 1996, the Institutional Shares did not incur a
shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
CAPITAL CONTRIBUTION--Federated Management made a capital contribution in the
amount of $750,875 to California Municipal Cash Trust during the year ended
October 31, 1995. The contribution represents the excess over fair market value
($720,000) paid by Federated Management to acquire $4,000,000 par, Orange
County, CA, Series B Bonds from the Fund on July 10, 1995. The contribution
CALIFORNIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
also consists of the cost of an LOC ($30,875) obtained by Federated Management
on December 7, 1994 to support the value of the Orange County Bonds. The LOC
guaranteed the principal amount of the securities in the event the issuer did
not timely pay the principal at maturity.
These transactions resulted in a permanent book and tax difference. As such, the
paid-in-capital and accumulated net realized gain/loss accounts have been
adjusted accordingly. This adjustment did not affect net investment income, net
realized gains/losses, or net assets.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $95,295,000 and
$102,800,000, 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
- -----------------------------------------------------------------------------
CALIFORNIA
- -----------------------------------------------------------------------------
MUNICIPAL
- -----------------------------------------------------------------------------
CASH
- -----------------------------------------------------------------------------
TRUST
- -----------------------------------------------------------------------------
SEMI-ANNUAL REPORT TO SHAREHOLDERS
- -----------------------------------------------------------------------------
APRIL 30, 1996
[LOGO OF FEDERATED INVESTORS]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and a subsidiary of Federated Investors.
Cusip 314229675
Cusip 314229766
0041609 (6/96) [RECYCLED LOGO]
- --------------------------------------------------------------------------------
FLORIDA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
April 30, 1996
FEDERATED INVESTORS
(LOGO)Z
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 314229758
CUSIP 314229683
G00827-02 (6/96)
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, which covers the
six-month period from November 1, 1995, through April 30, 1996. The report
begins with a discussion with the fund's portfolio manager, followed by a
complete listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares and Cash II
Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and the Florida
intangibles tax*--through a portfolio concentrated in high-quality, short-term
Florida municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.02 per
share for Institutional Shares and $0.01 per share for Cash II Shares. Its total
net assets of $320.3 million were diversified among Florida securities that use
municipal bond financing for projects as varied as health care, housing,
community development, and transportation.
You can count on Florida Municipal Cash Trust to seek the best tax-free income
opportunities for your cash investment needs. As always, we will strive to
continue to provide you with the highest level of professional service. We
invite your questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An investment
in the fund is neither insured nor guaranteed by the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q
Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A
The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ended in April 1996. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50% to
the current 5.25% at the end of January 1996. For the December 1995 move, the
Fed cited a better-than-expected inflation outlook as the impetus behind the
easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed appeared
swayed by the dampening effects of high debt loads and employment uncertainty on
consumer consumption along with sluggish export growth. Through this period, the
short-end of the government and municipal yield curves anticipated the policy
moves from the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest in 12 years--which
caused the yields on short-term securities to rise by as much as 25 basis
points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rater volatile mood in
the markets. The yield on the three-month Treasury bill began November 1995 at
5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q
How has the fund's yield responded to this interest rate environment?
A
The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the reporting period. For the fund, the seven-day
net yield* of the Institutional Shares on April 30, 1996 was 3.33% compared to
3.44% six months ago. For the Cash II Shares, the seven-day net yield* was 3.17%
on April 30, 1996 compared to 3.20% on December 3, 1995, near the inception date
of the share class.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
- --------------------------------------------------------------------------------
Q
What was your strategy for managing the fund over the semi-annual reporting
period?
A
The fund started the reporting period with an average maturity of 68 days,
which was slightly longer than our neutral target of 55 to 65 days. As
November and December of 1995 progressed, the average maturity rolled
inward considerably as the fund received large cash inflows due to the state
intangibles tax levy imposed on non-Florida securities. These inflows were
invested in liquid short-term variable rate demand notes, which brought the
average maturity to a period low of 17 days by early January 1996. In January
and February of 1996, a portion of these assets left the fund and the maturity
of the fund returned to our 55-65 day target level. By the end of the reporting
period, the average maturity was 76 days, which was slightly longer than our
target range of 55-65 days due to redemptions related to federal income tax
payments in April 1996. We expect to shorten this maturity to 65 days by early
June 1996.
Q
What is your outlook for the near future?
A
With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when Gross
Domestic Product grew at only .5%. As a result, the Fed should not feel the
urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be on the longer side of our target range throughout the
summer months.
FLORIDA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.3%
- ------------------------------------------------------------------------
FLORIDA--77.4%
-----------------------------------------------------
$ 3,000,000 Broward County, FL HFA, Multi-family Housing Revenue
Refunding Bonds (1995 Series B) Weekly VRDNs (Harbour
Town of Jacaranda Project)/(SouthTrust Bank of
Alabama, Birmingham LOC) P-1 $ 3,000,000
-----------------------------------------------------
1,130,000 Broward County, FL, IDRB (Series 1993) Weekly VRDNs
(American Whirlpool Products Corp. Project)/
(Nationsbank of Florida, N.A. LOC) P-1 1,130,000
-----------------------------------------------------
8,000,000 Charlotte County, FL School District, (Series 1995),
3.90% TANs, 6/30/1996 MIG1 8,001,901
-----------------------------------------------------
3,000,000 Clay County, FL Development Authority, IDRB (Series
1994) Weekly VRDNs (Carlisle Corporation
Project)/(SunTrust Bank, Atlanta LOC) P-1 3,000,000
-----------------------------------------------------
1,950,000 Dade County, FL IDA, IDRB (Series 1995) Weekly VRDNs
(June Leasing Co. Project (FL))/(First Union National
Bank of Florida LOC) A-1 1,950,000
-----------------------------------------------------
20,000,000 Dade County, FL Solid Waste System, IDRB (Series 1990
A) Weekly VRDNs (Montenay-Dade Ltd. Project)/(Banque
Paribas, Paris LOC) VMIG1 20,000,000
-----------------------------------------------------
22,000,000 Dade County, FL, Aviation Revenue Bonds Tender Option
Certificates (Series 1995G) Weekly VRDNs (MBIA
INS)/(Bayerische Hypotheken-Und Wechsel-Bank Ag LIQ) A-1+ 22,000,000
-----------------------------------------------------
4,000,000 Dade County, FL, Development Revenue Bonds, (Series
1988) Weekly VRDNs (Montenay-Dade Ltd.
Project)/(Banque Paribas, Paris LOC) VMIG1 4,000,000
-----------------------------------------------------
3,000,000 Duval County, FL HFA, Multi-family Housing Revenue
Bonds (Series 1985 F) Weekly VRDNs (Lakes of Mayport
Apartments Project)/(SunTrust Bank, Atlanta LOC) AA- 3,000,000
-----------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------
$ 3,900,000 Escambia County, FL HFA, SFM Revenue Bonds (Series
1996B), 3.65% TOBs (Trinity Financing Corp. GIC),
Mandatory Tender 4/1/1997 Aaa $ 3,900,000
-----------------------------------------------------
4,700,000 Florida HFA, Housing Revenue Bonds (Series J) Weekly
VRDNs (Ashley Lake Project)/(Barclays Bank PLC,
London LOC) VMIG1 4,700,000
-----------------------------------------------------
6,570,000 Florida HFA, Multi-family Housing Revenue Bonds (1995
Series M) Weekly VRDNs (Bainbridge Club Apartments
Project)/(PNC Bank, Kentucky LOC) VMIG1 6,570,000
-----------------------------------------------------
5,380,000 Florida State Board of Education Administration,
(CR55D), 3.60% TOBs (Citibank N.A., New York LIQ),
Optional Tender 6/1/1996 NR(2) 5,380,000
-----------------------------------------------------
3,000,000 Florida State Board of Education Administration,
Puttable Tax-Exempt Receipts (Series 10) Weekly VRDNs
(Florida State)/(Morgan Guaranty Trust Co., New York
LIQ) VMIG1 3,000,000
-----------------------------------------------------
9,000,000 Greater Orlando (FL) Aviation Authority, Airport
Facilities Subordinated CP Notes (Series B), 3.75%
CP, Mandatory Tender 7/15/1996 P-1 9,000,000
-----------------------------------------------------
7,000,000 Hillsborough County, FL Aviation Authority, Bond
Anticipation CP Notes, 3.35% CP (Tampa International
Airport)/(National Westminster Bank, PLC, London
LOC), Mandatory Tender 5/10/1996 A-1+ 7,000,000
-----------------------------------------------------
3,000,000 Hillsborough County, FL Aviation Authority, Bond
Anticipation CP Notes, 3.35% CP (Tampa International
Airport)/(National Westminster Bank, PLC, London
LOC), Mandatory Tender 5/13/1996 A-1+ 3,000,000
-----------------------------------------------------
5,500,000 Hillsborough County, FL Aviation Authority, Bond
Anticipation CP Notes, 3.65% CP (Tampa International
Airport)/(National Westminster Bank, PLC, London
LOC), Mandatory Tender 6/12/1996 A-1+ 5,500,000
-----------------------------------------------------
2,000,000 Hillsborough County, FL IDA Weekly VRDNs (Ringhager
Equipment Co.)/(Mellon Bank N.A., Pittsburgh LOC) P-1 2,000,000
-----------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------
$ 2,700,000 Hillsborough County, FL IDA, (Series 1992) Weekly
VRDNs (SIFCO Turbine Component Service)/(National
City Bank, Cleveland, OH LOC) P-1 $ 2,700,000
-----------------------------------------------------
17,975,000 Hillsborough County, FL IDA, PCR Refunding Bonds Long
Option Period (CR-31I), 3.60% TOBs (Tampa Electric
Company)/(MBIA INS), Optional Tender 4/1/1997 NR(1) 17,975,000
-----------------------------------------------------
1,013,200 Immokalee Water and Sewer District, Water and Sewer
Revenue, 3.65% BANs, 8/30/1996 NR 1,013,200
-----------------------------------------------------
2,250,000 Indian River County School District, FL, (Series
1995), 4.00% TANs, 6/30/1996 MIG1 2,250,689
-----------------------------------------------------
6,425,000 Jacksonville, FL HFDC Daily VRDNs (River Garden
Project)/(Banque Paribas, Paris LOC) A-2 6,425,000
-----------------------------------------------------
3,000,000 Jacksonville, FL HFDC, Health Facilities Revenue
Bonds (Series 1994) Weekly VRDNs (River Garden/The
Coves Project)/(First Union National Bank, Charlotte,
NC LOC) A-1 3,000,000
-----------------------------------------------------
2,000,000 Jacksonville, FL HFDC, Health Facilities Revenue
Bonds (Series 1996) Weekly VRDNs (Jacksonville
Faculty Practice Association Project)/(Nationsbank of
Georgia, N.A. LOC) A-1 2,000,000
-----------------------------------------------------
1,200,000 Jacksonville, FL Weekly VRDNs (Metal Sales)/(National
City Bank, Kentucky LOC) P-1 1,200,000
-----------------------------------------------------
1,000,000 Lee County, FL IDA, IDRB (Series 1994) Weekly VRDNs
(Baader North America Corporation)/(Deutsche Bank, AG
LOC) VMIG1 1,000,000
-----------------------------------------------------
3,500,000 Manatee County, FL HFA, SFM Revenue Bonds (Series
1996), 3.75% TOBs (Bayerische Landesbank Girozentrale
GIC), Optional Tender 10/15/1996 VMIG1 3,500,000
-----------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------
$ 1,000,000 Marion County, FL HFA, Multi-family Revenue Bonds
(1985 Series F) Weekly VRDNs (Paddock Place
Project)/(SunTrust Bank, Atlanta LOC) A-1 $ 1,000,000
-----------------------------------------------------
2,400,000 Martin County, FL IDA, Tender Industrial Revenue
Bonds (Series 1986) Weekly VRDNs (Tampa Farm Service,
Inc. Project)/(SunTrust Banks, Inc. LOC) Aa3 2,400,000
-----------------------------------------------------
4,500,000 Martin County, FL School District, District Operating
Millage (Series 1995), 4.25% TANs, 6/8/1996 NR 4,501,799
-----------------------------------------------------
4,000,000 Miami, FL, (Series 1995), 4.50% TANs, 9/27/1996 SP-1+ 4,010,974
-----------------------------------------------------
5,000,000 Orange County, FL HFA, (Series 1996B), 3.65% TOBs
(Westdeutsche Landesbank Girozentrale GIC), Mandatory
Tender 4/1/1997 A-1+ 5,000,000
-----------------------------------------------------
2,230,000 Orange County, FL HFA, Multi-family Housing Revenue
Bonds Weekly VRDNs (Sutton Place, Ltd.
Project)/(Nationsbank of Maryland, N.A. LOC) A-1+ 2,230,000
-----------------------------------------------------
8,000,000 Orange County, FL School District, (Series 1995),
4.50% TANs, 10/16/1996 SP-1+ 8,024,750
-----------------------------------------------------
2,000,000 Orlando & Orange County Expressway Authority, FL,
Expressway Revenue Bonds, 7.25% Bonds (United States
Treasury PRF), 7/1/1996 (@102) AAA 2,052,423
-----------------------------------------------------
200,000 Palm Beach County, FL IDA Weekly VRDNs (Palm Beach
Jewish Community Campus)/(SunTrust Bank, Central
Florida LOC) A-1+ 200,000
-----------------------------------------------------
5,500,000 Pasco County, FL School District, (Series 1995),
3.90% TANs, 6/30/1996 MIG1 5,500,877
-----------------------------------------------------
3,500,000 Pinellas County Industry Council, FL, IDRB (Series
1994) Weekly VRDNs (Genca Corporation Project)/(PNC
Bank, Ohio, N.A. LOC) P-1 3,500,000
-----------------------------------------------------
2,903,000 Pinellas County Industry Council, FL, IDRB (Series
1995) Weekly VRDNs (ATR International, Inc.,
Project)/(First Union National Bank of Florida LOC) P-1 2,903,000
-----------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------
FLORIDA--CONTINUED
-----------------------------------------------------
$ 6,000,000 Pinellas County, FL HFA, SFM Revenue Bonds
(Series B), 3.40% TOBs (Trinity Financing Corp. GIC),
Mandatory Tender 3/1/1997 VMIG1 $ 6,000,000
-----------------------------------------------------
3,200,000 Pinellas County, FL HFA, SFM Revenue Bonds (Series
PA-92) Weekly VRDNs (GNMA COL)/(Merrill Lynch Capital
Services, Inc. LIQ) A-1+ 3,200,000
-----------------------------------------------------
3,040,000 Sarasota County, FL IDRB, (Series 1994) Monthly VRDNs
(Resource Recovery Systems of Sarasota
Project)/(Fleet National Bank, Providence, R.I. LOC) A-1 3,040,000
-----------------------------------------------------
12,800,000 Sarasota County, FL Public Hospital District, 3.20%
CP (Sarasota Memorial Hospital), Mandatory Tender
6/10/1996 A-1 12,800,000
-----------------------------------------------------
9,100,000 Sarasota County, FL Public Hospital District, 3.40%
CP (Sarasota Memorial Hospital), Mandatory Tender
5/16/1996 A-1 9,100,000
-----------------------------------------------------
1,400,000 Sumter County, FL IDA Weekly VRDNs (Great Southern
Wood of Florida)/(SouthTrust Bank of Alabama,
Birmingham LOC) VMIG1 1,400,000
-----------------------------------------------------
10,000,000 Sunshine State Governmental Finance Commission, FL,
3.35% CP (Morgan Guaranty Trust Co., New York,
National Westminster Bank, PLC, London and Union Bank
of Switzerland, Zurich LOCs), Mandatory Tender
5/23/1996 VMIG1 10,000,000
-----------------------------------------------------
2,300,000 Tamarac, FL, IDRB (Series 1995) Weekly VRDNs (Arch
Aluminum & Glass Co., Inc. Project)/(Mellon Bank
N.A., Pittsburgh LOC) P-1 2,300,000
-----------------------------------------------------
1,625,000 Volusia County, FL IDA Weekly VRDNs (Crane
Cams)/(First Interstate Bank of Arizona, N.A. LOC) P-1 1,625,000
----------------------------------------------------- ------------
Total 247,984,613
----------------------------------------------------- ------------
GEORGIA--0.6%
-----------------------------------------------------
2,000,000 Douglas County, GA School District, 3.75% TANs,
12/31/1996 NR 2,006,497
----------------------------------------------------- ------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------
ILLINOIS--1.6%
-----------------------------------------------------
$ 5,000,000 Chicago, IL, Collateralized SFM Revenue Bonds (Series
1996-B), 3.30% TOBs (MBIA INS), Optional Tender
10/15/1996 VMIG1 $ 5,000,000
----------------------------------------------------- ------------
MAINE--0.7%
-----------------------------------------------------
2,485,000 Jay, ME, Solid Waste Disposal Revenue Bonds, 4.50%
TOBs (International Paper Co.), Optional Tender
6/1/1996 A-2 2,486,406
----------------------------------------------------- ------------
MINNESOTA--1.6%
-----------------------------------------------------
5,000,000 Faribault, MN IDA, (Series 1988) Weekly VRDNs (Jerome
Foods)/(Norwest Bank Minnesota, Minneapolis LOC) P-1 5,000,000
----------------------------------------------------- ------------
NEW HAMPSHIRE--4.4%
-----------------------------------------------------
3,000,000 Belknap County, NH, 3.53% TANs, 12/27/1996 NR 3,000,775
-----------------------------------------------------
6,000,000 Merrimack, NH, 3.62% TANs, 12/31/1996 NR 6,000,755
-----------------------------------------------------
5,000,000 Strafford County, NH, 3.42% TANs, 12/27/1996 NR 5,002,229
----------------------------------------------------- ------------
Total 14,003,759
----------------------------------------------------- ------------
NEW JERSEY--0.9%
-----------------------------------------------------
3,000,000 New Brunswick, NJ, 4.00% BANs, 12/23/1996 NR 3,008,267
----------------------------------------------------- ------------
SOUTH CAROLINA--1.6%
-----------------------------------------------------
5,000,000 Georgetown County, SC, Pollution Control Facilities
Adjustable Rate Bonds (Series A), 4.30% TOBs
(International Paper Co.), Optional Tender 9/1/1996 A-2 5,006,250
----------------------------------------------------- ------------
TENNESSEE--1.6%
-----------------------------------------------------
5,000,000 Oak Ridge, TN IDB, Solid Waste Facility Bonds (Series
1996) Weekly VRDNs (M4 Environmental L.P.
