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, 1996,
through April 30, 1997. 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 keep your ready cash pursuing double
tax-free income -- free from federal regular income tax and
Connecticut Dividend and Interest Income tax* -- through a portfolio
concentrated in high-quality, short-term Connecticut municipal
securities. At the end of the reporting period, the fund's holdings
were diversified among issuers that use municipal bond financing for
projects as varied as health care, housing, community development, and
transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
of $0.01 per share. The fund's net assets stood at $235.2 million at
the end of the reporting period.
Thank you for relying on Connecticut Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Mike Sirianni, Assistant
Vice President, Federated Management
Q Can you comment on the economy and the interest rate environment
over the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
Q
What were your strategies for the fund during the reporting period?
A The fund's average maturity at the beginning of the reporting period
was approximately 60 days. As signs of strength in the economy became
more apparent, and as expectation of an imminent Fed tightening grew
in the first quarter of 1997, we lowered the average maturity target
range of the fund from between 55 and 60 days to between 40 and 45
days. By allowing the average maturity of the portfolio to roll inward
from 60 days to a target range of 40 to 45 days we were able to take
advantage of higher interest rates going forward.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month fixed rate
notes. This portfolio structure continues to pursue a competitive
yield over time.
Q
How has the fund performed?
A Naturally, the fund's yield has remained relatively stable over the
majority of the reporting period since the Fed did not change their
federal funds rate target until the latter part of the reporting
period. The seven-day net yield for the fund on April 30, 1997, was
3.41% compared to 2.93% six months ago with the increase in yield
coming at the end of the reporting period.* The latest yield was the
equivalent of a 5.65% taxable yield for investors in the highest
federal tax bracket.
Q
Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as July.
It is also anticipated that the overall tightening cycle will not be
long in terms of magnitude or duration. The pre-emptive move by the
Fed should help to preclude the need for more aggressive action down
the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and annualized.
CONNECTICUT MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- 99.3%
CONNECTICUT -- 85.5%
<C> <S>
<C>
$ 2,000,000 Brookfield, CT, 3.73% BANs,
6/12/1997 $ 2,000,066
3,000,000 Cheshire, CT, 3.64% BANs,
8/8/1997 3,000,294
10,694,376 (b)Clipper Connecticut Tax Exempt Trust, (Series 1994-1) Weekly VRDNs
(State Street Bank and Trust Co.
LIQ) 10,694,376
2,400,000 Connecticut Development Authority Weekly VRDNs (Banta
Associates)/(Marine Midland Bank N.A., Buffalo, NY
LOC) 2,400,000
600,000 Connecticut Development Authority Weekly VRDNs (Capital District
Energy Center)/(Canadian Imperial Bank of Commerce, Toronto
LOC) 600,000
3,800,000 Connecticut Development Authority Weekly VRDNs (Capital District
Energy Center)/(Canadian Imperial Bank of Commerce, Toronto
LOC) 3,800,000
1,245,800 Connecticut Development Authority Weekly VRDNs (RSA Corp.)/
(Barclays Bank PLC, London
LOC) 1,245,800
930,000 Connecticut Development Authority, (Series 1985) Weekly VRDNs
(Martin-Brower Company Project)/(ABN AMRO Bank N.V.,
Amsterdam
LOC) 930,000
2,200,000 Connecticut Development Authority, (Series 1986) Weekly VRDNs
(United Illuminating Co.)/(Union Bank of Switzerland, Zurich
LOC) 2,200,000
8,000,000 Connecticut Development Authority, (Series 1993) Weekly VRDNs
(Rand-Whitney Containerboard Limited Parntership)/(Chase
Manhattan Bank N.A., New York
LOC) 8,000,000
5,500,000 Connecticut Development Authority, (Series 1996A) Weekly VRDNs
(Connecticut Light & Power Co.)/(AMBAC INS)/(Societe Generale,
Paris
LIQ) 5,500,000
8,000,000 Connecticut Development Authority, (Series 1997A) Weekly VRDNs
(Bradley Airport Hotel Project)/(Kredietbank N.V., Brussels
LOC) 8,000,000
13,000,000 Connecticut Development Authority, (Series A) Weekly VRDNs
(Exeter Energy)/(Sanwa Bank Ltd., Osaka
LOC) 13,000,000
1,000,000 Connecticut Development Authority, (Series B) Weekly VRDNs
(Exeter Energy)/(Sanwa Bank Ltd., Osaka