Project)/(SunTrust Bank, Atlanta LOC) Aa3 5,000,000
----------------------------------------------------- ------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ----------------------------------------------------- --------- ------------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------
TEXAS--3.4%
-----------------------------------------------------
$10,750,000 Angelina and Neches River Authority, Texas, Solid
Waste Disposal Revenue Bonds (Series 1993), 3.60% CP
(Temple-Eastex, Inc. Project)/(Temple-Inland, Inc.
GTD), Mandatory Tender 5/22/1996 A-1 $ 10,750,000
----------------------------------------------------- ------------
VIRGINIA--5.5%
-----------------------------------------------------
3,000,000 Halifax, VA IDA, MMMs, PCR, 3.40% CP (Virginia
Electric Power Co.), Mandatory Tender 5/14/1996 A-1 3,000,000
-----------------------------------------------------
6,100,000 Richmond, VA Redevelopment & Housing Authority,
(Series B-1) Weekly VRDNs (Richmond, VA Red Tobacco
Row)/(Westdeutsche Landesbank Girozentrale LOC) VMIG1 6,100,000
-----------------------------------------------------
3,555,000 Richmond, VA Redevelopment & Housing Authority,
(Series B-6) Weekly VRDNs (Richmond, VA Red Tobacco
Row)/(Westdeutsche Landesbank Girozentrale LOC) VMIG1 3,555,000
-----------------------------------------------------
5,200,000 Richmond, VA Redevelopment & Housing Authority,
(Series B-9) Weekly VRDNs (Richmond, VA Red Tobacco
Row)/(Westdeutsche Landesbank Girozentrale LOC) VMIG1 5,200,000
----------------------------------------------------- ------------
Total 17,855,000
----------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(A) $318,100,792
----------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 57.5% of the
portfolio as calculated based upon total portfolio market value.
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($320,328,833) at April 30, 1996.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
BANs --Bond Anticipation Notes
COL --Collateralized
CP --Commercial Paper
GNMA --Government National Mortgage Association
GTD --Guaranty
HFA --Housing Finance Authority
HFDC --Health Facility Development Corporation
IDA --Industrial Development Authority
IDB --Industrial Development Bond
IDRB --Industrial Development Revenue Bond
INS --Insured
LIQ --Liquidity Agreement
LOCs --Letter(s) of Credit
LOC --Letter of Credit
MBIA --Municipal Bond Investors Assurance
MMMs --Money Market Municipals
PCR --Pollution Control Revenue
PLC --Public Limited Company
PRF --Prerefunded
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)
FLORIDA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $318,100,792
- -------------------------------------------------------------------------------
Income receivable 3,192,092
- -------------------------------------------------------------------------------
Deferred expenses 23,988
- ------------------------------------------------------------------------------- ------------
Total assets 321,316,872
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Income distribution payable $664,262
- --------------------------------------------------------------------
Payable to Bank 206,582
- --------------------------------------------------------------------
Accrued expenses 117,195
- -------------------------------------------------------------------- --------
Total liabilities 988,039
- ------------------------------------------------------------------------------- ------------
NET ASSETS FOR 320,328,833 shares outstanding $320,328,833
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- -------------------------------------------------------------------------------
$293,178,955/293,178,955 shares outstanding $1.00
- ------------------------------------------------------------------------------- ------------
CASH II SHARES:
- -------------------------------------------------------------------------------
$27,149,878/27,149,878 shares outstanding $1.00
- ------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FLORIDA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest $7,177,836
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 772,503
- ---------------------------------------------------------------------
Administrative personnel and services fee 146,332
- ---------------------------------------------------------------------
Custodian fees 24,543
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 30,316
- ---------------------------------------------------------------------
Directors'/Trustees' fees 1,894
- ---------------------------------------------------------------------
Auditing fees 6,030
- ---------------------------------------------------------------------
Legal fees 1,648
- ---------------------------------------------------------------------
Portfolio accounting fees 53,625
- ---------------------------------------------------------------------
Distribution services fee-Cash II Shares 74,415
- ---------------------------------------------------------------------
Shareholder services fee-Institutional Shares 408,397
- ---------------------------------------------------------------------
Shareholder services fee-Cash II Shares 74,415
- ---------------------------------------------------------------------
Share registration costs 38,916
- ---------------------------------------------------------------------
Printing and postage 11,370
- ---------------------------------------------------------------------
Insurance premiums 3,281
- ---------------------------------------------------------------------
Miscellaneous 1,734
- --------------------------------------------------------------------- -----------
Total expenses 1,649,419
- ---------------------------------------------------------------------
Waivers and reimbursements--
- ---------------------------------------------------------------------
Waiver of investment advisory fee $(504,435)
- ---------------------------------------------------------
Waiver of distribution services fee-Cash II Shares (44,649)
- ---------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares (98,015)
- --------------------------------------------------------- ---------
Total waivers (647,099)
- --------------------------------------------------------------------- -----------
Net expenses 1,002,320
- ------------------------------------------------------------------------------------ ----------
Net investment income $6,175,516
- ------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FLORIDA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 6,175,516 $ 4,683,407
- ------------------------------------------------------ --------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income:
- ------------------------------------------------------
Institutional Shares (5,241,841) (4,683,407)
- ------------------------------------------------------
Cash II Shares (933,675) --
- ------------------------------------------------------ --------------- -----------------
Change in net assets resulting from distributions
to shareholders (6,175,516) (4,683,407)
- ------------------------------------------------------ --------------- -----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 1,530,191,144 1,361,774,097
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 2,246,668 2,166,363
- ------------------------------------------------------
Cost of shares redeemed (1,365,455,497) (1,264,560,129)
- ------------------------------------------------------ --------------- -----------------
Change in net assets resulting from share
transactions 166,982,315 99,380,331
- ------------------------------------------------------ --------------- -----------------
Change in net assets 166,982,315 99,380,331
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 153,346,518 53,966,187
- ------------------------------------------------------ --------------- -----------------
End of period $ 320,328,833 $ 153,346,518
- ------------------------------------------------------ --------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FLORIDA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, OCTOBER 31,
----------- ----------- -------------
1996 1995 1994(A)
----------- ----------- -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.000
- ------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------
Net investment income 0.02 0.04 0.004
- ------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------
Distributions from net investment income (0.02) (0.04) (0.004)
- ------------------------------------------------ ------- ------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.000
- ------------------------------------------------ ------- ------- ---------
TOTAL RETURN(B) 1.59% 3.60% 0.35%
- ------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------
Expenses 0.49%* 0.45% 0.28%*
- ------------------------------------------------
Net investment income 3.21%* 3.58% 3.28%*
- ------------------------------------------------
Expense waiver/reimbursement(c) 0.32%* 0.42% 1.03%*
- ------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets, end of period (000 omitted) $ 293,179 $ 153,347 $53,966
- ------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FLORIDA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--CASH II SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
(UNAUDITED)
APRIL 30, 1996(A)
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income 0.01
- --------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Distributions from net investment income (0.01)
- -------------------------------------------------------------------- -----------
NET ASSET VALUE, END OF PERIOD $1.00
- -------------------------------------------------------------------- -----------
TOTAL RETURN(B) 0.69%
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 0.65%*
- --------------------------------------------------------------------
Net investment income 3.14%*
- --------------------------------------------------------------------
Expense waiver/reimbursement(c) 0.41%*
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 27,150
- --------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from November 17, 1995 (date of initial
public investment) to April 30, 1996.
(b) Based on net asset value which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements).
FLORIDA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Florida Municipal Cash Trust (the
"Fund"), a non-diversified portfolio. 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. Effective November 17, 1995, the Fund added Cash II Shares. The Fund
offers two classes of shares: Institutional Shares and Cash II Shares.
The investment objective of the Fund is current income exempt from federal
regular income tax consistent with stability of principal and liquidity and to
maintain an investment portfolio that will cause its shares to be exempt from
the Florida intangibles tax.
(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.
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 over a period of five years from
the Fund's commencement date.
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. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Directors. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.
Additional information on each restricted security held at April 30, 1996
is as follows:
<TABLE>
<CAPTION>
ACQUISITION
SECURITY ACQUISITION DATE COST
--------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Florida State Board of Education
Administration, Weekly VRDNs 12/28/95 $ 3,000,000
</TABLE>
CONCENTRATION OF CREDIT RISK--Since the Fund invests a substantial portion
of its assets in issuers located in Florida and Virginia, it will be more
susceptible to factors adversely affecting issuers of those states 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,
1996, 71.6% of the portfolio securities which were issued in the states of
Florida and Virginia 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 from any one institution or agency
did not exceed 12.6% of total investments.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At April 30, 1996, capital paid-in aggregated $320,328,833.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SHARES APRIL 30, 1996 1995
- ---------------------------------------------------------- -------------- ---------------
<S> <C> <C>
Shares sold 1,270,008,267 1,361,774,097
- ----------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 2,246,668 2,166,363
- ----------------------------------------------------------
Shares redeemed (1,132,422,498) (1,264,560,129)
- ---------------------------------------------------------- -------------- ---------------
Net change resulting from Institutional share
transactions 139,832,437 99,380,331
- ---------------------------------------------------------- -------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30,
CASH II SHARES 1996(A)
- ------------------------------------------------------------------------------ ------------
<S> <C>
Shares sold 260,182,877
- ------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared --
- ------------------------------------------------------------------------------
Shares redeemed (233,032,999)
- ------------------------------------------------------------------------------ -----------
Net change resulting from Cash II share transactions 27,149,878
- ------------------------------------------------------------------------------ -----------
Net change resulting from share transactions 166,982,315
- ------------------------------------------------------------------------------ -----------
</TABLE>
(a) For the period from November 17, 1995 (date of initial public investment) to
April 30, 1996.
(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 0.40% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administra-
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
tive Services Agreement shall be at least $125,000 per portfolio and $30,000 per
each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp., ("FSC") the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Institutional and Cash II shares. The Plan provides that the Fund
may incur distribution expenses of up to 0.25% of average daily net assets of
Institutional and Cash II shares, annually, to compensate FSC. The distributor
may voluntarily choose to waive any portion of its fee. The distributor can
modify or terminate this voluntary waiver at any time at its sole discretion.
For the six months ended April 30, 1996, the Institutional Shares did not incur
a distribution services fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of daily average net assets of the Fund's Institutional and Cash II Shares for
the period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily choose to
waive any portion of its fee. FSS can modify or terminate this voluntary waiver
at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
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 effective date.
For the period ended April 30, 1996, the Fund paid $1,068 pursuant to this
agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $667,370,345 and
$879,315,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Fund 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Georgia
Municipal Cash Trust, a portfolio of Federated Municipal Trust, which covers
the six-month period from November 1, 1995, through April 30, 1996. The
report begins with a discussion with the fund's portfolio manager, followed
by a complete listing of the fund's holdings and its financial statements.
The fund is a convenient way to put your ready cash to work pursuing double-
tax-free income - free from federal regular income tax and Georgia income
tax* - through a portfolio concentrated in high-quality, short-term Georgia
municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course,
the fund also brings you the added benefits of daily liquidity and stability
of principal.**
During the report period, the fund paid double-tax-free dividends of $0.02
per share. Its total net assets of $114.5 million were spread among Georgia
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on Georgia Municipal Cash Trust to seek the best tax-free income
opportunities for your cash investment needs. As always, we will
continue to provide you with the highest level of professional service. We
invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during
the semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April 1996. Faced with slowing
economic growth and benign inflationary pressures, the Fed lowered the
federal funds target rate from 5.75% to 5.50% in late December 1995, and
again from 5.50% to the current 5.25% at the end of January 1996. For the
December 1995 move, the Fed cited a better-than-expected inflation outlook
as the impetus behind the easing, although a sluggish manufacturing sector
and lackluster consumer spending was thought to have had an influence. In
January 1996, the Fed appeared swayed by the dampening effects of high
debt loads and employment uncertainty on consumer consumption along with
sluggish export growth. Through this period, the short-end of the
government and municipal yield curves anticipated the policy moves from
the Fed, and amid signs of a weakening economy looked forward to
additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market
psychology regarding both the extent and direction of changes in monetary
policy by the Fed. Recovering from the harsh winter weather and spurred
onward by lower interest rates, the housing market and consumer spending
breathed some life into the economy, which had seemed on the verge of
recession earlier in the year. The market was then stunned in early March
1996 by the report of a 705,000 increase in non-farm payroll jobs for
February 1996 - the largest increase in 12 years - which caused the yields
on short-term securities to rise by as much as 25 basis points. Now
confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy
from the Fed in the near term with a possible tightening, or increase in
rates, later in 1996.
Yields on short-term government securities reflected this rather volatile
mood in the markets. The yield on the three-month Treasury bill began
November 1995 at 5.48%, declined to 4.89% by mid-February 1996, and ended
April 1996 at 5.14%. Correspondingly, the yield on the one-year Treasury
bill began November 1995 at 5.46%, fell to 4.79% in mid-February 1996, but
rose to 5.62% by the end of April 1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances, the
fund's yield may experience more volatility on a weekly basis than
Treasury yields and taxable money fund yields. In general, yields on
municipal money market funds were lower over the reporting period. For the
fund, the seven-day net yield* of the shares on April 30, 1996 was 3.49%
compared to 3.82% six months earlier.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
Q What was your strategy for managing the fund over the semi-annual
reporting period?
A The fund started the reporting period with an average maturity of 47 days,
reflecting a neutral to bullish outlook on the direction of interest
rates. Our bias over the period was to extend the average maturity of the
fund, a task made more difficult due to significant asset growth over the
reporting period and low supply of available fixed-rate notes and bonds.
As a result, the fund's average maturity ranged from 40 to 60 days during
the six-month reporting period. By April 30, 1996, the average maturity
was 40 days, reflecting our assessment of more neutral to restrictive Fed
policy for the balance of 1996.
Q What is your outlook for the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to
be on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however,
with areas of softness in the economy still evident and with consumer
indebtedness at very high levels, there also appears to be no danger of
the economy overheating in the near term. As long as inflation remains
benign, the Fed should be content to sit on the sidelines until confronted
with signs of undue strength or considerable weakness in economic growth.
The average maturity of the fund will continue to be managed in accordance
with our expectation for a stable monetary policy in the near term.
Nevertheless, opportunities for average maturity extension will arise as
the supply of fixed-rate notes in the municipal market increases
significantly in June and July of 1996. This spike in supply may present
opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
GEORGIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-99.2%
GEORGIA-99.2%
$1,000,000 Athens, GA Water & Sewer District, (Series A), 7.60%
Bonds (United States Treasury PRF), 1/1/1997 (@102) NR(1) $ 1,047,692
5,000,000 Athens-Clarke County, GA IDA, (Series 1988), 3.35% CP
(Rhone Merieux, Inc. Project)/(Societe Generale, Paris
LOC), Mandatory Tender 5/16/1996 VMIG1 5,000,000
1,600,000 Atlanta, GA, Urban Residential Finance Authority,
Multifamily Housing Revenue Bonds (Series 1995)
Weekly VRDNs (West End Housing Development
Project)/(First Union National Bank, Charlotte, NC LOC) A-1 1,600,000
4,800,000 Atlanta, GA, Urban Residential Finance Authority,
Multifamily Rental Housing Revenue Refunding Bonds
(Series 1988A), 3.75% TOBs (West Paces Club Towers
Project)/(Sanwa Bank Ltd, Osaka LOC), Optional
Tender 5/1/1996 A-1 4,800,000
3,980,000 Brunswick, GA, Housing Authority, (Series S93) Weekly
VRDNs (Island Square Apartments)/(Columbus Bank
and Trust Co., GA LOC) A-1 3,980,000
3,400,000 Burke County, GA Development Authority, (Series
1992A), 3.30% CP (Oglethorpe Power Corp.)/(Credit
Suisse, Zurich LOC), Mandatory Tender 5/23/1996 A-1+ 3,400,000
2,050,000 Carrolton, GA Payroll Development Authority, (Series
1993) Weekly VRDNs (Sunox, Inc. Project)/(First Union
National Bank, Charlotte, NC LOC) P-1 2,050,000
2,155,000 Cherokee County, GA Development Authority, IDRB
Weekly VRDNs (Morrison Products, GA)/(Society
National Bank, Cleveland, OH LOC) P-1 2,155,000
3,500,000 Clayton County, GA Development Authority, (Series
1994) Weekly VRDNs (Lear Seating Corp.)/(Chemical
Bank, New York LOC) P-1 3,500,000
1,900,000 Cobb County, GA IDA, IDRB (Series 1995) Weekly
VRDNs (Consolidated Engineering Company, Inc.