LOC) 1,000,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CONNECTICUT -- CONTINUED
<C> <S>
<C>
$ 7,499,000 Connecticut Development Authority, (Series C) Weekly VRDNs
(Exeter Energy)/(Sanwa Bank Ltd., Osaka
LOC) $ 7,499,000
4,000,000 Connecticut Development Authority, PCR (Series 1993A) Weekly
VRDNs (Western Mass Electric Co.)/(Union Bank of Switzerland,
Zurich
LOC) 4,000,000
3,500,000 Connecticut Development Authority, PCR Refunding Bonds (Series
1993B) Weekly VRDNs (Connecticut Light & Power Co.)/(Union
Bank of Switzerland, Zurich
LOC) 3,500,000
5,000,000 Connecticut Development Health Care Facilities Weekly VRDNs
(Independence Living)/(Chase Manhattan Bank N.A., New York
LOC) 5,000,000
5,500,000 Connecticut Development Health Care Facilities Weekly VRDNs
(Independence Living)/(Credit Local de France
LOC) 5,500,000
10,700,000 Connecticut Municipal Electric Energy Cooperative, Power Supply
System Revenue Bonds (1995 Series A), 3.45% CP (Fleet National
Bank, Providence, RI LOC), Mandatory Tender
5/20/1997 10,700,000
1,700,000 Connecticut State HEFA Weekly VRDNs (Charlotte Hungerfield
Hospital)/(First National Bank of Boston, MA
LOC) 1,700,000
3,500,000 Connecticut State HEFA, (Series A) Weekly VRDNs (Forman School
Issue)/(National Westminster Bank, PLC, London
LOC) 3,500,000
6,500,000 Connecticut State HEFA, (Series N), 3.55% CP (Yale University),
Mandatory Tender
6/30/1997 6,500,000
4,000,000 Connecticut State HEFA, (Series P), 3.55% CP (Yale University),
Mandatory Tender
6/30/1997 4,000,000
1,000,000 Connecticut State HEFA, Revenue Bonds (Series A) Weekly VRDNs
(Pomfret School Issue)/(Credit Local de France
LOC) 1,000,000
7,000,000 Connecticut State HEFA, Series S, 3.45% CP (Yale University),
Mandatory Tender
5/19/1997 7,000,000
4,195,000 (b)Connecticut State HFA, (PT-81) Weekly VRDNs (Rabobank Nederland,
Utrecht
LIQ) 4,195,000
7,025,000 Connecticut State HFA, (Series 1990C), 3.45% CP (Morgan Guaranty
Trust Co., New York LIQ), Mandatory Tender
5/15/1997 7,025,000
3,000,000 Connecticut State HFA, (Series 1990D), 3.70% CP, Mandatory Tender
7/24/1997 3,000,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CONNECTICUT -- CONTINUED
<C> <S>
<C>
$ 3,245,000 Connecticut State HFA, (Series 1990D), 3.70% CP, Mandatory Tender
8/15/1997 $ 3,245,000
2,405,000 Connecticut State HFA, (Series A), 7.00% Bonds,
11/15/1997 2,446,051
4,925,000 Connecticut State, (1996 Series A), 4.00% Bonds,
5/15/1997 4,925,733
3,130,000 Connecticut State, 5.20% Bonds,
3/15/1998 3,172,457
2,200,000 Connecticut State, Airport Revenue Refunding Bonds (Series 1992),
7.20% Bonds (Bradley International Airport)/(FGIC INS),
10/1/1997 2,234,095
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
7/1/1997 12,000,000
1,000,000 Connecticut State, UT GO, 4.30% Bonds,
3/15/1998 1,003,190
2,000,000 East Hartford, CT, 3.70% BANs,
1/26/1998 2,003,575
11,100,000 Hartford, CT Redevelopment Authority Weekly VRDNs (Underwood
Towers)/(FSA INS)/(Barclays Bank PLC, London
LIQ) 11,100,000
5,000,000 Meriden, CT, 3.90% BANs,
8/13/1997 5,006,493
1,600,000 New Haven, CT Weekly VRDNs (Starter Sportswear)/(Fleet Bank,
N.A.
LOC) 1,600,000
7,000,000 New Haven, CT, 4.00% BANs (Fleet National Bank, Providence, RI
LOC),
5/22/1997 7,000,980
7,500,000 Stamford, CT Housing Authority, Multi-Modal Interchangeable Rate
Revenue Bonds (Series 1994) Weekly VRDNs (Morgan Street Project)/
(Deutsche Bank, AG
LOC) 7,500,000
1,336,000 Thomaston, CT, 3.70% BANs,
2/19/1998 1,337,759
Total 201,064,869
PUERTO RICO -- 13.8%
7,500,000 Commonwealth of Puerto Rico, Series 1997A, 4.00% TRANs,
7/30/1997 7,510,923
12,000,000 Puerto Rico Electric Power Authority, (Series K), 9.375% Bonds
(United States Treasury PRF), 7/1/1997
(@102) 12,355,649
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PUERTO RICO -- CONTINUED
<C> <S>
<C>
$ 3,125,000 Puerto Rico Government Development Bank, 3.70% CP, Mandatory
Tender
7/23/1997 $ 3,125,000
9,500,000 Puerto Rico Industrial, Tourist, Education, Medical & Environmental
Control Finance Authority, (Series 1994A), 3.80% CP (Inter American
University of Puerto Rico)/(Banque Paribas, Paris LOC), Mandatory
Tender
6/11/1997 9,500,000
Total 32,491,572
TOTAL INVESTMENTS (AT AMORTIZED
COST)(C) $ 233,556,441
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 25.7%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1 or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
100% 0%
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $14,889,376 which represents 6.3% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($235,232,356) at April 30, 1997.
The following acronyms are used throughout this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation BANs -- Bond
Anticipation Notes CP -- Commercial Paper FGIC -- Financial Guaranty
Insurance Company FSA -- Financial Security Assurance GO -- General
Obligation HEFA -- Health and Education Facilities Authority HFA --
Housing Finance Authority INS -- Insured LIQ -- Liquidity Agreement
LOC -- Letter of Credit PCR -- Pollution Control Revenue PLC -- Public
Limited Company PRF -- Prerefunded TOBs -- Tender Option Bonds TRANs
- -- Tax and Revenue Anticipation Notes UT -- Unlimited Tax VRDNs --
Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
CONNECTICUT MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $
233,556,441
Cash
522,988
Income receivable
1,835,659
Total assets
235,915,088
LIABILITIES:
Income distribution payable $ 642,861
Accrued expenses 39,871
Total liabilities
682,732
NET ASSETS for 235,232,443 shares outstanding $
235,232,356
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$235,232,356 / 235,232,443 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $
4,342,740
EXPENSES:
Investment advisory fee $ 628,331
Administrative personnel and services fee 94,889
Custodian fees 6,879
Transfer and dividend disbursing agent fees and expenses 28,956
Directors'/Trustees' fees 1,269
Auditing fees 6,520
Legal fees 2,961
Portfolio accounting fees 34,272
Shareholder services fee 314,165
Share registration costs 14,251
Printing and postage 4,522
Insurance premiums 2,654
Taxes 2,112
Miscellaneous 2,396
Total expenses 1,144,177
Waivers --
Waiver of investment advisory fee $ (248,818)
Waiver of shareholder services fee (138,233)
Total waivers (387,051)
Net expenses
757,126
Net investment income $
3,585,614
</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 YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 3,585,614 $ 6,691,741
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income (3,585,614) (6,691,741)
SHARE TRANSACTIONS --
Proceeds from sale of shares 433,136,717 636,539,589
Net asset value of shares issued to shareholders in
payment of
distributions declared 1,056,454 2,096,326
Cost of shares redeemed (426,049,558) (596,265,388)
Change in net assets resulting from share transactions 8,143,613 42,370,527
Change in net assets 8,143,613 42,370,527
NET ASSETS:
Beginning of period 227,088,743 184,718,216
End of period $ 235,232,356 $ 227,088,743
</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)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993** 1992 1991
1990(A)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment 0.01 0.03 0.03 0.02 0.02 0.03 0.04 0.05
income
LESS DISTRIBUTIONS
Distributions from net
investment income (0.01) (0.03) (0.03) (0.02) (0.02) (0.03) (0.04)
(0.05)
NET ASSET $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
VALUE, END OF PERIOD
TOTAL RETURN(B) 1.43% 3.02% 3.31% 2.12% 1.96% 2.68% 4.04%
5.54%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.60%* 0.60% 0.60% 0.59% 0.57% 0.56% 0.56%
0.48%*
Net investment 2.85%* 2.97% 3.26% 2.11% 1.95% 2.66% 3.94%
5.32%*
income
Expense waiver/
reimbursement(c) 0.31%* 0.32% 0.30% 0.18% 0.25% 0.30% 0.21%
0.28%*
SUPPLEMENTAL DATA
Net assets, end of
period
(000 omitted) $235,232 $227,089 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Connecticut Municipal Cash Trust (the "Fund"). The financial
statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest
is limited to the portfolio in which shares are held. The investment
objective of the Fund is current income exempt from federal regular
income tax and the 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.
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 Trustees (the "Trustees"). The Fund will
not incur any registration costs upon such resales. The Fund's
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,
1997 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST Clipper Connecticut Tax
Exempt Trust 5/6/94 - 11/26/94 $10,694,376 Connecticut State HFA
6/13/96 4,195,000
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, 1997, capital paid-in aggregated
$235,232,356.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR
SIX MONTHS ENDED
ENDED OCTOBER 31,
APRIL 30, 1997 1996
<S> <C> <C>
Shares sold 433,136,717 636,539,589
Shares issued to shareholders in payment of
distributions declared 1,056,454 2,096,326
Shares redeemed (426,049,558) (596,265,388)
Net change resulting from share transactions (8,143,613) (42,370,527)
</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
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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $181,413,125 and
$198,715,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997,
59.9% of the securities in the portfolio of investments are backed
by letters of credit or bond insurance of various financial
institutions and financial guaranty assurance agencies. The
percentage 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.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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.
CONNECTICUT MUNICIPAL CASH TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229105
0052406 (6/97)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of
Massachusetts Municipal Cash Trust, a portfolio of Federated Municipal
Trust, which covers the six-month period from November 1, 1996,
through April 30, 1997. 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 data is included for
the fund's Institutional Service Shares and Boston 1784 Funds Shares
(formerly, 1784 Funds Shares and prior to that, Bay Funds Shares).
The fund is a convenient way to keep your ready cash 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. At the
end of the reporting period, the fund's holdings were diversified
among issuers that use municipal bond financing for projects as varied
as health care, housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share for Institutional Service Shares and $0.01
per share for Boston 1784 Funds Shares. The fund's total net assets
stood at $214.4 million at the end of the reporting period.
Thank you for relying on Massachusetts Municipal Cash Trust to help
your ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Mary Jo Ochson, CFA,
Senior Vice President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
Q How has the fund's yield responded to this rate environment?
A The yield of the fund followed the upward trend of interest rates.
The seven-day net yield for the fund's Institutional Service Shares on
April 30, 1997 was 3.48% compared to 3.01% six months ago.* The latest
yield was the equivalent of a 5.76% taxable rate of return for
investors in the highest federal tax bracket. Over the six-month
reporting period the tax-exempt yield averaged 2.93%, which is
equivalent to a pre-tax yield of 4.85% for those same investors.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
For the Boston 1784 Funds Shares, the seven-day net yield on April 30,
1997 was 3.46% compared to 2.99% six months ago.* The latest yield was
equivalent to a 5.73% pre-tax yield. The average tax-exempt yield over
the period was 2.91%, which is comparable to a taxable yield of 5.72%
for those investors in the highest federal tax bracket.
Q What was your strategy for managing the fund over the reporting
period?