Project)/(Nationsbank of Georgia, N.A. LOC) A-1 1,900,000
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
GEORGIA-CONTINUED
$1,170,000 Columbia County, GA Development Authority, (Series
1991) Weekly VRDNs (Augusta Sportswear, Inc.)/
(Wachovia Bank of Georgia NA, Atlanta LOC) Aa2 $ 1,170,000
3,800,000 Columbus, GA IDA Industrial & Port Development
Commission, (Series 1992) Weekly VRDNs (Maine Street
Village Partnership)/(Columbus Bank and Trust Co.,
GA LOC) A-1 3,800,000
1,455,000 Columbus, GA IDA, (Series 90B) Weekly VRDNs
(R. P. Real Estate, Inc.)/(Columbus Bank and Trust Co.,
GA LOC) A-1 1,455,000
6,000,000 Crisp County, GA Development Authority, (Series B),
4.30% TOBs (Masonite Corporation)/(International
Paper Co. GTD), Optional Tender 9/1/1996 A-2 6,000,000
1,775,000 De Kalb County, GA Development Authority, (Series
1992) Weekly VRDNs (House of Cheatham, Inc. Project)/
(Nationsbank of Georgia, N.A. LOC) P-1 1,775,000
600,000 De Kalb County, GA Development Authority, (Series
1993) Weekly VRDNs (Pet, Inc.)/(PNC Bank, N.A. LOC) P-1 600,000
2,950,000 Douglas County, GA School District, 3.75% TANs,
12/31/1996 NR 2,959,582
1,000,000 Floyd County, GA, (Series 1996), 3.49% TANs,
12/31/1996 NR 1,000,579
1,200,000 Forsythe County, GA Development Authority, (Series
1989) Weekly VRDNs (Cross Systems, Inc. Project)/
(Meridian Bank, Reading, PA LOC) P-1 1,200,000
1,000,000 Forsythe County, GA Development Authority, IDRB
(Series 1995) Weekly VRDNs (American BOA, Inc.
Project)/(Dresdner Bank Ag, Frankfurt LOC) Aaa 1,000,000
4,400,000 Franklin County, GA Industrial Building Authority,
(Series 1995) Weekly VRDNs (Bosal Industries, Inc.)/
(ABN AMRO Bank N.V., Amsterdam LOC) A-1+ 4,400,000
2,000,000 Fulco, GA Hospital Authority, (Series 1989), 4.00% CP
(St. Joseph's Hospital of Atlanta)/(SunTrust Bank,
Atlanta LOC), Mandatory Tender 5/17/1996 VMIG1 2,000,000
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
GEORGIA-CONTINUED
$1,000,000 Fulton County, GA Building Authority, 8.20% Bonds
(United States Treasury PRF), 1/1/1997 (@102) Aaa $ 1,050,177
2,335,000 Fulton County, GA Housing Authority, Multifamily
Housing Revenue Bonds (Series 1993) Weekly VRDNs
(Provence North Apartments Project)/(Federal Home
Loan Bank of Atlanta LOC) A-1+ 2,335,000
5,115,000 Georgia State HFA, (Series 1990C), 3.80% TOBs (First
National Bank of Chicago LIQ), Optional Tender
6/1/1996 NR(2) 5,115,000
4,000,000 Georgia State Municipal Gas Authority, Gas Revenue
Bonds (Series D), 3.20% CP (Wachovia Bank of NC, NA,
Winston-Salem LOC), Mandatory Tender 6/10/1996 A-1+ 4,000,000
2,000,000 Georgia State, 7.25% Bonds, 9/1/1996 Aaa 2,022,189
1,000,000 Georgia State, GO UT Bonds (Series C), 6.50% Bonds,
7/1/1996 Aaa 1,005,358
1,000,000 Glynn County, GA, 3.60% TANs, 12/31/1996 NR 1,001,294
4,000,000 Gwinnett County, GA IDA Daily VRDNs (Volvo)/
(Union Bank of Switzerland, Zurich LOC) NR 4,000,000
1,000,000 Gwinnett County, GA School District, UT GO (Series B),
5.45% Bonds, 2/1/1997 AA+ 1,014,268
2,000,000 Gwinnett County, GA, Certificates of Participation Water
& Sewer, 7.75% Bonds, 8/1/1996 AA+ 2,018,928
3,375,000 Jackson County, GA IDA, (Series 1996) Weekly VRDNs
(Buhler Quality Yarns Corporation Project)/(Union Bank
of Switzerland, Zurich LOC) P-1 3,375,000
3,180,000 La Grange, GA, Multifamily Housing Authority,
Revenue Bonds, 4.25% TOBs (Lee's Crossing Project
Phase II)/(Barnett Bank of Jacksonville LOC), Optional
Tender 5/1/1996 A-1 3,180,000
3,000,000 La Grange, GA, Multifamily Housing Authority,
Revenue Bonds, 4.25% TOBs (Lee's Crossing Project
Phase I)/(Barnett Bank of Jacksonville LOC), Optional
Tender 5/1/1996 A-1 3,000,000
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
GEORGIA-CONTINUED
$ 880,000 Macon-Bibb County, GA Industrial Authority, IDRB
(Series 1990) Weekly VRDNs (Diamond Plastics
Corporation Project)/(Nationsbank, N.A. (North
Carolina) LOC) A-1 $ 880,000
1,280,000 Macon-Bibb County, GA Urban Development Authority,
Refunding Revenue Bonds (Series 1995) Weekly
VRDNs (Macon Hotel Investors Project)/(NBD Bank,
Michigan LOC) AA 1,280,000
1,400,000 Marietta, GA Housing Authority, Multifamily Housing
Revenue Bonds (Series 1995) Weekly VRDNs (Chalet
Apartments Project)/(General Electric Capital
Corp. LOC) P-1 1,400,000
2,200,000 Metropolitan Atlanta Rapid Transit Authority, Tender
Option Custodial Receipts (BT-70), 3.80% TOBs (AMBAC
INS)/(Bankers Trust Co., New York LIQ), Mandatory
Tender 10/3/1996 Aaa 2,200,000
1,600,000 Municipal Electric Authority of Georgia, (Series 1985A),
3.25% CP (Bayerische Landesbank Girozentrale, Credit
Suisse, Zurich and Morgan Guaranty Trust Co.,
New York LOCs), Mandatory Tender 5/14/1996 A-1+ 1,600,000
3,000,000 Municipal Electric Authority of Georgia, (Series 1994B),
3.25% CP (ABN AMRO Bank N.V., Amsterdam LOC),
Mandatory Tender 5/14/1996 A-1+ 3,000,000
1,000,000 Rockdale County, GA Development Authority, (Series
1995) Weekly VRDNs (Great Southern Wood Preserving
Co.)/(SunTrust Bank, Central Florida LOC) P-1 1,000,000
5,700,000 Savannah, GA EDA, (Series 1995A) Weekly VRDNs
(Home Depot, Inc.) A-1 5,700,000
1,700,000 Savannah, GA Housing Authority, Multifamily
Housing Revenue Bonds (Series 1985 B) Weekly VRDNs
(Somerset Wharf Project)/(Amsouth Bank N.A.,
Birmingham LOC) A-1 1,700,000
1,000,000 Wayne County, GA, IDA, Revenue Bonds, (Series 1995)
Weekly VRDNs (Harsco Corp.)/(Nationsbank, N.A.
(North Carolina) LOC) A-1 1,000,000
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
GEORGIA-CONTINUED
$ 4,000,000 Whitfield County, GA Development Authority Weekly
VRDNs (Franklin Industries Inc., Project)/(Nationsbank
of Virginia, N.A. LOC) P-1 $ 4,000,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(A) $ 113,670,067
</TABLE>
Securities that are subject to alternative minimum tax represent 58.6% of the
portfolio as calculated based upon total portfolio market value.
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($114,535,290) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
AMBAC - American Municipal Bond Assurance Corporation
CP - Commercial Paper
EDA - Economic Development Authority
GO - General Obligation
GTD - Guaranty
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IDRB - Industrial Development Revenue Bond
INS - Insured
LIQ - Liquidity Agreement
LOCs - Letter(s) of Credit
LOC - Letter of Credit
PRF - Prerefunded
TANs - Tax Anticipation Notes
TOBs - Tender Option Bonds
UT - Unlimited Tax
VRDNs - Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
GEORGIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 113,670,067
Cash 354,802
Income receivable 811,983
Deferred expenses 22,800
Total assets 114,859,652
LIABILITIES:
Income distribution payable $ 279,604
Accrued expenses 44,758
Total liabilities 324,362
Net Assets for 114,535,290 shares outstanding $ 114,535,290
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$114,535,290/114,535,290 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GEORGIA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 2,006,222
EXPENSES:
Investment advisory fee $ 261,070
Administrative personnel and services fee 62,171
Custodian fees 12,657
Transfer and dividend disbursing agent fees and expenses 11,009
Directors'/Trustees' fees 766
Auditing fees 4,383
Legal fees 967
Portfolio accounting fees 21,504
Shareholder services fee 130,535
Share registration costs 12,617
Printing and postage 5,535
Insurance premiums 2,036
Miscellaneous 2,326
Total expenses 527,576
Waivers and reimbursements -
Waiver of investment advisory fee $ (261,070)
Waiver of shareholder services fee (15,030)
Reimbursement of other operating expenses (28,478)
Total waivers and reimbursements (304,578)
Net expenses 222,998
Net investment income $ 1,783,224
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GEORGIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1996 1995(A)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS -
Net investment income $ 1,783,224 $ 663,846
DISTRIBUTIONS TO SHAREHOLDERS -
Distributions from net investment income (1,783,224) (663,846)
SHARE TRANSACTIONS-
Proceeds from sale of shares 342,571,393 276,631,071
Net asset value of shares issued to shareholders in payment
of distributions declared 736,761 363,049
Cost of shares redeemed (340,050,487) (165,716,497)
Change in net assets resulting from share transactions 3,257,667 111,277,623
Change in net assets 3,257,667 111,277,623
NET ASSETS:
Beginning of period 111,277,623 -
End of period $ 114,535,290 $ 111,277,623
</TABLE>
* For the period from August 22, 1995 (date of initial public investment) to
October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
GEORGIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) PERIOD ENDED
APRIL 30, OCTOBER 31,
1996 1995(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) 1.70% 0.73%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.43%* 0.25%*
Net investment income 3.42%* 3.81%*
Expense waiver/reimbursement(c) 0.58%* 0.75%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $114,535 $111,278
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 22, 1995 (date of initial
public investment) to October 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GEORGIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Georgia Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
The investment objective of the Fund is current income exempt from federal
regular income tax and the income tax imposed by the State of Georgia
consistent with stability of principal and liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS-The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under
the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS-Interest income and
expenses are accrued daily. Bond premium and discount, if applicable,
are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-
dividend date.
FEDERAL TAXES-It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of its income.
Accordingly, no provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS-The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-
issued securities on the trade date and maintains security positions
such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
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 over a period of five
years from the Fund's commencement 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, 1996, 84.4% 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 from any one institution or agency did not exceed
8.1% of total investments.
GEORGIA MUNICIPAL CASH TRUST
USE OF ESTIMATES-The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts of assets,
liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimated.
OTHER-Investment transactions are accounted for on the trade date.
3. 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, 1996, capital paid-in aggregated $114,535,290.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, OCTOBER 31,
1996 1995(A)
<S> <C> <C>
Shares sold 342,571,393 276,631,071
Shares issued to shareholders in payment of distributions
declared 736,761 363,049
Shares redeemed (340,050,487) (165,716,497)
Net change resulting from share transactions 3,257,667 111,277,623
</TABLE>
(a) Reflects operations for the period from August 22, 1995 (date of initial
public investment) to October 31, 1995.
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 0.50% of the Fund's average daily net
assets.
The Adviser may voluntarily choose to waive any portion of its fee
and/or reimburse 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is based
on the level of average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
GEORGIA MUNICIPAL CASH TRUST
SHAREHOLDER SERVICES FEE-Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will
pay FSS up to 0.25% of average daily net assets of the Fund for the
period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive any portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-FServ,
through its subsidiary, Federated Shareholder Services Company serves
as transfer and dividend disbursing agent for the Fund. The fee paid
to FServ is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES-FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES-Organizational expenses of $13,648 were borne
initially by Adviser. The Fund has agreed to reimburse the Adviser for
the organizational expenses during the five-year period following
effective date. For the period ended April 30, 1996, the Fund paid
$531 pursuant to this agreement.
INTERFUND TRANSACTIONS-During the period ended April 30, 1996, the
Fund engaged in purchase and sale transactions with funds that have a
common investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7
under the Act amounting to $181,425,000 and $234,029,429,
respectively.
GENERAL-Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
<TABLE>
<S> <S>
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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
Georgia
Municipal
Cash
Trust
Semi-Annual Report
To Shareholders
April 30, 1996
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 314229691
G01478-01 (6/96)
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, which covers the
six-month period from November 1, 1995 through April 30, 1996. The report begins
with a discussion with the fund's portfolio manager, followed by a complete
listing of the fund's holdings and its financial statements.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and Maryland
personal income tax*--through a portfolio concentrated in high-quality,
short-term Maryland municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.02 per
share. Its total net assets of $47.7 million were spread among Maryland
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on Maryland Municipal Cash Trust to seek the best tax-free income
opportunities for your cash. As always, we will continue to provide you with the
highest level of professional service. We appreciate your support and invite
your questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April 1996. Faced with slowing
economic growth and benign inflationary pressures, the Fed lowered the
federal funds target rate from 5.75% to 5.50% in late December 1995, and again
from 5.50% to the current 5.25% at the end of January 1996. For the December
1995 move, the Fed cited a better-than-expected inflation outlook as the impetus
behind the easing, although a sluggish manufacturing sector and lackluster
consumer spending was thought to have had an influence. In January 1996, the Fed
appeared swayed by the dampening effects of high debt loads and employment
uncertainty on consumer consumption along with sluggish export growth. Through
this period, the short-end of the government and municipal yield curves
anticipated the policy moves from the Fed, and amid signs of a weakening economy
looked forward to additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances, the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the reporting period. However, the fund's seven-day
net yield* was 3.37% on April 30, 1996 versus 3.33% on November 1, 1995.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
- --------------------------------------------------------------------------------
Q What was your strategy for managing the fund over the semi-annual reporting
period?
A The fund started the reporting period with an average maturity of 66 days,
which is considered a neutral to slightly bullish outlook on short-term
interest rates. Because of the lack of readily available fixed-rate notes
and bonds in Maryland, and the change in sentiment regarding the direction of
interest rates, we allowed the average maturity to roll inward over the period
to a low of approximately 41 days in mid-April. At the end of the reporting
period, the average maturity was 43 days, reflecting our assessment of more
neutral to restrictive Fed policy for the balance of 1996.
Q What is your outlook for the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to "lock-in" yields which are attractive relative to
comparable maturity taxable securities. As a result, we anticipate the average
maturity of the fund could be slightly longer throughout the summer months.