A The fund's average maturity at the beginning of the reporting period
was approximately 61 days. As signs of strength in the economy became
more apparent, and as expectations of an imminent Fed tightening grew
in the first quarter of 1997, we lowered the average maturity target
of the fund to between 40 and 50 days. At the end of the reporting
period we stood at an average maturity of 48 days. By allowing the
average maturity of the portfolio to roll inward from 61 days to a
target range of 40 to 50 days, we were able to take advantage of
higher interest rates going forward.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month fixed rate
notes. This portfolio structure continues to pursue a competitive
yield over time.
Q With one rate increase behind us, what is your outlook for the
remainder of 1997?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
MASSACHUSETTS MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- 99.2%
MASSACHUSETTS -- 97.6%
$ 3,000,000 Amherst-Pelham Regional School District, MA, 4.09% BANs, 2/13/1998 $
3,007,520
742,000 Ayer, MA, 4.875% Bonds (AMBAC INS), 8/15/1997
744,465
1,000,000 Barnstable, MA, 4.00% BANs, 10/23/1997
1,000,119
1,900,000 Boston, MA Water & Sewer Commission, General Revenue Bonds
(1994 Series A) Weekly VRDNs (State Street Bank and Trust Co. LOC)
1,900,000
6,500,000 Chatham, MA, 4.00% BANs, 7/2/1997
6,502,602
3,000,000 Clinton, MA, 4.00% BANs, 11/21/1997
3,005,660
14,696,550 (b)Clipper, MA Tax Exempt Trust Weekly VRDNs (State Street Bank and
Trust Co. LIQ)
14,696,550
3,465,000 (b)Clipper, MA Tax Exempt Trust, (Series 1993-1) Weekly VRDNs (State
Street Bank and Trust Co. LIQ)
3,465,000
3,000,000 Commonwealth of Massachusetts Weekly VRDNs (AMBAC INS)/
(Citibank N.A., New York LIQ)
3,000,000
1,645,000 Commonwealth of Massachusetts, (Series B), 5.00% Bonds, 6/1/1997
1,646,628
3,200,000 Framingham, MA IDA Weekly VRDNs (Perini Corp)/(Barclays Bank
PLC, London LOC)
3,200,000
3,000,000 Gloucester, MA, 3.85% BANs, 8/8/1997
3,001,018
5,400,000 Haverhill, MA, 4.50% BANs (Fleet National Bank, Providence, RI
LOC), 8/1/1997
5,408,669
2,000,000 Massachusetts Bay Transit Authority, (Series C), 3.60% CP
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/22/1997
2,000,000
2,000,000 Massachusetts Bay Transit Authority, (Series C), 3.80% CP
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/21/1997
2,000,000
400,000 Massachusetts HEFA Weekly VRDNs (Harvard University)
400,000
16,500,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Brigham & Women's
Hospital)/(Sanwa Bank Ltd, Osaka LOC)
16,500,000
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MASSACHUSETTS -- CONTINUED
$ 2,200,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Endicott College)/
(BayBanks of Boston LOC) $
2,200,000
3,225,000 Massachusetts HEFA, (Series A) Weekly VRDNs (New England Home
For Little Wanderers)/(First National Bank of Boston, MA LOC)
3,225,000
2,300,000 Massachusetts HEFA, (Series B) Weekly VRDNs (Clark University)/
(Sanwa Bank Ltd., Osaka LOC)
2,300,000
2,300,000 Massachusetts HEFA, (Series E) Weekly VRDNs (Williams College, MA)
2,300,000
3,200,000 Massachusetts HEFA, (Series E) Daily VRDNs (Capital Asset
Program)/(First National Bank of Chicago LOC)
3,200,000
7,200,000 Massachusetts HEFA, (Series F) Weekly VRDNs (Children's Hospital
of Boston)
7,200,000
9,835,000 Massachusetts HEFA, (Series G) Weekly VRDNs (Massachusetts
Institute of Technology)
9,835,000
2,025,000 Massachusetts HEFA, (Series I) Weekly VRDNs (Harvard University)
2,025,000
6,000,000 Massachusetts HEFA, 3.75% CP (Harvard University), Mandatory
Tender 7/16/1997
6,000,000
6,000,000 Massachusetts HEFA, 3.80% CP (Harvard University), Mandatory
Tender 5/1/1997
6,000,000
500,000 Massachusetts IFA Weekly VRDNs (Berkshire, MA School)/(National
Westminster Bank, PLC, London LOC)
500,000
1,300,000 Massachusetts IFA Weekly VRDNs (Groton School)/(National
Westminster Bank, PLC, London LOC)
1,300,000
1,700,000 Massachusetts IFA Weekly VRDNs (Hampshire College)/(National
Westminster Bank, PLC, London LOC)
1,700,000
2,350,000 Massachusetts IFA Weekly VRDNs (Kendall Square Entity)/(State
Street Bank and Trust Co. LOC)
2,350,000
1,910,000 Massachusetts IFA, (1995 Series A) Weekly VRDNs (Bradford College
Issue)/(First National Bank of Boston, MA LOC)
1,910,000
300,000 Massachusetts IFA, (Series 1992) Weekly VRDNs (Holyoke Water
Power Co.)/(Canadian Imperial Bank of Commerce, Toronto LOC)
300,000
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MASSACHUSETTS -- CONTINUED
$ 3,300,000 Massachusetts IFA, (Series 1992A) Weekly VRDNs (Ogden Haverhill)/
(Union Bank of Switzerland, Zurich LOC) $
3,300,000
5,000,000 Massachusetts IFA, (Series 1992B), 3.50% CP (New England Power Co.),
Mandatory Tender 5/29/1997
5,000,000
6,000,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard House)/
(Fleet Bank of New York LOC)
6,000,000
5,800,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Whitehead Institute
for Biomedical Research)
5,800,000
7,200,000 Massachusetts IFA, (Series 1996) Weekly VRDNs (Newbury College)/
(BayBanks of Boston LOC)
7,200,000
1,525,000 Massachusetts IFA, (Series A) Weekly VRDNs (Hockomock YMCA)/
(Bank of Nova Scotia, Toronto LOC)
1,525,000
5,500,000 Massachusetts IFA, (Series B) Weekly VRDNs (Williston North
Hampton School)/(National Westminster Bank, PLC, London LOC)
5,500,000
5,955,000 Massachusetts IFA, Revenue Bonds (Series 1995) Weekly VRDNs
(Emerson College Issue)/(BayBanks of Boston LOC)
5,955,000
5,000,000 Massachusetts IFA, Revenue Bonds (Series 1995C) Weekly VRDNs
(Edgewood Retirement Community Project)/(Dresdner Bank Ag,
Frankfurt LOC)
5,000,000
1,600,000 Massachusetts Municipal Wholesale Electric Company, Power Supply
System Revenue Bonds (1994 Series C) Weekly VRDNs (Canadian
Imperial Bank of Commerce, Toronto LOC)
1,600,000
4,000,000 Massachusetts State HFA, (Series 50), 3.70% TOBs (Bayerische
Landesbank Girozentrale INV), Mandatory Tender 6/2/1997
4,000,000
3,200,000 Massachusetts Water Resources Authority, (Series 1994), 3.40% CP
(Morgan Guaranty Trust Co., New York LOC), Mandatory Tender
5/19/1997
3,200,000
2,000,000 Massachusetts Water Resources Authority, (Series 1994), 3.50% CP
(Morgan Guaranty Trust Co., New York LOC), Mandatory Tender
7/16/1997
2,000,000
2,000,000 Medway, MA, 4.50% BANs, 6/13/1997
2,001,724
2,300,000 Melrose, MA, 4.25% BANs, 8/22/1997
2,301,719
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MASSACHUSETTS -- CONTINUED
$ 3,080,000 Middleton, MA, 4.10% BANs, 9/5/1997 $
3,082,058
1,665,400 Millbury, MA, 4.00% BANs, 11/14/1997
1,667,563
3,494,797 Milton, MA, 3.73% BANs, 12/16/1997
3,495,411
5,000,000 North Andover, MA, 4.00% BANs, 1/22/1998
5,010,523
3,773,100 North Andover, MA, 4.10% BANs, 9/11/1997
3,773,485
1,100,000 Rutland, MA, 4.10% BANs, 2/13/1998
1,102,507
2,500,000 Southborough, MA, 4.00% BANs, 2/6/1998
2,505,558
4,500,000 Springfield, MA, 4.50% BANs (Fleet National Bank, Providence, RI
LOC), 6/27/1997
4,503,374
Total
209,347,153
PUERTO RICO -- 1.6%
3,500,000 Puerto Rico Industrial, Medical & Environmental PCA, (Series 1988),
3.70% CP (Inter American University of Puerto Rico)/(Bank of Tokyo-
Mitsubishi Ltd. LOC), Mandatory Tender 7/24/1997
3,500,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $
212,847,153
</TABLE>
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1 or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
99.22% 0.78%
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $18,161,550 which represents 8.5% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($214,407,753) at April 30, 1997.
The following acronyms are used throughout this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation BANs -- Bond
Anticipation Notes CP -- Commercial Paper HEFA -- Health and Education
Facilities Authority HFA -- Housing Finance Authority IDA --
Industrial Development Authority IFA -- Industrial Finance Authority
INS -- Insured INV -- Investment Agreement LIQ -- Liquidity Agreement
LOC -- Letter of Credit PCA -- Pollution Control Authority PLC --
Public Limited Company TOBs -- Tender Option Bonds 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $212,847,153
Cash 583,681
Income receivable 1,560,713
Total assets 214,991,547
LIABILITIES:
Payable for shares redeemed $ 25,000
Income distribution payable 504,483
Accrued expenses 54,311
Total liabilities 583,794
NET ASSETS for 214,407,753 shares outstanding $214,407,753
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$164,156,547 / 164,156,547 shares outstanding $1.00
BOSTON 1784 FUNDS SHARES:
$50,251,206 / 50,251,206 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $3,283,479
EXPENSES:
Investment advisory fee $ 471,143
Administrative personnel and services fee 76,818
Custodian fees 8,996
Transfer and dividend disbursing agent fees and expenses 29,284
Sub-transfer agent fees -- Boston 1784 Funds Shares 5,313
Directors'/Trustees' fees 1,654
Auditing fees 6,839
Legal fees 2,222
Portfolio accounting fees 31,822
Shareholder services fee -- Institutional Service Shares 169,166
Shareholder services fee -- Boston 1784 Funds Shares 66,416
Share registration costs 14,156
Printing and postage 11,334
Insurance premiums 2,548
Miscellaneous 1,384
Total expenses 899,095
Waivers --
Waiver of investment advisory fee $(140,528)
Waiver of shareholder services fee --
Institutional Service Shares (169,166)
Waiver of shareholder services fee -- Boston 1784 Funds (66,416)
Shares
Total waivers (376,110)
Net expenses 522,985
Net investment income $2,760,494
</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,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 2,760,494 $ 5,167,035
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Service Shares (1,988,395) (3,622,277)
Boston 1784 Funds Shares (772,099) (1,544,758)
Change in net assets resulting from (2,760,494) (5,167,035)
distributions to shareholders
SHARE TRANSACTIONS --
Proceeds from sale of shares 346,743,377 533,103,977
Net asset value of shares issued to
shareholders in payment of
distributions declared 1,162,573 2,757,964
Cost of shares redeemed (307,904,518) (507,663,326)
Change in net assets resulting from share 40,001,432 28,198,615
transactions
Change in net assets 40,001,432 28,198,615
NET ASSETS:
Beginning of period 174,406,321 146,207,706
End of period $ 214,407,753 $ 174,406,321
</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 31,
1997 1996 1995 1994 1993 1992 1991
1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.02 0.02 0.03
0.05 0.03
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (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
$ 1.00
TOTAL RETURN(B) 1.46% 3.07% 3.34% 2.14% 1.99% 2.87%
4.63% 2.59%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.55% 0.55% 0.55% 0.53% 0.34% 0.30%
0.17%*
Net investment income 2.93%* 3.02% 3.30% 2.12% 1.97% 2.82% 4.48%
5.66%*
Expense waiver/
reimbursement(c) 0.40%* 0.42% 0.45% 0.35% 0.43% 0.55% 0.69%
0.57%*
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $164,156 $119,739 $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 -- BOSTON 1784 FUNDS SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER
31,
1997 1996 1995 1994
1993(A)
<S> <C> <C> <C> <C>
<C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03
0.02 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.01) (0.03) (0.03)
(0.02) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00
TOTAL RETURN(B) 1.45% 3.05% 3.30%
2.05% 1.25%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.57%* 0.58% 0.60% 0.64%
0.65%*
Net investment income 2.91%* 3.01% 3.25% 2.09%
1.85%*
Expense waiver/reimbursement(c) 0.40%* 0.42% 0.45% 0.35%
0.43%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $50,251 $54,667 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Massachusetts Municipal Cash Trust (the "Fund"). The financial
statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest
is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Service Shares and Boston 1784
Funds Shares (formerly, 1784 Funds Shares and prior to that, Bay Funds
Shares). The investment objective of the Fund is to provide current
income exempt from federal regular income tax 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.
RESTRICTED SECURITIES -- Restricted securities are securities that may
only be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such
restricted securities may be determined to be liquid under criteria
established by the Board of Trustees (the "Trustees"). The Fund will
not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7
under the Act.
Additional information on each restricted security held at April 30,
1997 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Clipper, MA Tax Exempt Trust Weekly 5/15/95-3/13/97 $14,696,550
VRDN's
Clipper, MA Tax Exempt Trust, (Series 1993-1)
Weekly VRDN's 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, 1997, capital
paid-in aggregated $214,407,753. Transactions in shares were as
follows:
<TABLE>
<CAPTION>
SIX-MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1997 1996
<S> <C> <C>
Shares sold 329,987,446 489,456,450
Shares issued to shareholders in payment of distributions declared 524,602 1,214,590
Shares redeemed (286,094,346) (470,559,983)
Net change resulting from Institutional Service Share transactions 44,417,702 20,111,057
<CAPTION>
SIX-MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
BOSTON 1784 FUND SHARES 1997 1996
<S> <C> <C>
Shares sold 16,755,931 43,647,527
Shares issued to shareholders in payment of distributions declared 637,971 1,543,374
Shares redeemed (21,810,172) (37,103,343)
Net change resulting from Boston 1784 Funds Share transactions (4,416,270) 8,087,558
Net change resulting from share transactions 40,001,432 28,198,615
</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 Bank Boston, N.A., the Fund will pay Bank
Boston, N.A., up to 0.25% of average daily net assets of Boston 1784
Funds Shares for the period. These fees are used to finance certain
services for shareholders and to maintain shareholder accounts. FSS
and Bank Boston, N.A. may voluntarily choose to waive any portion of
their fees. FSS and Bank Boston, N.A. can modify or terminate these
voluntary waivers at any time at their sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ,
through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997, 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 $149,596,550 and $129,860,000,
respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 48.0% of the
securities in the portfolio of investments are backed by letters of
credit or bond insurance of various financial institutions and
financial guaranty assurance agencies. The percentage of investments
insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 8.8% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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.
MASSACHUSETTS
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
INSTITUTIONAL SERVICE SHARES
BOSTON 1784 FUNDS SHARES
(FORMERLY, 1784 FUNDS SHARES AND PRIOR TO THAT, BAYFUNDS SHARES)
[Graphic]
Investment Adviser
Federated Securities Corp., Distributor
314229832
314229303
Z00326 1052806 (6/97)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of
Minnesota Municipal Cash Trust, a portfolio of Federated Municipal
Trust, which covers the six-month period from November 1, 1996,
through April 30, 1997. 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 keep your ready cash 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. At the end of
the reporting period, the fund's holdings were diversified among
issuers that use municipal bond financing for projects as varied as
health care, housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share for Institutional Shares and $0.01 per share
for Cash Series Shares. The fund's net assets stood at $410.7 million
at the end of the reporting period.
Thank you for relying on Minnesota Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Mary Jo Ochson, CFA,
Senior Vice President, Federated Management
Q
Can you comment on the economy and the interest rate environment
during the six-month period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February, and
by the time of the Fed tightening in late March, had built in much of
the expectations regarding the Fed decision. In April, the financial
markets continued to focus on the likelihood of an additional
tightening move later in May, causing short-term yields to rise even
further. Yields on the six-month Treasury bill rose sharply over this
interim period moving from a low of 5.20% in mid-February to a high of
5.68% in late April before falling back to 5.53% by the end of
reporting period.