MARYLAND MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- --------------------------------------------------------- ------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.2%
- ---------------------------------------------------------------------------
MARYLAND--96.2%
---------------------------------------------------------
$ 1,000,000 Anne Arundel County, MD, EDRB (Series 1988), 3.35% CP
(Baltimore Gas & Electric Co.), Mandatory Tender 8/8/1996 A-1 $ 1,000,000
---------------------------------------------------------
1,500,000 Anne Arundel County, MD, EDRB (Series 1988),
3.50% CP (Baltimore Gas & Electric Co.), Mandatory Tender
5/16/1996 A-1 1,500,000
---------------------------------------------------------
2,000,000 Anne Arundel County, MD, EDRB (Series 1996) Weekly VRDNs
(Atlas Container Corporation Project)/(Mellon Bank NA,
Pittsburgh LOC) P-1 2,000,000
---------------------------------------------------------
1,475,000 Baltimore County, MD IDA, (Series 1994A) Weekly VRDNs
(Pitts Realty Limited Partnership)/(PNC Bank, NA,
Delaware LOC) P-1 1,475,000
---------------------------------------------------------
1,900,000 Baltimore County, MD Metropolitan District, Special
Assessment Bonds-63rd Issue, 5.70% Bonds, 7/1/1996 Aaa 1,905,744
---------------------------------------------------------
1,700,000 Baltimore County, MD Port Facility Monthly VRDNs
(Occidental Petroleum Corp.)/(Morgan Guaranty Trust Co.,
New York LOC) A-1+ 1,700,000
---------------------------------------------------------
1,700,000 Baltimore County, MD, Revenue Bonds (1994 Issue) Weekly
VRDNs (Direct Marketing Associates, Inc. Facility)/(First
National Bank of Maryland, Baltimore LOC) A-1 1,700,000
---------------------------------------------------------
1,000,000 Baltimore, MD PCR Weekly VRDNs (SCM Plants, Inc.)/
(Barclays Bank PLC, London LOC) A-1+ 1,000,000
---------------------------------------------------------
800,000 Baltimore, MD, (Series 1988) Weekly VRDNs (Cherill
Associated Facility)/(Nationsbank of Maryland, N.A. LOC) P-1 800,000
---------------------------------------------------------
1,500,000 Cecil County, MD, County Commissioners EDRB (Series
1988S) Weekly VRDNs (Williams Mobile Offices, Inc.)/
(First National Bank of Maryland, Baltimore LOC) A-1 1,500,000
---------------------------------------------------------
910,000 Elkton, MD, Revenue Refunding Bonds (Series 1992) Weekly
VRDNs (Highway Service Ventures, Inc. Facility)/(First
Union National Bank, Charlotte, N.C. LOC) A-1 910,000
---------------------------------------------------------
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- --------------------------------------------------------- ------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ---------------------------------------------------------------------------
$ 1,500,000 Frederick County, MD, Revenue Bonds (Series 1995) Weekly
VRDNs (Sheppard Pratt Residential Treatment
Facility)/(Societe Generale, Paris LOC) P-1 $ 1,500,000
---------------------------------------------------------
3,141,000 Hartford County, MD, (Series 1989) Weekly VRDNs (Hartford
Commons Associates Facility)/(Nationsbank of Virginia,
N.A. LOC) P-1 3,141,000
---------------------------------------------------------
1,200,000 Maryland Health & Higher Educational Facilities
Authority, (Series 1985B) Weekly VRDNs (First National
Bank of Chicago LOC) VMIG1 1,200,000
---------------------------------------------------------
1,300,000 Maryland Health & Higher Educational Facilities
Authority, Revenue Bonds (Series 1985A) Weekly VRDNs
(First National Bank of Chicago LOC) VMIG1 1,300,000
---------------------------------------------------------
1,000,000 Maryland Health & Higher Educational Facilities
Authority, Revenue Bonds (Series 1992B) Weekly VRDNs
(North Arundel Hospital)/(Mellon Bank NA, Pittsburgh LOC) VMIG1 1,000,000
---------------------------------------------------------
1,750,000 Maryland State Community Development Administration,
(Second Series), 3.55% TOBs, Mandatory Tender 10/1/1996 AA 1,750,000
---------------------------------------------------------
1,000,000 Maryland State Community Development Administration,
(Series 1990B) Weekly VRDNs (Cherry Hill Apartment
Ltd.)/(Nationsbank of Maryland, N.A. LOC) P-1 1,000,000
---------------------------------------------------------
2,000,000 Maryland State Energy Financing Administration, Annual
Tender Solid Waste Disposal Revenue Refunding Bonds,
4.30% TOBs (Nevamar Corp.)/(International Paper Co. GTD),
Optional Tender 9/1/1996 A-2 2,000,000
---------------------------------------------------------
3,000,000 Maryland State Energy Financing Administration, IDRB
(Series 1988) Weekly VRDNs (Morningstar Foods, Inc.)/
(Nationsbank of Texas, N.A. LOC) P-1 3,000,000
---------------------------------------------------------
1,400,000 Maryland State IDFA, Economic Development Revenue
Refunding Bonds (Series 1994) Weekly VRDNs (Johnson
Controls, Inc.) VMIG1 1,400,000
---------------------------------------------------------
1,000,000 Montgomery County, MD EDA Weekly VRDNs (Howard Hughes
Medical Center) A-1+ 1,000,000
---------------------------------------------------------
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- --------------------------------------------------------- ------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ---------------------------------------------------------------------------
$ 1,600,000 Montgomery County, MD EDA Weekly VRDNs
(U.S. Pharmacopeial Convention Facility)/(Chemical Bank,
New York LOC) VMIG1 $ 1,600,000
---------------------------------------------------------
1,500,000 Montgomery County, MD Housing Opportunities Commission,
(Series 1996 C), 3.70% TOBs, Mandatory Tender 3/17/1997 VMIG1 1,500,000
---------------------------------------------------------
1,000,000 Montgomery County, MD Housing Opportunities Commission,
Multifamily Housing Revenue Bonds
(1995 Series B), 3.90% BANs, 11/14/1996 MIG1 1,000,000
---------------------------------------------------------
2,000,000 Montgomery County, MD, Unlimited GO's, 9.20% Bonds,
6/1/1996 NR(1) 2,008,984
---------------------------------------------------------
1,100,000 Prince George's County, MD, IDRB (Series 1993), 4.00%
TOBs (International Paper Co.)/(International Paper Co.
GTD), Optional Tender 7/15/1996 A-2 1,100,000
---------------------------------------------------------
1,500,000 University of Maryland, Revolving Equipment Loan Program
(Series A) Weekly VRDNs (Student Loan Marketing
Association LIQ) A-1+ 1,500,000
---------------------------------------------------------
1,135,000 Washington Suburban Sanitation District, MD, General
Construction GO Bonds, 4.50% Bonds, 6/1/1996 Aa1 1,135,745
---------------------------------------------------------
2,260,000 Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs
(Field Container Co. L.P.)/(Northern Trust Co., Chicago,
IL LOC) A-1+ 2,260,000
--------------------------------------------------------- -----------
Total 45,886,473
--------------------------------------------------------- -----------
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- --------------------------------------------------------- ------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- ---------------------------------------------------------------------------
PUERTO RICO--2.9%
---------------------------------------------------------
$ 1,400,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 1983A), 3.75% TOBs (Reynolds Metals Co.)/
(ABN AMRO Bank N.V., Amsterdam LOC),
Optional Tender 9/1/1996 A-1+ $ 1,400,000
--------------------------------------------------------- -----------
TOTAL INVESTMENTS, AT AMORTIZED COST(A) $47,286,473
--------------------------------------------------------- -----------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 51% of the
portfolio as calculated based upon total portfolio market value.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($47,681,650) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
BANs -- Bond Anticipation Notes
CP -- Commercial Paper
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bonds
GO -- General Obligation
GTD -- Guaranty
IDA -- Industrial Development Authority
IDRB -- Industrial Development Revenue Bond
IDFA -- Industrial Development Finance Authority
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
PCA -- Pollution Control Authority
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
TOBs -- Tender Option Bonds
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements.)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $47,286,473
- --------------------------------------------------------------------------------
Cash 102,493
- --------------------------------------------------------------------------------
Income receivable 391,253
- --------------------------------------------------------------------------------
Deferred expenses 21,244
- -------------------------------------------------------------------------------- -----------
Total assets 47,801,463
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $112,579
- ---------------------------------------------------------------------
Accrued expenses 7,234
- --------------------------------------------------------------------- --------
Total liabilities 119,813
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 47,681,650 shares outstanding $47,681,650
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
$47,681,650 / 47,681,650 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $813,928
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $106,891
- -------------------------------------------------------------------------
Administrative personnel and services fee 62,249
- -------------------------------------------------------------------------
Custodian fees 8,481
- -------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 10,674
- -------------------------------------------------------------------------
Directors'/Trustees' fees 1,168
- -------------------------------------------------------------------------
Auditing fees 6,374
- -------------------------------------------------------------------------
Legal fees 1,688
- -------------------------------------------------------------------------
Portfolio accounting fees 17,683
- -------------------------------------------------------------------------
Shareholder services fee 53,446
- -------------------------------------------------------------------------
Share registration costs 12,202
- -------------------------------------------------------------------------
Printing and postage 5,920
- -------------------------------------------------------------------------
Insurance premiums 2,300
- -------------------------------------------------------------------------
Miscellaneous 4,166
- ------------------------------------------------------------------------- --------
Total expenses 293,242
- -------------------------------------------------------------------------
Waivers and reimbursements--
- -------------------------------------------------------------------------
Waiver of investment advisory fee $(106,891)
- -------------------------------------------------------------
Waiver of shareholder services fee (2,138)
- -------------------------------------------------------------
Reimbursement of other operating expenses (44,313)
- ------------------------------------------------------------- ---------
Total waivers and reimbursements (153,342)
- ------------------------------------------------------------------------- --------
Net expenses 139,900
- ------------------------------------------------------------------------------------- --------
Net investment income $674,028
- ------------------------------------------------------------------------------------- --------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------
OPERATIONS--
- ---------------------------------------------------
Net investment income $ 674,028 $ 1,952,599
- --------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------
Distributions from net investment income (674,028) (1,952,599)
- --------------------------------------------------- ------------- -------------
SHARE TRANSACTIONS--
- ---------------------------------------------------
Proceeds from sale of shares 57,113,391 180,327,160
- ---------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 534,102 1,800,625
- ---------------------------------------------------
Cost of shares redeemed (61,366,037) (187,002,830)
- --------------------------------------------------- ------------- -------------
Change in net assets resulting from share
transactions (3,718,544) (4,875,045)
- --------------------------------------------------- ------------- -------------
Change in net assets (3,718,544) (4,875,045)
- ---------------------------------------------------
NET ASSETS:
- ---------------------------------------------------
Beginning of period 51,400,194 56,275,239
- --------------------------------------------------- ------------- -------------
End of period $ 47,681,650 $ 51,400,194
- --------------------------------------------------- ------------- -------------
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER
SIX MONTHS ENDED 31,
(UNAUDITED) ------------------
APRIL 30, 1996 1995 1994(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 0.01
- ---------------------------------------------------- ------ ------ ------
LESS DISTRIBUTIONS
- ----------------------------------------------------
Distributions from net investment income (0.02) (0.03) (0.01)
- ---------------------------------------------------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------- ------ ------ ------
TOTAL RETURN(B) 1.56% 3.36% 1.30%
- ----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------
Expenses 0.65%* 0.65% 0.46%*
- ----------------------------------------------------
Net investment income 3.15%* 3.30% 2.68%*
- ----------------------------------------------------
Expense waiver/reimbursement(c) 0.72%* 0.50% 0.53%*
- ----------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------
Net assets, end of period (000 omitted) $47,682 $51,400 $56,275
- ----------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Maryland Municipal Cash Trust (the
"Fund"), a non-diversified portfolio. The financial statements of the other
portfolios are presented separately. The assets of each portfolio are segregated
and a shareholder's interest is limited to the portfolio in which shares are
held.
The investment objective of the Fund is current income exempt from federal
regular income tax and the income tax imposed by the state of Maryland
consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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 over a period of five years from
the Fund's commencement date.
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 associated with such factors, at April 30, 1996, 66.8% 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 from any one institution or agency
did not exceed 6.6% of total investments.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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, 1996, capital paid-in aggregated $47,681,650.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
----------------- -----------------
<S> <C> <C>
- ---------------------------------------------------
Shares sold 57,113,391 180,327,160
- ---------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 534,102 1,800,625
- ---------------------------------------------------
Shares redeemed (61,366,037) (187,002,830)
- --------------------------------------------------- ----------- ------------
Net change resulting from shares transactions (3,718,544) (4,875,045)
- --------------------------------------------------- ----------- ------------
</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 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the
MARYLAND MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 0.25%
of daily average net assets of the Fund shares for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $14,446 and start-up
administrative service expenses of $31,506 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 effective date.
For the period ended April 30, 1996, the Fund paid $1,242 and $3,326,
respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $37,900,000 and
$34,400,000, 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not
insured or guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the
Federal Reserve Board, or any other government agency. Investment in mutual
funds involves
investment risk, including possible loss of principal. Although money market
funds seek to maintain
a stable net asset value of $1.00 per share, there is no assurance that they
will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or
accompanied by the fund's prospectus which contains facts concerning its
objective and policies,
management fees, expenses and other information.
- -----------------------------------------------------------------------------
MARYLAND
- -----------------------------------------------------------------------------
MUNICIPAL
- -----------------------------------------------------------------------------
CASH
- -----------------------------------------------------------------------------
TRUST
- -----------------------------------------------------------------------------
SEMI-ANNUAL REPORT TO SHAREHOLDERS
- -----------------------------------------------------------------------------
APRIL 30, 1996
[LOGO OF FEDERATED INVESTORS]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and a subsidiary of Federated Investors.
Cusip 314229774
G01175-01 (6/96) [RECYCLED LOGO]
- --------------------------------------------------------------------------------
MICHIGAN
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
April 30,
1996
FEDERATED INVESTORS
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 314229667
Cusip 314229725
G01456-02 (6/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Michigan
Municipal Cash Trust, a portfolio of Federated Municipal Trust, which covers the
six-month period from November 1, 1995 through April 30, 1996. The report begins
with a discussion with the fund's portfolio manager, followed by a complete
listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares and
Institutional Service Shares.
The fund is a convenient way to put your ready cash to work pursuing
double-tax-free income--free from federal regular income tax and Michigan
personal income tax *--through a portfolio concentrated in high-quality,
short-term Michigan municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid double-tax-free dividends of $0.005 per
share for Institutional Shares $0.02 per share for Institutional Service Shares.
The fund's total net assets of $70.7 million were spread among Michigan
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on Michigan Municipal Cash Trust to seek the best tax-free income
opportunities for your cash investment needs. As always, we will strive to
provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
LOGO
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April 1996. Faced with slowing
economic growth and benign inflationary pressures, the Fed lowered the
federal funds target rate from 5.75% to 5.50% in late December 1995, and again
from 5.50% to the current 5.25% at the end of January 1996. For the December
1995 move, the Fed cited a better-than-expected inflation outlook as the impetus
behind the easing, although a sluggish manufacturing sector and lackluster
consumer spending was thought to have had an influence. In January 1996, the Fed
appeared swayed by the dampening effects of high debt loads and employment
uncertainty on consumer consumption along with sluggish export growth. Through
this period, the short-end of the government and municipal yield curves
anticipated the policy moves from the Fed, and amid signs of a weakening economy
looked forward to additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in twelve
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November 1995 at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances, the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
market funds were lower over the period. The seven-day net yield* of the fund's
Institutional Shares on April 30, 1996 was 3.63% which is equivalent to a
taxable yield of 6.29% for Michigan investors subject to the highest federal and
state tax rates.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
- --------------------------------------------------------------------------------
The seven-day net yield* of the fund's Institutional Service Shares on April 30,
1996 was 3.50% which is equivalent to a taxable yield of 6.06% for Michigan
investors subject to the highest federal and state tax rates.
Q What was your strategy for managing the fund over the semi-annual reporting
period?
A The fund started the reporting period with an average maturity of 64 days,
which is somewhat bullish. We allowed the fund's average maturity to roll
inward over the reporting period due to uneven supply of Michigan
fixed-rate notes and bonds and due to a change in sentiment regarding the
direction of interest rates. At the end of the reporting period, the average
maturity was 28 days, reflecting our assessment of more neutral to restrictive
Fed policy for the balance of 1996. Going forward, we will continue to monitor
the overall interest rate environment, the economic outlook for the State, and
supply factors as prime indicators of appropriate fund strategy.
Q What is your outlook for rates in the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
MICHIGAN MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- --------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--99.3%
- -------------------------------------------------------------------------
MICHIGAN--97.9%
-------------------------------------------------------
$1,000,000 Auburn Hills, MI EDC, Limited Obligation Multi-Option
Revenue Bonds (Series 1995) Weekly VRDNs (Suburban
Tool, Inc.)/(Huntington National Bank, Columbus, OH
LOC) P-1 $ 1,000,000
-------------------------------------------------------
2,909,000 Battle Creek, MI Economic Development Corporation, Ltd.
Obligation Economic Development Revenue Refunding Bonds
(Series 1992) Weekly VRDNs (Michigan Carton &
Paperboard Company)/(American National Bank, Chicago
LOC) P-1 2,909,000
-------------------------------------------------------
1,580,000 Bedford Township, MI Economic Development Corp., EDRB
(Series 1985) Weekly VRDNs (Form-Tech Steel, Inc.)/
(Society National Bank, Cleveland, OH LOC) P-1 1,580,000
-------------------------------------------------------
1,400,000 Bruce Township, MI Hospital Finance Authority,
Adjustable Rate Tender Securities (Series 1988B), 3.70%
TOBs (Sisters of Charity Health Care System)/(MBIA
INS)/(Morgan Guaranty Trust Co., New York LIQ),
Optional Tender 5/1/1996 VMIG1 1,400,000
-------------------------------------------------------
900,000 Clinton Twp, MI EDA, Tender Securities Weekly VRDNs
(Sisters of Charity Health Care System)/(MBIA INS)/
(Morgan Guaranty Trust Co., New York LIQ) A-1+ 900,000
-------------------------------------------------------
1,100,000 Cornell, MI Economic Development Corp., Industrial
Development Revenue Refunding Bonds (Series 1990),
3.80% CP (Mead-Escanaba Paper Co. Project)/(Credit
Suisse, Zurich LOC), Mandatory Tender 5/30/1996 A-1+ 1,100,000
-------------------------------------------------------
850,000 Dearborn, MI Economic Development Corp., (Series 1990)
Weekly VRDNs (Exhibit Productions, Inc. Project)/(First
of America Bank -- Illinois LOC) P-1 850,000
-------------------------------------------------------
1,650,000 Dearborn, MI Economic Development Corp., (Series 1991)
Weekly VRDNs (Oakbrook Common)/(Mellon Bank NA,
Pittsburgh LOC) A-1 1,650,000
-------------------------------------------------------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- --------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$1,000,000 Delta County, MI Economy Development Corp.,
Environmental Improvement Revenue Refunding Bonds
(Series 1985 A), 3.15% CP (Mead-Escanaba Paper Co.
Project)/(Swiss Bank Corp., Basle LOC), Mandatory
Tender 5/9/1996 P-1 $ 1,000,000
-------------------------------------------------------
1,000,000 Delta County, MI Economy Development Corp.,
Environmental Improvement Revenue Refunding Bonds
(Series 1985 A), 3.25% CP (Mead-Escanaba Paper Co.
Project)/(Swiss Bank Corp., Basle LOC), Mandatory
Tender 5/9/1996 P-1 1,000,000
-------------------------------------------------------
2,000,000 Delta County, MI Economy Development Corp.,
Environmental Improvement Revenue Refunding Bonds
(Series 1985 B), 3.05% CP (Mead-Escanaba Paper Co.
Project)/(Union Bank of Switzerland, Zurich LOC),
Mandatory Tender 5/8/1996 P-1 2,000,000
-------------------------------------------------------
1,450,000 Kalamazoo, MI Economic Development Corp., 1995 Limited
Obligation Revenue Refunding Bonds Weekly VRDNs
(Wyndham Project, MI)/(First of America Bank -Illinois
LOC) A-1 1,450,000
-------------------------------------------------------
1,300,000 Melvindale, MI, GO UT, 3.90% TANs, 8/15/1996 NR(3) 1,300,721
-------------------------------------------------------
2,800,000 Michigan Higher Education Student Loan Authority,
Refunding Revenue Bonds (Series X11-B) Weekly VRDNs
(AMBAC INS)/(Kredietbank N.V., Brussels LIQ) P-1 2,800,000
-------------------------------------------------------
3,100,000 Michigan Job Development Authority, Limited Obligation
Revenue Bonds Weekly VRDNs (Andersons Project) /(Credit
Lyonnais, Paris LOC) P-2 3,100,000
-------------------------------------------------------
1,000,000 Michigan Municipal Bond Authority, (Series 1995C),
4.50% RANs, 9/6/1996 SP-1+ 1,001,848
-------------------------------------------------------
1,000,000 Michigan Municipal Bond Authority, 4.50% RANs, 7/3/1996 SP-1+ 1,001,247
-------------------------------------------------------
2,000,000 Michigan State Building Authority, (Series 1), 3.50% CP
(Canadian Imperial Bank of Commerce, Toronto LOC),
Mandatory Tender 5/7/1996 A-1+ 2,000,000
-------------------------------------------------------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- --------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$ 310,000 Michigan State Hospital Finance Authority, (Series
1994) Weekly VRDNs (Mt. Clemens General
Hospital)/(Comerica Bank, Detroit, MI LOC) VMIG1 $ 310,000
-------------------------------------------------------
1,000,000 Michigan State Hospital Finance Authority, (Series A)
Weekly VRDNs (OSF Health Care Systems) VMIG1 1,000,000
-------------------------------------------------------
2,000,000 Michigan State Hospital Finance Authority, Hospital
Equipment Loan Program Bonds (Series A) Weekly VRDNs
(First of America Bank -- Michigan LOC) VMIG1 2,000,000
-------------------------------------------------------
1,105,000 Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds (Series 1995), 4.00% Bonds
(Port Huron Hospital Obligated Group)/(FSA INS),
7/1/1996 NR(1) 1,105,621
-------------------------------------------------------
1,000,000 Michigan State Housing Development Authority, Revenue
Bonds (Series A), 3.60% CP (Sanwa Bank Ltd., Osaka
LOC), Mandatory Tender 5/10/1996 A-1 1,000,000
-------------------------------------------------------
2,000,000 Michigan State Housing Development Authority, (Series
1990 B CR-71), 3.50% TOBs, Optional Tender 6/1/1996 NR(2) 2,000,000
-------------------------------------------------------
1,500,000 Michigan State Trunk Line, Refunding Bonds (Series B),
4.00% Bonds (FGIC INS), 11/15/1996 NR(1) 1,501,956
-------------------------------------------------------
2,000,000 Michigan State, GO UT Notes, 4.00% TRANs, 9/30/1996 SP-1+ 2,004,766
-------------------------------------------------------
1,445,000 Michigan State, Recreation Program (Series 1992), 4.85%
Bonds, 11/1/1996 NR(2) 1,452,036
-------------------------------------------------------
5,620,000 Michigan State, Strategic Fund (Series 1991) Weekly
VRDNs (AGA Gas, Inc.)/(Svenska Handelsbanken, Stockholm
LOC) P-1 5,620,000
-------------------------------------------------------
2,000,000 Michigan State, Strategic Fund Weekly VRDNs (Tesco
Engineering)/(Bank of Tokyo-Mitsubishi Ltd., LOC) VMIG1 2,000,000
-------------------------------------------------------
1,000,000 Michigan Strategic Fund, (Series 1995) Weekly VRDNs
(Rood Industries, Inc. Project)/(NBD Bank, Michigan
LOC) A-1+ 1,000,000
-------------------------------------------------------
1,100,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (Series 1991) Weekly VRDNs (Martin Luther
Memorial Home, Inc.)/(National Australia Bank, Ltd.,
Melbourne LOC) A-1 1,100,000
-------------------------------------------------------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- --------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
$4,200,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (Series 1995) Weekly VRDNs (Bear Lake Associates
Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) P-1 $ 4,200,000
-------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (Series 1995) Weekly VRDNs (Hercules Drawn Steel
Corporation Project)/(Society National Bank, Cleveland,
OH LOC) P-1 1,000,000
-------------------------------------------------------
1,050,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (Series 1995) Weekly VRDNs (RSR Project)/(Old
Kent Bank & Trust Co., Grand Rapids LOC) A-1 1,050,000
-------------------------------------------------------
6,000,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (Series 1995) Weekly VRDNs (United Waste Systems,
Inc.)/(Bank of America Illinois LOC) A-1 6,000,000
-------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue
Bonds (Series 1996) Weekly VRDNs (ACI Properties,
L.L.C. Project)/(Comerica Bank LOC) A-1 1,000,000
-------------------------------------------------------
2,000,000 Michigan Strategic Fund, Ltd. Obligations PCRs, (Series
1993) Weekly VRDNs (Allied-Signal, Inc.) A-1 2,000,000
-------------------------------------------------------
995,000 Michigan Strategic Fund, Obligation Revenue Bonds
(Series 1995) Weekly VRDNs (Rowe Thomas Company
Project)/(Comerica Bank, Detroit, MI LOC) P-1 995,000
-------------------------------------------------------
2,300,000 Michigan Strategic Fund, Obligation Revenue Bonds
(Series 1995) Weekly VRDNs (Wayne Disposal-Oakland,
Inc. Project)/(Comerica Bank, Detroit, MI LOC) A-1 2,300,000
-------------------------------------------------------
500,000 Ottawa County, MI Economic Development Corp., Limited
Obligation Revenue Bonds (Series 1995B) Weekly VRDNs
(Sunset Manor, Inc. Project)/(Old Kent Bank & Trust
Co., Grand Rapids LOC) A-1 500,000
------------------------------------------------------- -----------
Total 69,182,195
------------------------------------------------------- -----------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- --------- -----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -------------------------------------------------------------------------
VIRGIN ISLANDS--1.4%
-------------------------------------------------------
$1,000,000 Virgin Islands HFA, Single Family Mortgage Revenue
Refunding Bonds (1995 Series B), 3.50% TOBs (FGIC INS),
Mandatory Tender 11/1/1996 VMIG1 $ 1,000,000
------------------------------------------------------- -----------
TOTAL INVESTMENTS (AT AMORTIZED COST)(A) $70,182,195
------------------------------------------------------- -----------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 49.0% of the
portfolio as calculated based upon total portfolio market value.
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($70,687,291) at April 30, 1996.
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
CP -- Commercial Paper
EDA -- Economic Development Authority
EDC -- Economic Development Commission
EDRB -- Economic Development Revenue Bonds
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
HFA -- Housing Finance Authority
INS -- Insured
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue
RANs -- Revenue Anticipation Notes
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MICHIGAN MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $70,182,195
- --------------------------------------------------------------------------------
Cash 210,103
- --------------------------------------------------------------------------------
Income receivable 456,264
- --------------------------------------------------------------------------------
Deferred expenses 29,498
- -------------------------------------------------------------------------------- -----------
Total assets 70,878,060
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $161,944
- ---------------------------------------------------------------------
Accrued expenses 28,825
- --------------------------------------------------------------------- --------
Total liabilities 190,769
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 70,687,291 shares outstanding $70,687,291
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- --------------------------------------------------------------------------------
$64,406,673 / 64,406,673 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
INSTITUTIONAL SHARES:
- --------------------------------------------------------------------------------
$6,280,618 / 6,280,618 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MICHIGAN MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $926,500
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 123,792
- ------------------------------------------------------------------------
Administrative personnel and services fee 65,504
- ------------------------------------------------------------------------
Custodian fees 8,797
- ------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,121
- ------------------------------------------------------------------------
Directors'/Trustees' fees 507
- ------------------------------------------------------------------------
Auditing fees 4,258
- ------------------------------------------------------------------------
Legal fees 972
- ------------------------------------------------------------------------
Portfolio accounting fees 22,776
- ------------------------------------------------------------------------
Shareholder services fee-Institutional Service Shares 59,512
- ------------------------------------------------------------------------
Shareholder services fee-Institutional Shares 2,314
- ------------------------------------------------------------------------
Share registration costs 24,766
- ------------------------------------------------------------------------
Printing and postage 5,546
- ------------------------------------------------------------------------
Insurance premiums 2,706
- ------------------------------------------------------------------------
Miscellaneous 1,651
- ------------------------------------------------------------------------ ---------
Total expenses 336,222
- ------------------------------------------------------------------------
Waivers and reimbursements--
- ------------------------------------------------------------------------
Waiver of investment advisory fee $(123,792)
- ------------------------------------------------------------
Waiver of shareholder services fee-Institutional Service
Shares (28,566)
- ------------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares (2,314)
- ------------------------------------------------------------
Reimbursement of other operating expenses (58,584)
- ------------------------------------------------------------ ---------
Total waivers and reimbursements (213,256)
- ------------------------------------------------------------------------ ---------
Net expenses 122,966
- ------------------------------------------------------------------------------------- --------
Net investment income $803,534
- ------------------------------------------------------------------------------------- --------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MICHIGAN MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1996 1995(A)
---------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------
OPERATIONS--
- -----------------------------------------------------
Net investment income $ 803,534 $ 235,600
- ----------------------------------------------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------
Distributions from net investment income
- -----------------------------------------------------
Institutional Service Shares (772,459) (235,600)
- -----------------------------------------------------
Institutional Shares (31,075) --
- ----------------------------------------------------- ------------ ------------
Change in net assets resulting from
distributions to shareholders (803,534) (235,600)
- ----------------------------------------------------- ------------ ------------
SHARE TRANSACTIONS--
- -----------------------------------------------------
Proceeds from sale of shares 111,661,388 41,468,554
- -----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 460,415 229,562
- -----------------------------------------------------
Cost of shares redeemed (71,567,785) (11,564,843)
- ----------------------------------------------------- ------------ ------------
Change in net assets resulting from share
transactions 40,554,018 30,133,273
- ----------------------------------------------------- ------------ ------------
Change in net assets 40,554,018 30,133,273
- -----------------------------------------------------
NET ASSETS:
- -----------------------------------------------------
Beginning of period 30,133,273 --
- ----------------------------------------------------- ------------ ------------
End of period $ 70,687,291 $ 30,133,273
- ----------------------------------------------------- ------------ ------------
</TABLE>
(a) For the period from June 20, 1995 (date of initial public investment) to
October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
MICHIGAN MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
----------- -----------
1996 1995(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) 1.62% 1.35%
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 0.50%* 0.32%*
- ----------------------------------------------------------------
Net investment income 3.24%* 3.67%*
- ----------------------------------------------------------------
Expense waiver/reimbursement(c) 0.85%* 1.63%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $64,407 $30,133
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from June 20, 1995 (date of initial
public investment) to October 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MICHIGAN MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED)
APRIL 30, 1996(A)
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- -----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------
Net investment income 0.005
- -----------------------------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------------------------
Distributions from net investment income (0.005)
- ----------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ----------------------------------------------------------------- -------
TOTAL RETURN(B) 0.51%
- -----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------------
Expenses 0.38%*
- -----------------------------------------------------------------
Net investment income 3.26%*
- -----------------------------------------------------------------
Expense waiver/reimbursement(c) 1.08%*
- -----------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------
Net assets, end of period (000 omitted) $ 6,281
- -----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 2, 1996 (date of initial
public investment) to April 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements).
MICHIGAN MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Michigan Municipal Cash Trust (the
"Fund"), a non-diversified portfolio. 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
Institutional Shares. The investment objective of the Fund is current income
exempt from federal regular income tax and the personal income tax imposed by
the State of Michigan consistent with the stability of principal and liquidity.
Effective March 2, 1996 the Fund added Institutional 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.
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 over a period of five years from
the Fund's commencement date.
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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, 1996, 83%
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 from any one institution or agency
did not exceed 8.5% of total investments.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) 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.
Transactions in shares were as follows: At April 30, 1996, capital paid-in
aggregated $70,687,291.
<TABLE>
<CAPTION>
PERIOD ENDED
-------------------------------------
APRIL 30, 1996 OCTOBER 31, 1995(A)
--------------- -------------------
INSTITUTIONAL SERVICE SHARES SHARES SHARES
- ------------------------------------------------------- --------------- -------------------
<S> <C> <C>
Shares sold 103,323,266 41,468,554
- -------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 460,415 229,562
- -------------------------------------------------------
Shares redeemed (69,510,280) (11,564,843)
- ------------------------------------------------------- ------------ -----------
Net change resulting from Institutional Service share
transactions 34,273,401 30,133,273
- ------------------------------------------------------- ------------- -----------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1996(B)
-------------------
INSTITUTIONAL SHARES SHARES
- --------------------------------------------------- -------------------
<S> <C>
Shares sold 8,338,122
- ---------------------------------------------------
Shares issued to shareholders in payment of
distributions declared --
- ---------------------------------------------------
Shares redeemed (2,057,505)
- --------------------------------------------------- ----------
Net change resulting from Institutional share
transactions 6,280,617
- --------------------------------------------------- ----------
Net change resulting from share transactions 40,554,018
- --------------------------------------------------- ----------
</TABLE>
(a) For the period from June 20, 1995 (date of initial public investment) to
October 31, 1995.
(b) For the period from March 2, 1996 (date of initial public investment) to
April 30, 1996.
(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 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse 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 Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. For the period ended April 30, 1996, the Institutional Shares did not
incur a shareholder services fee. FSS may voluntarily choose to waive any
portion of its fee. FSS can modify or terminate this voluntary waiver at any
time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Trust's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $18,618 were borne initially
by Adviser. The Fund has agreed to reimburse Adviser for the organizational
expenses during the five year period following effective date. For the period
ended April 30, 1996, the Fund paid $1,034 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $70,130,000 and
$58,480,000, 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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
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, which covers the
six-month period from
November 1, 1995, through April 30, 1996. The report begins with a discussion
with the fund's portfolio manager, followed by a complete listing of the fund's
holdings and its financial statements. Financial highlights tables are provided
for the fund's Institutional Service Shares and Cash II Shares.
The fund is a convenient way to put your ready cash to work pursuing
triple-tax-free income--free from federal regular income tax, New York state
income tax, and New York City local income tax*-- through a portfolio
concentrated in high-quality, short-term New York municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course, the
fund also brings you the added benefits of daily liquidity and stability of
principal.**
During the report period, the fund paid triple tax-free dividends of $0.02 per
share for both Institutional Service Shares and Cash II Shares. The fund's total
net assets of $305.8 million were spread among New York securities that use
municipal bond financing for projects as varied as health care, housing,
community development, and transportation.
You can count on New York Municipal Cash Trust to seek the best tax-free income
opportunities for your cash investment needs. As always, we will continue to
provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1996
*Income may be subject to the federal alternative minimum tax.
**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. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q
Can you comment on the economy and the interest rate environment during the
semi-annual reporting period?
A
The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April 1996. Faced with slowing
economic growth and benign inflationary pressures, the Fed lowered the
federal funds target rate from 5.75% to 5.50% in late December 1995, and again
from 5.50% to the current 5.25% at the end of January 1996. For the December
1995 move, the Fed cited a better-than-expected inflation outlook as the impetus
behind the easing, although a sluggish manufacturing sector and lackluster
consumer spending was thought to have had an influence. In January 1996, the Fed
appeared swayed by the dampening effects of high debt loads and employment
uncertainty on consumer consumption along with sluggish export growth. Through
this period, the short-end of the government and municipal yield curves
anticipated the policy moves from the Fed, and amid signs of a weakening economy
looked forward to additional eases in the not too distant future.
February and March of 1996, however, brought about a shift in market psychology
regarding both the extent and direction of changes in monetary policy by the
Fed. Recovering from the harsh winter weather and spurred onward by lower
interest rates, the housing market and consumer spending breathed some life into
the economy, which had seemed on the verge of recession earlier in the year. The
market was then stunned in early March 1996 by the report of a 705,000 increase
in non-farm payroll jobs for February 1996--the largest increase in 12
years--which caused the yields on short-term securities to rise by as much as 25
basis points. Now confronted with a more robust economy than previously thought,
market participants have moved expectations toward a more neutral policy from
the Fed in the near term with a possible tightening, or increase in rates, later
in 1996.
Yields on short-term government securities reflected this rather volatile mood
in the markets. The yield on the three-month Treasury bill began November 1995
at 5.48%, declined to 4.89% by mid-February 1996, and ended April 1996 at 5.14%.