Q
How has the fund's yield responded to this rate environment?
A The yield of the fund followed the upward trend of interest rates.
The seven-day net yield for the funds' Institutional Shares on April
30, 1997 was 4.06% compared to 3.41% six months ago.* The latest yield
was the equivalent of a 6.72% taxable rate of return for investors in
the highest federal tax bracket. Over the six-month reporting period
the tax-exempt yield averaged 3.30%, which is equivalent to a pre-tax
yield of 5.46% for those same investors.
For the Cash Series Shares, the seven-day net yield on April 30, 1997,
was 3.56% compared to 2.91% six months ago.* The latest yield was
equivalent to a 5.89% pre-tax yield. The average tax-exempt yield over
the period was 2.80%, which is comparable to a taxable yield of 4.64%
for those investors in the highest federal tax bracket.
Q
What was your strategy for managing the fund over the period?
A The fund's average maturity at the beginning of the reporting period
was around 48 days. As signs of strength in the economy became more
apparent, and as expectations of an imminent Fed tightening increased
in the first quarter of 1997, the fund's average maturity remained in
the 40-50 day range. We used this neutral portfolio target while
participating in the Minnesota fixed rate note season. We took
advantage of its attractive yields in early 1996. At the end of the
reporting period the fund stood at an average maturity of 49 days.
Q
With one rate increase behind us, what is your outlook for the
remainder of 1997?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
MINNESOTA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- 99.6%
MINNESOTA -- 99.6%
$ 6,000,000 Anoka City, MN Solid Waste Disposal Authority, 3.85% CP (United
Power Associates)/(National Rural Utilities Cooperative Finance Corp.
GTD), Mandatory Tender 7/18/1997 $
6,000,000
2,050,000 Anoka, MN, Multifamily Housing Revenue Bonds Weekly VRDNs
(Walker Plaza Project)/(First Bank N.A., Minneapolis LOC)
2,050,000
3,785,000 Apple Valley, MN, IDRB (Series 1995) Weekly
VRDNs (AV Development Company Project)/(Firstar
Bank, Minnesota LOC)
3,785,000
2,355,000 Baudette, MN, IDR (Series 1989) Weekly VRDNs
(Reid Powell, Inc.)/ (NationsBank, South LOC)
2,355,000
2,000,000 Becker, MN, PCR (Series 1993-B), 3.35% CP (Northern States Power
Co.), Mandatory Tender 5/12/1997
2,000,000
6,700,000 Becker, MN, PCR (Series 1993A & B), 3.40% CP
(Northern States Power Co.), Mandatory Tender
6/11/1997
6,700,000
4,000,000 Becker, MN, PCR (Series 1993A & B), 3.80% CP
(Northern States Power Co.), Mandatory Tender
8/22/1997
4,000,000
500,000 Beltrami County, MN, Environmental Control Authority Daily
VRDNs (Northwood Panelboard Co.)/(Union Bank of Switzerland,
Zurich LOC)
500,000
1,400,000 Beltrami County, MN, Environmental Control Authority, (Series 1995)
Daily VRDNs (Northwood Panelboard Co.)/(Union Bank of
Switzerland, Zurich LOC)
1,400,000
2,855,000 Blaine, MN, Industrial Development Revenue
Bonds (Series 1996) Weekly VRDNs (S & S of
Minnesota, LLC Project)/(Norwest Bank
Minnesota, Minneapolis LOC)
2,855,000
3,000,000 Bloomington, MN Port Authority, Special Tax Revenue Refunding
Bonds (Series 1994B) Weekly VRDNs (Mall of America)/(FSA INS)/
(Credit Local de France LIQ)
3,000,000
2,000,000 Bloomington, MN Port Authority, Special Tax Revenue Refunding
Bonds (Series 1996B) Weekly VRDNs (Mall of America)/(FSA INS)/
(Credit Local de France LIQ)
2,000,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 3,300,000 Bloomington, MN, IDRB (Series 1995) Weekly VRDNs (Now
Technologies, Inc. Project)/(Norwest Bank Minnesota, Minneapolis
LOC) $
3,300,000
5,000,000 Bloomington, MN, Multifamily Housing Weekly VRDNs (Crow/
Bloomington Apartments)/(Citibank N.A., New York LOC)
5,000,000
4,180,000 Burnsville, MN, Adjustable Rate IDRB (Series 1996) Weekly VRDNs
(Caire, Inc. Project)/(Bank One, Milwaukee, WI N.A. LOC)
4,180,000
7,975,000 Burnsville, MN, Multifamily Housing Weekly VRDNs (Berkshire of
Burnsville)/(Sumitomo Bank Ltd., Osaka LOC)
7,975,000
1,275,000 Chanhassen, MN IDA, (Series 1995) Weekly VRDNs (Building
Management Group, L.L.C. Project)/(Norwest Bank Minnesota,
Minneapolis LOC)
1,275,000
1,700,000 Chaska, MN, GO Refunding Bonds of 1996, 3.80% Bonds, 12/1/1997