Correspondingly, the yield on the one-year Treasury bill began November at
5.46%, fell to 4.79% in mid-February 1996, but rose to 5.62% by the end of April
1996.
Q
How has the fund's yield responded to this interest rate environment?
A
The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to
the municipal money markets. However, because of these imbalances, the
fund's yield may experience more volatility on a weekly basis than Treasury
yields and taxable money fund yields. In general, yields on municipal money
- --------------------------------------------------------------------------------
market funds were lower over the reporting period. For the fund, the seven-day
net yield* of the Institutional Service Shares on April 30, 1996, was 3.39%,
compared to 3.51% at the beginning of the period. For the Cash II Shares, the
seven-day net yield* was 3.21% on April 30, 1996 compared to 3.33% on November
1, 1995.
Q
What was your strategy for managing the fund over the semi-annual reporting
period?
A
The fund started the reporting period with an average maturity of 63 days,
reflecting a neutral to slightly bullish outlook on short-term interest
rates. Because the supply of attractively priced fixed-rate notes and bonds
in New York was readily available, we kept the average maturity of the fund
targeted between 55 to 65 days, reflecting the value offered in the marketplace
for fixed-rate notes. At the end of the reporting period, the average maturity
was 66 days, reflecting tax-related redemptions in April 1996 as well as our
assessment of more neutral Fed policy for the balance of 1996. If fixed-rate
securities continue to offer relative value when compared to shorter-term
overnight or weekly notes, we expect to maintain this average maturity between
55 and 65 days over the near term.
Q
What is your outlook for the near future?
A
With growth of 2.3% in the first quarter of 1996, the economy appears to be
on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel
the urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness at
very high levels, there also appears to be no danger of the economy overheating
in the near term. As long as inflation remains benign, the Fed should be content
to sit on the sidelines until confronted with signs of undue strength or
considerable weakness in economic growth. The average maturity of the fund will
continue to be managed in accordance with our expectation for a stable monetary
policy in the near term. Nevertheless, opportunities for average maturity
extension will arise as the supply of fixed-rate notes in the municipal market
increases significantly in June and July of 1996. This spike in supply may
present opportunities to 'lock-in' yields which are attractive relative to
comparable maturity taxable securities. As a result, we expect the average
maturity of the fund to be slightly longer throughout the summer months.
*Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
NEW YORK MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--99.0%
- --------------------------------------------------------------------------------------
NEW YORK--95.8%
-----------------------------------------------------------------------
$ 4,525,000 Albany City School District, NY, (Series 1995), 4.75% BANs, 5/3/1996 NR (3) $ 4,525,095
-----------------------------------------------------------------------
2,500,000 Albany, NY IDA, (Series 1995) Weekly VRDNs (Davies Office Refurbishing,
Inc. Project)/(Marine Midland Bank N.A., Buffalo, NY LOC) P-2 2,500,000
-----------------------------------------------------------------------
1,000,000 Babylon, NY IDA, (1994 Series) Weekly VRDNs (J. D'Addario & Company,
Inc. Project)/(National Westminster Bank, PLC, London LOC) VMIG1 1,000,000
-----------------------------------------------------------------------
3,246,000 Beacon, NY, 4.00% BANs, 8/16/1996 NR (3) 3,246,317
-----------------------------------------------------------------------
6,000,000 Brentwood Union Free School District, NY, 4.375% TANs,
6/28/1996 NR (4) 6,002,505
-----------------------------------------------------------------------
5,000,000 Brentwood Union Free School District, NY, 4.50% TANs, 6/ 28/1996 NR (3) 5,003,046
-----------------------------------------------------------------------
3,800,000 Canisteo Central School District, NY, 4.125% BANs,
4/30/1997 NR 3,810,762
-----------------------------------------------------------------------
1,555,000 Cattaraugus County, NY IDA, (Series 1996A) Weekly VRDNs (Gier's Farm
Service, Inc. Project)/(Key Bank of New York LOC) A-1 1,555,000
-----------------------------------------------------------------------
3,300,000 Chautauqua County, NY IDA Weekly VRDNs (Cliffstar Corp.)/(Society
National Bank, Cleveland, OH LOC) P-1 3,300,000
-----------------------------------------------------------------------
3,900,000 Chautauqua County, NY IDA Weekly VRDNs (Mogen David Wine Corp.)/(Wells
Fargo Bank, N.A. LOC) P-1 3,900,000
-----------------------------------------------------------------------
5,000,000 Chautauqua County, NY, 3.60% TANs, 12/20/1996 NR 5,006,194
-----------------------------------------------------------------------
1,060,000 Colonie, NY IDA Weekly VRDNs (Herbert S. Ellis)/(Marine Midland Bank
N.A., Buffalo, NY LOC) P-2 1,060,000
-----------------------------------------------------------------------
765,000 Colonie, NY IDA, (Series 1988) Weekly VRDNs (13 Green M-1 Drive
Project)/(Marine Midland Bank N.A., Buffalo, NY LOC) P-2 765,000
-----------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
-----------------------------------------------------------------------
$ 2,220,000 Colonie, NY, (Series 1996B), 4.00% BANs, 4/18/1997 NR $ 2,225,152
-----------------------------------------------------------------------
5,000,000 Erie County, NY IDA, IDRB (Series 1994) Weekly VRDNs (Servotronics,
Inc. Project)/(Fleet Bank of New York LOC) P-1 5,000,000
-----------------------------------------------------------------------
4,500,000 Florida Union Free School District, NY, 4.125% BANs,
12/5/1996 NR 4,509,676
-----------------------------------------------------------------------
1,800,000 Franklin County, NY IDA, (Series 1991A) Weekly VRDNs (KES
Chateaugay)/(Bank of Tokyo-Mitsubishi LTD. LOC) A-1 1,800,000
-----------------------------------------------------------------------
3,263,366 Gloversville, NY, 4.25% BANs, 12/27/1996 NR 3,273,666
-----------------------------------------------------------------------
1,500,000 Guilderland, NY IDA, (Series 1993A) Weekly VRDNs (Northeastern
Industrial Park, Inc.)/(Fleet Bank of New York LOC) P-1 1,500,000
-----------------------------------------------------------------------
5,140,000 Hempstead Union Free School District, NY, 4.50% TANs,
6/28/1996 NR (3) 5,144,858
-----------------------------------------------------------------------
4,760,000 Herkimer County, NY IDA, 1994 IDRB Weekly VRDNs (Granny's
Kitchen)/(Bank of New York, New York LOC) A-1 4,760,000
-----------------------------------------------------------------------
3,500,000 Hudson Falls, NY Central School District, 3.82% BANs,
6/28/1996 NR (3) 3,500,102
-----------------------------------------------------------------------
3,700,000 Levittown Union Free School District, NY, 4.125% BANs, 10/25/1996 NR 3,702,996
-----------------------------------------------------------------------
1,000,000 Levittown Union Free School District, NY, 4.50% BANs,
10/25/1996 NR 1,002,556
-----------------------------------------------------------------------
927,000 Liverpool Central School District, NY, 3.90% BANs,
6/19/1996 NR (3) 927,178
-----------------------------------------------------------------------
3,770,000 Lockport, NY, 4.17% BANs, 5/30/1996 NR (3) 3,770,201
-----------------------------------------------------------------------
4,200,000 Longwood Central School District, NY, 4.50% TANs,
6/26/1996 NR (3) 4,202,780
-----------------------------------------------------------------------
2,005,000 Madison County, NY IDA, (Series 1989A) Weekly VRDNs (Madison, NY
Upstate Metals)/(Fleet Bank of New York LOC) A-1 2,005,000
-----------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
-----------------------------------------------------------------------
$ 15,000,000 Marine Midland, NY, Premium Tax-Exempt Bond & Loan Trust Weekly VRDNs
(Marine Midland New York Trust)/ (Marine Midland Bank N.A., Buffalo, NY
LOC) P-1 $ 15,000,000
-----------------------------------------------------------------------
250,001 New York City, NY IDA Weekly VRDNs (David Rosen Bakers Supply)/(Ford
Motor Credit Corp. LIQ)/(Chemical Bank, New York LOC) P-1 250,001
-----------------------------------------------------------------------
426,668 New York City, NY IDA Weekly VRDNs (Lomar Development Corp.)/(Ford
Motor Credit Corp. LIQ)/ (Chemical Bank, New York LOC) P-1 426,668
-----------------------------------------------------------------------
27,099 New York City, NY IDA Weekly VRDNs (MLN Associates)/ (Ford Motor Credit
Corp. LIQ)/(Chemical Bank, New York LOC) P-1 27,099
-----------------------------------------------------------------------
3,100,000 New York City, NY IDA Weekly VRDNs (Mindel Associates)/(Chemical Bank,
New York LOC) A-1 3,100,000
-----------------------------------------------------------------------
1,900,000 New York City, NY IDA, Special Facility Revenue Bonds (Series 1990)
Weekly VRDNs (Air France)/(Societe Generale, Paris LOC) A-1+ 1,900,000
-----------------------------------------------------------------------
2,865,000 New York City, NY, (Series B), 4.75% RANs (Bank of Nova Scotia,
Toronto, Canadian Imperial Bank of Commerce, Toronto, Chemical Bank,
New York, Citibank NA, New York, Commerzbank AG, Frankfurt, Morgan
Guaranty Trust Co., New York and Union Bank of Switzerland, Zurich
LOCs), 6/28/1996 MIG1 2,870,601
-----------------------------------------------------------------------
4,600,000 New York City, NY, 3.25% TOBs (FSA INS)/(Citibank NA, New York LIQ),
Optional Tender 8/15/1996 NR (1) 4,600,000
-----------------------------------------------------------------------
2,000,000 New York City, NY, UT GO Fiscal 1994 (Series H-3), 3.60% CP (FSA
INS)/(Banque Paribas, Paris LIQ), Mandatory Tender 8/22/1996 VMIG1 2,000,000
-----------------------------------------------------------------------
4,700,000 New York City, NY, UT GO Fiscal 1994 (Series H-3), 3.60% CP (FSA
INS)/(Banque Paribas, Paris LIQ), Mandatory Tender 8/23/1996 VMIG1 4,700,000
-----------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
-----------------------------------------------------------------------
$ 2,200,000 New York City, NY, UT GO Fiscal 1994 (Series H-3), 4.00% CP (FSA
INS)/(Banque Paribas, Paris LIQ), Mandatory Tender 8/22/1996 VMIG1 $ 2,200,000
-----------------------------------------------------------------------
5,475,000 (a)New York State Dormitory Authority, PA-60 (Series 1993) Weekly VRDNs
(Rochester General Hospital)/(FHA INS)/ (Merrill Lynch Capital
Services, Inc. LIQ) A-1+ 5,475,000
-----------------------------------------------------------------------
3,000,000 New York State Energy Research & Development Authority, (Series 1993A)
Weekly VRDNs (Long Island Lighting Co.)/(Toronto-Dominion Bank LOC) VMIG1 3,000,000
-----------------------------------------------------------------------
1,210,000 New York State Job Development Authority Weekly VRDNs (Sumitomo Bank
Ltd., Osaka LOC) VMIG1 1,210,000
-----------------------------------------------------------------------
1,500,000 New York State Job Development Authority Weekly VRDNs (Sumitomo Bank
Ltd., Osaka LOC) VMIG1 1,500,000
-----------------------------------------------------------------------
12,250,000 (a)New York State Medical Care Facilities Finance Agency, Tender Option
Certificate (Series 1995A) Weekly VRDNs (Monte Fiore Medical
Center)/(AMBAC INS) A-1 12,250,000
-----------------------------------------------------------------------
3,700,000 (a)New York State Mortgage Agency, (Series PA-29) Weekly VRDNs (Merrill
Lynch Capital Services, Inc. LIQ) VMIG1 3,700,000
-----------------------------------------------------------------------
4,885,000 (a)New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds
(PA-87) Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) VMIG1 4,885,000
-----------------------------------------------------------------------
3,640,000 (a)New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds
(Series PT-15B) Weekly VRDNs (Commerzbank AG, Frankfurt LIQ) VMIG1 3,640,000
-----------------------------------------------------------------------
3,510,000 New York State, UT GO, 5.00% Bonds, 1/15/1997 A 3,548,795
-----------------------------------------------------------------------
6,500,000 Niagara County, NY IDA Weekly VRDNs (Allegheny Ludlum Corp.)/(PNC Bank,
N.A. LOC) A-1 6,500,000
-----------------------------------------------------------------------
$ 5,000,000 Niagara County, NY IDA, Solid Waste Disposal Facility Revenue Bonds
(Series 1994C), 3.30% CP (American Ref-Fuel Company)/(Air Products &
Chemicals, Inc. and Browning-Ferris Industries, Inc. GTDs), Mandatory
Tender 5/20/1996 A-1 $ 5,000,000
-----------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
-----------------------------------------------------------------------
6,000,000 Niagara County, NY IDA, Solid Waste Disposal Facility Revenue Bonds
(Series 1994C), 3.50% CP (American Ref-Fuel Company)/(Air Products &
Chemicals, Inc. and Browning-Ferris Industries, Inc. GTDs), Mandatory
Tender 5/23/1996 A-1 6,000,000
-----------------------------------------------------------------------
610,000 Onondaga County, NY IDA Weekly VRDNs (Beverage Corp.)/(Marine Midland
Bank N.A., Buffalo, NY LOC) P-2 610,000
-----------------------------------------------------------------------
910,000 Onondaga County, NY IDA, (Series 1987) Weekly VRDNs (Southern Container
Corp.)/(Chemical Bank, New York LOC) VMIG1 910,000
-----------------------------------------------------------------------
1,725,000 Onondaga County, NY Weekly VRDNs (Grainger (W.W.), Inc.) A-1+ 1,725,000
-----------------------------------------------------------------------
1,500,000 Ontario, NY IDA Weekly VRDNs (Hillcrest Enterprises/ Buckeye
Corrugated)/(National City Bank, Cleveland, OH LOC) P-1 1,500,000
-----------------------------------------------------------------------
5,700,000 Oswego County, NY IDA Weekly VRDNs (Copperweld Corp.)/(Credit Lyonnais,
Paris LOC) P-1 5,700,000
-----------------------------------------------------------------------
1,525,000 Perry Central School District, NY, 4.125% BANs, 6/21/1996 NR (3) 1,525,869
-----------------------------------------------------------------------
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 A-1+ 15,000,000
-----------------------------------------------------------------------
1,000,000 Rotterdam, NY IDA, (Series 1993A) Weekly VRDNs (Rotterdam Industrial
Park)/(Fleet Bank of New York LOC) P-1 1,000,000
-----------------------------------------------------------------------
4,000,000 Saranac Central School District, NY, 4.50% BANs, 6/28/1996 NR (2) 4,003,962
-----------------------------------------------------------------------
$ 575,705 Schenectady, NY IDA Weekly VRDNs (McClellan Street Associates)/(Ford
Motor Credit Corp. LIQ)/(Chemical Bank, New York LOC) P-1 $ 575,705
-----------------------------------------------------------------------
1,700,000 Schenectady, NY IDA, IDRB (Series 1995A) Weekly VRDNs (Fortitech
Holding Corporation Project)/(Fleet Bank of New York LOC) VMIG1 1,700,000
-----------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
-----------------------------------------------------------------------
3,200,000 Southeast, NY IDA, IDRB (Series 1995) Weekly VRDNs (Dairy Conveyor
Corporation Project)/(Chemical Bank, New York LOC) A-1 3,200,000
-----------------------------------------------------------------------
2,700,000 Suffolk County, NY IDA Weekly VRDNs (C & J Realty Corp.)/(Ford Motor
Credit Corp. LIQ)/(Chemical Bank, New York LOC) P-1 2,700,000
-----------------------------------------------------------------------
454,167 Suffolk County, NY IDA Weekly VRDNs (CS Property/Tara Toy, Inc.)/(Ford
Motor Credit Corp. LIQ)/(Chemical Bank, New York LOC) P-1 454,167
-----------------------------------------------------------------------
900,000 Suffolk County, NY IDA Weekly VRDNs (Poly Research Corp.)/(Marine
Midland Bank N.A., Buffalo, NY LOC) P-2 900,000
-----------------------------------------------------------------------
1,800,000 Suffolk County, NY IDA, 5.688% TOBs (Grainger (W.W.), Inc.), Optional
Tender 6/1/1996 P-1 1,800,000
-----------------------------------------------------------------------
11,299,000 Syracuse, NY, (Series 1995), 4.00% BANs, 12/20/1996 NR (2) 11,323,952
-----------------------------------------------------------------------
3,768,000 Syracuse, NY, 3.60% BANs, 2/28/1997 NR (2) 3,774,006
-----------------------------------------------------------------------
2,200,000 Tompkins County, NY, (Series A), 4.00% BANs, 4/11/1997 NR (2) 2,206,010
-----------------------------------------------------------------------
9,000,000 Ulster County, NY, Custodial Receipt (1996 Series A), 4.25% TANs (State
Street Bank and Trust Co. LOC), 3/26/1997 P-1 9,038,779
-----------------------------------------------------------------------
5,000,000 (a)VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York City
Municipal Water Finance Authority)/(MBIA INS)/ (Hong Kong & Shanghai
Banking Corp. LIQ) A-1 5,000,000
-----------------------------------------------------------------------
3,500,000 (a)VRDC/IVRC Trust, (Series 1993G) Weekly VRDNs (St. Lukes Roosevelt
Hospital Center)/(FHA INS)/(Hong Kong & Shanghai Banking Corp. LIQ) A-1 3,500,000
-----------------------------------------------------------------------
$ 7,500,000 Walden Village, NY IDA, IDRB (Series 1994) Weekly VRDNs (Spence
Engineering Co.)/(First Union National Bank, Charlotte, N.C. LOC) P-1 $ 7,500,000
-----------------------------------------------------------------------
5,685,000 Warren & Washington Counties, NY IDA Weekly VRDNs (Sandy Hill
Corp.)/(First Union National Bank, Charlotte, N.C. LOC) A-1 5,685,000
-----------------------------------------------------------------------
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------- ----------------------------------------------------------------------- ----------- --------------
SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
-----------------------------------------------------------------------
1,415,000 Yates County, NY IDA, (Series 1992A) Weekly VRDNs (Clearplass
Container)/(Fleet Bank of New York LOC) A-1 1,415,000
-----------------------------------------------------------------------
2,300,000 Yonkers, NY IDA, (Series 1992A) Weekly VRDNs (Consumers Union
Facility)/(Industrial Bank of Japan Ltd., Tokyo LOC) VMIG1 2,300,000
----------------------------------------------------------------------- --------------
Total 292,828,698
----------------------------------------------------------------------- --------------
PUERTO RICO--3.3%
-----------------------------------------------------------------------
10,000,000 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds TOC
(Series 1995B) Weekly VRDNs (MBIA INS)/(Dai-Ichi Kangyo Bank Ltd.,
Tokyo LIQ) A-1 10,000,000
----------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $ 302,828,698
----------------------------------------------------------------------- --------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 32% of the
portfolio as calculated based upon total portfolio market value.