1,698,249
5,000,000 Cloquet, MN, Industrial Facilities Revenue Bonds (Series 1996A)
Weekly VRDNs (Potlatch Corp.)/(Credit Suisse, Zurich LOC)
5,000,000
2,800,000 Coon Rapids, MN Hospital Authority, (Series 1985) Weekly VRDNs
(Health Central System)/(First Bank N.A., Minneapolis LOC)
2,800,000
2,350,000 Cottage Grove, MN, IDR Refunding Bonds (Series 1995) Weekly
VRDNs (Supervalu Inc.)/(Wachovia Bank of Georgia N.A.,
Atlanta LOC)
2,350,000
5,300,000 Crystal, MN IDA Weekly VRDNs (Crystal Gallery Mall, MN)/
(Citibank N.A., New York LOC)
5,300,000
10,745,000 (b)Dakota County & Washington County MN Housing
& Redevelopment Authority, MERLOTS (Series J),
4.05% TOBs (United States Treasury
COL)/(Corestates Bank N.A., Philadelphia, PA
LIQ), Optional Tender 6/1/1997
10,745,000
1,555,000 (b)Dakota County, MN Housing & Redevelopment
Authority, (Custodial Receipts), 4.00% TOBs
(GNMA COL)/(Corestates Bank N.A., Philadelphia,
PA LIQ), Optional Tender 9/1/1997
1,555,000
3,000,000 (b)Dakota County, Washington County & Anoka
City, MN Housing & Redevelopment Authority,
MERLOTS-Series H, 4.05% TOBs (United States
Treasury COL)/(Corestates Bank N.A.,
Philadelphia, PA LIQ), Optional Tender 6/1/1997
3,000,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 9,525,000 Duluth, MN, GO Tax and Aid Anticipation Certificates of
Indebtedness of 1997, 4.00% TANs, 12/31/1997 $
9,543,430
8,000,000 Eagan, MN, Multifamily Housing (Series 1992A) Weekly VRDNs
(Cinnamon Ridge)/(Mellon Bank N.A., Pittsburgh LOC)
8,000,000
835,000 Eden Prairie, MN IDA, #194 Weekly VRDNs (Richard W. Cohen
Project)/(Norwest Bank Minnesota, Minneapolis LOC)
835,000
1,340,000 Eden Prairie, MN IDA, (Series 1996) Weekly VRDNs (Challenge
Printing, Inc. Project)/(Norwest Bank Minnesota,
Minneapolis LOC)
1,340,000
1,405,000 Eden Prairie, MN IDA, (Series 1995) Weekly VRDNs (Robert
Lothenbach Project)/(Norwest Bank Minnesota,
Minneapolis LOC)
1,405,000
1,025,000 Elk River, MN Weekly VRDNs (Tescom Project)/(Norwest Bank
Minnesota, Minneapolis LOC)
1,025,000
2,945,000 Farmington, MN, (Series 1996) Weekly VRDNs (Lexington Standard
Corporation Project)/(Norwest Bank Minnesota, Minneapolis LOC)
2,945,000
960,000 Foley, MN Independent School District No. 051, 3.84% TANs
(Minnesota Tax and Aid Anticipation Borrowing Program GTD),
2/6/1998
961,349
3,300,000 (b)Forest Lake, MN, Series A, 4.00% TOBs
(Allina Health System, MN), Optional Tender
7/1/1997
3,300,000
3,910,000 Fridley, MN, (Series 1984) Weekly VRDNs (River Road Investors
Project)/(Citibank N.A., New York LOC)
3,910,000
10,600,000 Hennepin Co. MN, (Series 1995C) Weekly VRDNs (Hennepin Co.
MN GTD)
10,600,000
5,550,000 Hennepin Co. MN, (Series 1996C) Weekly VRDNs (Hennepin Co.
MN GTD)
5,550,000
5,500,000 Hubbard County, MN, Solid Waste Disposal (Series 1990) Weekly
VRDNs (Potlatch Corp.)/(Credit Suisse, Zurich LOC)
5,500,000
3,205,000 Lakeville, MN ISD 194, (Series 1996), 3.90% TRANs, 9/30/1997
3,205,000
1,000,000 (b)MN Insured Municipal Securities Trust, Series 1996A, Floating Rate
Certificates Weekly VRDNs (Eden Prairie MN, ISD 272)/(MBIA INS)/
(Norwest Bank Minnesota, Minneapolis LIQ)
1,000,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 1,125,000 (b)MN Insured Municipal Securities Trust, Series 1996B, Floating Rate
Certificates Weekly VRDNs (Eden Prairie MN, ISD 272)/(MBIA INS)/
(Norwest Bank Minnesota, Minneapolis LIQ) $
1,125,000
2,500,000 (b)MN Insured Municipal Securities Trust, Series 1996H, Floating Rate
Certificates Weekly VRDNs (St. Louis Park, MN Health Care
Facilities)/(AMBAC INS)/(Norwest Bank Minnesota, Minneapolis
LIQ)
2,500,000
5,000,000 (b)MN Municipal Securities Trust, Series 1996F, Floating Rate Certificates
Weekly VRDNs (Benedictine Health System) /(Norwest Bank
Minnesota, Minneapolis LIQ)
5,000,000
4,000,000 (b)MN Municipal Securities Trust, Series 1996H, Floating Rate
Certificates Weekly VRDNs (Rosemount, MN ISD 196)/(FSA INS)/
(Norwest Bank Minnesota, Minneapolis LIQ)
4,000,000
2,250,000 (b)MN Municipal Securities Trusts, Series 1996D, Floating Rate
Certificates Weekly VRDNs (North St. Paul-Maplewood, MN ISD
622)/(Norwest Bank Minnesota, Minneapolis LIQ)
2,250,000
3,900,000 Maple Grove, MN IDA, (Series 1991A) Weekly VRDNs (Eagle Ridge,
MN Apartments)/(Sumitomo Bank