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
(a) Donotes 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. At the end of
the period, these securities amounted to ($38,450,000) which represents 13%
of net assets.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($305,791,844) at April 30, 1996.
The following acronym(s) are used throughout this portfolio:
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
AMBAC-- American Municipal Bond Assurance Corporation
BANs-- Bond Anticipation Notes
CP-- Commercial Paper
FHA-- Federal Housing Administration
FSA-- Financial Security Assurance
GO-- General Obligation
IDA-- Industrial Development Authority
IDRB-- Industrial Development Revenue Bond
INS-- Insured
LIQ-- Liquidity Agreement
LOCs-- Letter(s) of Credit
LOC-- Letter of Credit
MBIA-- Municipal Bond Investors Assurance
PLC-- Public Limited Company
RANs-- Revenue Anticipation Notes
TANs-- Tax Anticipation Notes
TOBs-- Tender Option Bonds
UT-- Unlimited Tax
VRDNs-- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 302,828,727
- -------------------------------------------------------------------------------------------------
Cash 336,262
- -------------------------------------------------------------------------------------------------
Income receivable 3,567,145
- ------------------------------------------------------------------------------------------------- --------------
Total assets 306,732,134
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable $ 829,582
- -------------------------------------------------------------------------------------
Accrued expenses 110,708
- ------------------------------------------------------------------------------------- ----------
Total liabilities 940,290
- ------------------------------------------------------------------------------------------------- --------------
Net Assets for 305,791,844 shares outstanding $ 305,791,844
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------
Paid in capital $ 305,791,844
- ------------------------------------------------------------------------------------------------- --------------
Total Net Assets $ 305,791,844
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- -------------------------------------------------------------------------------------------------
$282,892,885 / 282,892,885 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
CASH II SHARES:
- -------------------------------------------------------------------------------------------------
$22,898,959 / 22,898,959 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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------------------------
Interest $ 6,122,990
- -----------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------
Investment advisory fee $ 647,914
- ----------------------------------------------------------------------------------------
Administrative personnel and services fee 122,480
- ----------------------------------------------------------------------------------------
Custodian fees 24,157
- ----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 37,424
- ----------------------------------------------------------------------------------------
Directors'/Trustees' fees 5,028
- ----------------------------------------------------------------------------------------
Auditing fees 8,906
- ----------------------------------------------------------------------------------------
Legal fees 613
- ----------------------------------------------------------------------------------------
Portfolio accounting fees 57,007
- ----------------------------------------------------------------------------------------
Distribution services fee--Institutional Service Shares 375,471
- ----------------------------------------------------------------------------------------
Distribution services fee--Cash II Shares 29,475
- ----------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 375,919
- ----------------------------------------------------------------------------------------
Shareholder services fee--Cash II Shares 29,475
- ----------------------------------------------------------------------------------------
Share registration costs 18,265
- ----------------------------------------------------------------------------------------
Printing and postage 17,961
- ----------------------------------------------------------------------------------------
Insurance premiums 4,371
- ----------------------------------------------------------------------------------------
Miscellaneous 1,644
- ---------------------------------------------------------------------------------------- -----------
Total expenses 1,756,110
- ----------------------------------------------------------------------------------------
Waivers
- ----------------------------------------------------------------------------------------
Waiver of investment advisory fee $ (200,670)
- ----------------------------------------------------------------------------
Waiver of distribution services fee--Institutional Service Shares (375,471)
- ----------------------------------------------------------------------------
Waiver of distribution services fee--Cash II Shares (29,475)
- ----------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Service Shares (269,983)
- ---------------------------------------------------------------------------- ----------
Total waivers (875,599)
- ---------------------------------------------------------------------------------------- -----------
Net expenses 880,511
- ----------------------------------------------------------------------------------------------------- -----------
Net investment income 5,242,479
- ----------------------------------------------------------------------------------------------------- -----------
Net realized gain on investments 5,609
- ----------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 5,248,088
- ----------------------------------------------------------------------------------------------------- -----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
<S> <C> <C>
- --------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------------
Net investment income $ 5,242,479 $ 11,498,874
- --------------------------------------------------------------------
Net realized gain (loss) on investments 5,609 12,000
- -------------------------------------------------------------------- ---------------------- --------------------
Change in net assets resulting from operations 5,248,088 11,510,874
- -------------------------------------------------------------------- ---------------------- --------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------------
Distributions from net investment income
- --------------------------------------------------------------------
Institutional Service Shares (4,876,748) (9,657,797)
- --------------------------------------------------------------------
Cash II Shares (365,731) (1,841,077)
- -------------------------------------------------------------------- ---------------------- --------------------
Change in net assets resulting from distributions to
shareholders (5,242,479) (11,498,874)
- -------------------------------------------------------------------- ---------------------- --------------------
SHARE TRANSACTIONS--
- --------------------------------------------------------------------
Proceeds from sale of Shares 603,215,545 1,236,075,244
- --------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 1,011,236 3,314,165
- --------------------------------------------------------------------
Cost of Shares redeemed (589,028,530) (1,319,444,545)
- -------------------------------------------------------------------- ---------------------- --------------------
Change in net assets resulting from share transactions 15,198,251 (80,055,136)
- -------------------------------------------------------------------- ---------------------- --------------------
Change in net assets 15,203,860 (80,043,136)
- --------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------
Beginning of period 290,587,984 370,631,120
- -------------------------------------------------------------------- ---------------------- --------------------
End of period $ 305,791,844 $ 290,587,984
- -------------------------------------------------------------------- ---------------------- --------------------
</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
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1996 1995 1994 1993 1992 1991 1990 1989
<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 0.04 0.02 0.02 0.03 0.04 0.05 0.06
- ---------------------------------
LESS DISTRIBUTIONS
- ---------------------------------
Distributions from net
investment income (0.02) (0.04) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06)
- --------------------------------- ----- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------- ----- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (A) 1.63% 3.56% 2.35% 2.16% 3.01% 4.59% 5.51% 5.70%
- ---------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------
Expenses 0.53%* 0.54% 0.52% 0.54% 0.57% 0.52% 0.54% 0.55%
- ---------------------------------
Net investment income 3.25%* 3.49% 2.31% 2.14% 2.99% 4.48% 5.36% 5.56%
- ---------------------------------
Expense waiver/reimbursement (b) 0.55%* 0.53% 0.13% 0.17% -- -- -- --
- ---------------------------------
SUPPLEMENTAL DATA
- ---------------------------------
Net assets, end of period (000
omitted) $282,893 $276,149 $236,580 $274,357 $164,492 $191,616 $197,213 $245,542
- ---------------------------------
<CAPTION>
1988 1987
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00
- ---------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income 0.05 0.04
- ---------------------------------
LESS DISTRIBUTIONS
- ---------------------------------
Distributions from net
investment income (0.05) (0.04)
- --------------------------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- --------------------------------- --------- ---------
TOTAL RETURN (A) 4.66% 3.90%
- ---------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------
Expenses 0.51% 0.47%*
- ---------------------------------
Net investment income 4.57% 3.81%*
- ---------------------------------
Expense waiver/reimbursement (b) -- --
- ---------------------------------
SUPPLEMENTAL DATA
- ---------------------------------
Net assets, end of period (000
omitted) $212,786 $141,040
- ---------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge, or
contingent deferred sales charge, if applicable.
(b) 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--CASH II SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1996 1995 1994 1993** 1992 1991(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 0.02 0.03 0.02
- -----------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions from net
investment income (0.02) (0.03) (0.02) (0.02) (0.03) (0.02)
- ----------------------------------------- ------- --------- --------- ----------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------- ------- --------- --------- ----------- --------- -----------
TOTAL RETURN (B) 1.54% 3.37% 2.15% 1.98% 2.86% 2.20%
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.71%* 0.71% 0.71% 0.71% 0.73% 0.46%*
- -----------------------------------------
Net investment income 3.10%* 3.20% 2.19% 1.96% 2.46% 4.08%*
- -----------------------------------------
Expense waiver/
reimbursement (c) 0.37%* 0.36% 0.21% 0.17% -- --
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $22,899 $14,439 $134,051 $58,884 $4,641 $56
- -----------------------------------------
</TABLE>
* Computed on an annualized basis.
** Prior to November 9, 1992, the Fund provided three classes of shares.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NEW YORK MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of New York Municipal Cash Trust (the
"Fund"), a non-diversified portfolio. 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
Cash II Shares.
The investment objective of the Fund is current income exempt from federal
regular income tax and the personal income taxes imposed by New York State and
New York municipalities consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At last fiscal year-end date, the Fund, for federal tax purposes, had a
capital loss carryforward of $5,609, 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 as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
<S> <C>
1996 $5,609
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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, 1996, 56%
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 from any one institution or agency
did not exceed 5.0% 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 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, 1996
is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
New York State Dormitory Authority PA-60 (Series 1993) March 13, 1995 $ 5,475,000
New York State State Medical Care Facilities
Finance Agency January 3, 1996 12,250,000
New York State Mortgage Agency (Series PA-29) April 3, 1995 3,700,000
New York State Mortgage Agency (Series PA-87) July 5, 1995 4,885,000
New York State Mortgage Agency (Series PT-15B) July 5, 1995 3,640,000
VRDC/IVRC Trust (Series 1992A) New York City Municipal Water Finance
Authority July 5, 1995 5,000,000
VRDC/IVRC Trust (Series 1993G) St. Lukes Roosevelt Hospital Center April 22, 1996 3,500,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
NEW YORK 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) for each
class of shares. At April 30, 1996, capital paid-in aggregated $305,791,844.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------------- --------------------
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
- -------------------------------------------------------------------- ---------------------- --------------------
Shares sold 516,686,256 1,002,966,036
- --------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 756,172 1,484,402
- --------------------------------------------------------------------
Shares redeemed (510,705,060) (964,892,684)
- -------------------------------------------------------------------- ---------------------- --------------------
Net change resulting from Institutional Service Share transactions 6,737,368 39,557,754
- -------------------------------------------------------------------- ---------------------- --------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------------- --------------------
CASH II SHARES SHARES SHARES
<S> <C> <C>
- -------------------------------------------------------------------- ---------------------- --------------------
Shares sold 86,529,289 233,109,208
- --------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 255,064 1,829,763
- --------------------------------------------------------------------
Shares redeemed (78,323,470) (354,551,861)
- -------------------------------------------------------------------- ---------------------- --------------------
Net change resulting from Cash II share transactions 8,460,883 (119,612,890)
- -------------------------------------------------------------------- ---------------------- --------------------
Net change resulting from share transactions 15,198,251 (80,055,136)
- -------------------------------------------------------------------- ---------------------- --------------------
</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 0.40% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse 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.
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp., the principal distributor, from the net
assets of the Fund to finance activities intended to result in the sale of the
Fund's Institutional Service Shares and Cash II Shares. The Plan provides that
the Fund may incur distribution expenses according to the following schedule
annually, to compensate Federated Securities Corp.
<TABLE>
<CAPTION>
% OF AVG. DAILY NET
SHARE CLASS NAME ASSETS OF CLASS
<S> <C>
Institutional Service Shares 0.25%
Cash II Shares 0.25%
</TABLE>
The distributor may voluntarily choose to waive any portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at its
sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of daily average net assets of the Fund shares for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the period ended April 30, 1996, the Fund engaged
in purchase and sale transactions with funds that have a common investment
adviser (or affiliated investment advisers), common Directors/Trustees, and/or
common Officers. These purchase and sale transactions were made at current
market value pursuant to Rule 17a-7 under the Act amounting to $239,430,000 and
$234,380,000, respectively.
NEW YORK MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
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, 1996
- -----------------------------------------------------------------------------
[LOGO OF FEDERATED INVESTORS]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and a subsidiary of Federated Investors.
Cusip 314229741
Cusip 314229773
8060106 (6/96) [RECYCLED LOGO]
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, which covers
the six-month period from November 1, 1995 through April 30, 1996. The report
begins with a discussion with the fund's portfolio manager, followed by a
complete listing of the fund's holdings and its financial statements.
Financial highlights tables are provided for the fund's Institutional Shares
and Institutional Service Shares.
The fund is a convenient way to put your ready cash to work pursuing double-
tax-free income - free from federal regular income tax and Virginia personal
income tax* - through a portfolio concentrated in high-quality, short-term
Virginia municipal securities.
As a shareholder, you have the opportunity to earn a greater after-tax yield
than you could in a comparable high-quality taxable investment. Of course,
the fund also brings you the added benefits of daily liquidity and stability
of principal.**
During the report period, the fund paid double-tax-free dividends of $0.02
per share for both Institutional Shares and Institutional Service Shares. The
fund's total net assets of $125.4 million were spread among Virginia
securities that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
You can count on Virginia Municipal Cash Trust to seek the best tax-free
income opportunities for your cash investment needs. As always, we will
strive to provide you with the highest level of professional service. We
invite your questions or comments.
Sincerely,
Glen R. Johnson
President
June 15, 1996
* Income may be subject to the federal alternative minimum tax.
** 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.
An investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
An Interview with Fund Portfolio Manager, Jeff A. Kozemchak, C.F.A.
Q Can you comment on the economy and the interest rate environment during
the semi-annual reporting period?
A The Federal Reserve Board (the "Fed") eased monetary policy twice over the
six-month reporting period ending in April 1996. Faced with slowing economic
growth and benign inflationary pressures, the Fed lowered the federal funds
target rate from 5.75% to 5.50% in late December 1995, and again from 5.50%
to the current 5.25% at the end of January 1996. For the December 1995 move,
the Fed cited a better-than-expected inflation outlook as the impetus behind
the easing, although a sluggish manufacturing sector and lackluster consumer
spending was thought to have had an influence. In January 1996, the Fed
appeared swayed by the dampening effects of high debt loads and employment
uncertainty on consumer consumption along with sluggish export growth.
Through this period, the short-end of the government and municipal yield
curves anticipated the policy moves from the Fed, and amid signs of a
weakening economy looked forward to additional eases in the not too distant
future.
February and March of 1996, however, brought about a shift in market
psychology regarding both the extent and direction of changes in monetary
policy by the Fed. Recovering from the harsh winter weather and spurred
onward by lower interest rates, the housing market and consumer spending
breathed some life into the economy, which had seemed on the verge of
recession earlier in the year. The market was then stunned in early March
1996 by the report of a 705,000 increase in non-farm payroll jobs for
February 1996-the largest increase in 12 years-which caused the yields on short-
term securities to rise by as much as 25 basis points. Now confronted with a
more robust economy than previously thought, market participants have moved
expectations toward a more neutral policy from the Fed in the near term with
a possible tightening, or increase in rates, later in 1996.
Yields on short-term government securities reflected this rather volatile
mood in the markets. The yield on the three-month Treasury bill began
November 1995 at 5.48%, declined to 4.89% by mid-February 1996, and ended
April 1996 at 5.14%. Correspondingly, the yield on the one-year Treasury bill
began November 1995 at 5.46%, fell to 4.79% in mid-February 1996, but rose to
5.62% by the end of April 1996.
Q How has the fund's yield responded to this interest rate environment?
A The fund's yield was affected by Fed policy (interest rate cuts), changes
in market expectations, as well as supply and demand imbalances unique to the
municipal money markets. However, because of these imbalances, the fund's
yield may experience more volatility on a weekly basis than Treasury yields
and taxable money fund yields. In general, yields on municipal money market
funds were lower over the reporting period. For the fund, the seven-day net
yield* of the Institutional Shares on April 30, 1996 was 3.37% compared to
3.51% six months earlier. For the Institutional Service Shares, the seven-day
net yield* was 3.27% on April 30, 1996 compared to 3.41% six months earlier.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
Q What was your strategy for managing the fund over the semi-annual
reporting period?
A The fund started the reporting period with an average maturity of 48 days,
reflecting a neutral to slightly bullish outlook on short-term interest
rates. Because the supply of eligible fixed-rate notes and bonds in Virginia
was moderately low over the reporting period, we targeted the average
maturity between 45 and 55 days. At the end of the reporting period, the
average maturity was 46 days, reflecting our assessment of more neutral Fed
policy for the balance of 1996. If fixed-rate securities offer relative value
when compared to shorter-term overnight or weekly notes, we expect to
maintain this average maturity between 45 and 55 days.
Q What is your outlook for the near future?
A With growth of 2.3% in the first quarter of 1996, the economy appears to
be on firmer footing than it was in the fourth quarter of 1995, when gross
domestic product grew at only 0.5%. As a result, the Fed should not feel the
urgency to lower short-term rates further. By the same token, however, with
areas of softness in the economy still evident and with consumer indebtedness
at very high levels, there also appears to be no danger of the economy
overheating in the near term. As long as inflation remains benign, the Fed
should be content to sit on the sidelines until confronted with signs of
undue strength or considerable weakness in economic growth. The average
maturity of the fund will continue to be managed in accordance with our
expectation for a stable monetary policy in the near term. Nevertheless,
opportunities for average maturity extension will arise as the supply of
fixed-rate notes in the municipal market increases significantly in June and
July of 1996. This spike in supply may present opportunities to "lock-in"
yields which are attractive relative to comparable maturity taxable
securities. As a result, we expect the average maturity of the fund to be
slightly longer throughout the summer months.
VIRGINIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-99.0%
VIRGINIA-96.6%
$ 1,000,000 Alexandria, VA IDA Weekly VRDNs (American Red
Cross)/(Sanwa Bank Ltd, Osaka LOC) A-1 $ 1,000,000
3,500,000 Alexandria, VA Redevelopment and Housing Authority
Weekly VRDNs (Crystal City Apartments)/(Safeco
Insurance Co. of America INS)/(Sumitomo Bank Ltd.,
Osaka LIQ) A-1 3,500,000
1,500,000 Alexandria, VA Redevelopment and Housing Authority,
Series 1996B Weekly VRDNs (Buckingham Village
Apartments)/(First Union National Bank, Charlotte,
N.C. LOC) A-1 1,500,000
2,200,000 Amelia County, VA IDA, (Series 1991) Weekly VRDNs
(Chambers Waste System)/(Nationsbank, N.A.
(North Carolina) LOC) VMIG1 2,200,000
3,200,000 Botetourt County, VA IDA, IDRB (Series 1995) Weekly
VRDNs (Emkay Holdings, L.L.C. Project)/(State Street
Bank and Trust Co. LOC) VMIG1 3,200,000
2,250,000 Carroll County, VA IDA, IDRB (Series 1995) Weekly
VRDNs (Kentucky Derby Hosiery Co, Inc Project)/
(Liberty National Bank & Trust Co. LOC) A-1+ 2,250,000
1,000,000 Charles County, VA IDA, Solid Waste Disposal Facility
Revenue Bonds (Series 1996) Weekly VRDNs
(Chambers Development of Virginia, Inc. Project)/
(Morgan Guaranty Trust Co., New York LOC) AAA 1,000,000
1,900,000 Chesapeake, VA IDA, (Series 1986) Weekly VRDNs
(Volvo)/(Union Bank of Switzerland, Zurich LOC) P-1 1,900,000
2,000,000 Chesapeake, VA IDA, IDRB (Series 1988) Weekly
VRDNs (Sumitomo Machinery Corp. of America
Corp.)/(Sumitomo Bank Ltd., Osaka LOC) VMIG1 2,000,000
3,600,000 Chesterfield County, VA IDA, 3.30% CP (Virginia
Electric Power Co.), Mandatory Tender 5/13/1996 A-1 3,600,000
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
VIRGINIA-CONTINUED
$ 1,535,000 Chesterfield County, VA, UT GO, 7.25% Bonds
(United States Treasury PRF), 7/15/1996 (@102) AAA $ 1,577,058
1,609,500 Dinwiddie County, VA IDA, IDRB (Series 1989) Weekly
VRDNs (Tindall Concrete VA, Inc.)/(First Union
National Bank, Charlotte, NC LOC) P-1 1,609,500
3,515,000 Dinwiddie County, VA IDA, IDRB (Series 1991) Weekly
VRDNs (Maclin-Zimmer-Mcgill Tobacco Co., Inc.)/
(Wachovia Bank of NC, NA, Winston-Salem LOC) P-1 3,515,000
3,500,000 Fairfax County, VA IDA, (Series 1993B), 3.25% CP
(Inova Health System), Mandatory Tender 5/8/1996 A-1+ 3,500,000
4,000,000 Fairfax County, VA IDA, (Series 1993B), 3.75% CP
(Inova Health System), Mandatory Tender 5/29/1996 A-1+ 4,000,000
1,250,000 Fairfax County, VA, UT GO Refunding Bonds (Series B),
6.60% Bonds (United States Treasury PRF), 11/1/1996
(@101) Aaa 1,279,450
6,100,000 Falls Church, VA IDA, (Series 1985), 3.70% TOBs (Kaiser
Permanente Medical Care Program), Optional Tender
5/1/1996 A-1+ 6,100,000
600,000 Fauquier County, VA IDA, Refunding Revenue Bonds
Weekly VRDNs (Warrenton Development Co.)/
(Nationsbank of Maryland, N.A. LOC) P-1 600,000
7,113,000 Fluvanna County, VA IDA, (Series 1986) Weekly VRDNs
(Thomasville Furniture Industries)/(Union Bank of
Switzerland, Zurich LOC) P-1 7,113,000
1,070,000 Grayson County, VA IDA, (Series 1987) Weekly VRDNs
(Robertshaw Controls Company Project)/(Nationsbank
of Virginia, N.A. LOC) P-1 1,070,000
7,500,000 Halifax, VA IDA, MMMs, PCR, 3.55% CP (Virginia
Electric Power Co.), Mandatory Tender 6/14/1996 A-1 7,500,000
4,000,000 Halifax, VA IDA, MMMs, PCR, 3.85% CP (Virginia
Electric Power Co.), Mandatory Tender 7/25/1996 A-1 4,000,000
1,000,000 Hanover County, VA IDA Weekly VRDNs (Fiber-Lam,
Inc. Project)/(Nationsbank of Virginia, N.A. LOC) A-1 1,000,000
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
VIRGINIA-CONTINUED
$ 2,582,000 Harrisonburg, VA Redevelopment & Housing
Authority, (1989 Series) Weekly VRDNs (Potomac
Hills Apartments Project)/(Nationsbank of Virginia,
N.A. LOC) P-1 $ 2,582,000
2,000,000 Lynchburg, VA, 3.15% BANs, 3/1/1997 SP-1+ 2,000,797
2,495,000 Norfolk, VA, 7.10% Bonds (United States Treasury PRF),
6/1/1996 (@102) Aaa 2,551,628
4,015,000 Prince William County, VA, (Series C), 3.60% Bonds,
8/1/1996 AA 4,015,172
1,500,000 Pulaski County, VA IDA, (Series 1995) Weekly VRDNs
(Balogh Real Estate Ltd. Partnership Mar-Bal Inc.
Project)/(Bank One, Cleveland, N.A. LOC) P-1 1,500,000
965,000 Richmond, VA IDA, Industrial Development Revenue
Refunding Bonds (Series 1987-B), 3.50% TOBs (Crow-
Klein-Macfarlane Project)/(First Union National Bank
of Virginia LOC), Optional Tender 5/15/1996 P-1 965,000
1,000,000 Richmond, VA Redevelopment & Housing Authority,
(Series B-1) Weekly VRDNs (Richmond, VA Red
Tabacco Row)/(Westdeutsche Landesbank
Girozentrale LOC) VMIG1 1,000,000
7,500,000 Richmond, VA, (Series 1996A), 4.00% RANs, 6/28/1996 SP-1+ 7,508,211
1,000,000 Richmond, VA, 6.00% Bonds (United States Treasury
PRF), 7/15/1996 (@100.5) Aaa 1,009,990
2,900,000 South Hill, VA IDA, IDRB (Series 1987) Weekly VRDNs
(South Hill Veneers, Inc Project)/(Bank One, Columbus,
N.A. LOC) P-1 2,900,000
675,000 Stafford County, VA, Water & Sewer System Revenue
Bonds (Series 1996), 3.80% Bonds (FGIC INS), 7/1/1996 Aaa 675,529
5,000,000 Suffolk, VA Redevelopment & Housing Authority,
Multifamily Housing Revenue Bonds (Series 1995A),
4.00% TOBs (Prince William Commons Seniors
Apartments)/(United States Treasury COL), Mandatory
Tender 5/30/1996 NR (1) 5,000,000
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
VIRGINIA-CONTINUED
$ 2,460,000 Tazewell County, VA IDA, (Series 1993) Weekly VRDNs
(Seville Properties Bluefield)/(Huntington National Bank,
Columbus, OH LOC) P-1 $ 2,460,000
1,840,000 Virginia Education Loan Authority, (Series E), 5.00%
Bonds, 9/1/1996 Aaa 1,846,999
2,200,000 Virginia Peninsula Port Authority, Coal Terminal
Revenue Refunding Bonds (Series 1987A), 3.40% CP
(Dominion Terminal Associates)/(National
Westminster Bank, PLC, London LOC), Mandatory
Tender 5/28/1996 VMIG1 2,200,000
5,500,000 Virginia Peninsula Port Authority, Facility Revenue
Refunding Bonds (Series 1992), 3.55% CP (CSX Corp.)/
(Bank of Nova Scotia, Toronto LOC), Mandatory
Tender 7/18/1996 A-1+ 5,500,000
4,944,000 Virginia Peninsula Port Authority, IDRB (Series 1986)
Weekly VRDNs (Eeco Project)/(Nationsbank of
Virginia, N.A. LOC) P-1 4,944,000
1,060,000 Virginia State Public School Authority, Series A, 6.85%
Bonds (United States Treasury PRF), 1/1/1997 (@102) Aaa 1,102,482
1,507,000 Williamsburg, VA IDA, (Series 1988) Weekly VRDNs
(Colonial Williamsburg Foundation Museum)/(Sanwa
Bank Ltd, Osaka LOC) P-1 1,507,000
1,575,000 Winchester, VA IDA, (Series 1995) Weekly VRDNs
(Midwesco Filter Resources, Inc. Project)/(Harris Trust
& Savings Bank, Chicago LOC) A-1+ 1,575,000
3,300,000 Winchester, VA IDA, Hospital Revenue Bonds, 4.05%
Bonds (Winchester Medical Center, Inc.)/(AMBAC INS),
1/1/1997 Aaa 3,313,876
Total 121,171,692
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM MUNICIPALS-CONTINUED
VIRGIN ISLANDS-2.4%
$ 3,000,000 Virgin Islands HFA, Single Family Mortgage Revenue
Refunding Bonds (1995 Series B), 3.50% TOBs
(FGIC INS), Mandatory Tender 11/1/1996 VMIG1 $ 3,000,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(A) $ 124,171,692
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 51.2% of the
portfolio as calculated based upon total market value.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net
assets ($125,377,365) at April 30, 1996.
The following acronyms are used throughout this portfolio:
AMBAC - American Municipal Bond Assurance Corporation
BANs - Bond Anticipation Notes
COL - Collateralized
CP - Commercial Paper
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IDRB - Industrial Development Revenue Bond
INS - Insured
LIQ - Liquidity Agreement
LOC - Letter of Credit
MMMs - Money Market Municipals
PCR - Pollution Control Revenue
PLC - Public Limited Company
PRF - Prerefunded
RANs - Revenue Anticipation Notes
TOBs - Tender Option Bonds
UT - Unlimited Tax
VRDNs - Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
Statement of Assets and Liabilities
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 124,171,692
Cash 593,248
Income receivable 899,458
Deferred expenses 17,555
Total assets 125,681,953
LIABILITIES:
Income distribution payable $ 300,441
Accrued expenses 4,147
Total liabilities 304,588
Net Assets for 125,377,365 shares outstanding $ 125,377,365
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$19,626,761 / 19,626,761 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$105,750,604 / 105,750,604 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <>C> <C>
INVESTMENT INCOME:
Interest $ 2,877,542
EXPENSES:
Investment advisory fee $ 306,719
Administrative personnel and services fee 77,253
Custodian fees 12,141
Transfer and dividend disbursing agent fees and expenses 18,534
Directors'/Trustees' fees 982
Auditing fees 8,586
Legal fees 1,360
Portfolio accounting fees 31,028
Shareholder services fee-Institutional Shares 27,262
Shareholder services fee-Institutional Service Shares 164,437
Share registration costs 18,008
Printing and postage 8,906
Insurance premiums 3,004
Miscellaneous 5,246
Total expenses 683,466
Waivers-
Waiver of investment advisory fee $ (112,663)
Waiver of shareholder services fee-Institutional Shares (27,262)
Waiver of shareholder services fee-Institutional
Service Shares (98,662)
Total waivers (238,587)
Net expenses 444,879
Net investment income $ 2,432,663
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS-
Net investment income $ 2,432,663 $ 4,384,563
DISTRIBUTIONS TO SHAREHOLDERS-
Distributions from net investment income
Institutional Shares (355,968) (834,541)
Institutional Service Shares (2,076,695) (3,550,022)
Change in net assets resulting from distributions
to shareholders (2,432,663) (4,384,563)
SHARE TRANSACTIONS-
Proceeds from sale of shares 538,441,141 1,020,240,888
Net asset value of shares issued to shareholders in payment of
distributions declared 1,462,722 2,822,568
Cost of shares redeemed (564,250,909) (993,783,278)
Change in net assets resulting from share transactions (24,347,046) 29,280,178
Change in net assets (24,347,046) 29,280,178
NET ASSETS:
Beginning of period 149,724,411 120,444,233
End of period $ 125,377,365 $ 149,724,411
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1996 1995 1994 1993(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.04 0.03 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.04) (0.03) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.63% 3.56% 2.57% 0.35%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.49%* 0.49% 0.33% 0.09%*
Net investment income 3.26%* 3.50% 2.56% 2.68%*
Expense waiver/reimbursement(c) 0.40%* 0.42% 0.37% 1.04%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $19,627 $22,642 $20,360 $7,210
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS - INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
(unaudited)
April 30, Year Ended October 31,
1996 1995 1994 1993(a)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.02 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.02) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.58% 3.46% 2.44% 0.34%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.59%* 0.59% 0.40% 0.19%*
Net investment income 3.16%* 3.38% 2.42% 2.67%*
Expense waiver/reimbursement(c) 0.30%* 0.32% 0.37% 1.04%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $105,751 $127,083 $100,084 $45,648
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
VIRGINIA MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (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 fifteen portfolios. The financial
statements included herein are only those of Virginia Municipal Cash Trust
(the "Fund"), a non-diversified portfolio. 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.
The investment objective of the Fund is current income exempt from federal
regular income tax and the income tax imposed by the Commonwealth of Virginia
consistent with stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS - The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under
the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS - Interest income and
expenses are accrued daily. Bond premium and discount, if applicable,
are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-
dividend date.
FEDERAL TAXES - It is the Fund's policy to comply with the provisions
of the Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of its income.
Accordingly, no provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS - The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-
issued securities on the trade date and maintains security positions
such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
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 over a period of five
years from the Fund's commencement 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, 1996, 64.5% 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
10.0% of total investments.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER - Investment transactions are accounted for on the trade date.
3. 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, 1996, capital paid-in aggregated
$125,377,365. Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
<S> <C> <C>
Institutional Shares 1996 1995
Shares sold 52,562,348 87,290,291
Shares issued to shareholders in payment of distributions declared 3,523 15,666
Shares redeemed (55,580,939) (85,024,334)
Net change resulting from Institutional Share transactions (3,015,068) 2,281,623
<CAPTION>
Six Months Year
Ended Ended
April 30, October 31,
<S> <C> <C>
Institutional Service Shares 1996 1995
Shares sold 485,878,793 932,950,597
Shares issued to shareholders in payment of distributions declared 1,459,199 2,806,902
Shares redeemed (508,669,970) (908,758,944)
Net change resulting from Institutional Service Share transactions (21,331,978) 26,998,555
Net change resulting from Fund share transactions (24,347,046) 29,280,178
</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 the Fund's average daily net
assets.
The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time
at its sole discretion.
ADMINISTRATIVE FEE - Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with
administrative personnel and services. The fee paid to FServ is based
on the level of average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors for the period. The
administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE - Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will
pay FSS up to 0.25% of daily average net assets of the Fund for the
period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive any portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES - FServ,
through its subsidiary, Federated Shareholder Services Company serves
as transfer and dividend disbursing agent for the Fund. The fee paid
to FServ is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES - FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
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 effective date. For the period ended April 30, 1996, the
Fund paid $3,349 pursuant to this agreement.
INTERFUND TRANSACTIONS - During the period ended April 30, 1996, the
Fund engaged in purchase and sale transactions with funds that have a
common investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7
under the Act amounting to $132,355,000 and $177,640,000,
respectively.
GENERAL - Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
<S> <S>
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. Executive Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
VIRGINIA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1996
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 314229816
Cusip 314229824
G00133-01 (6/96)
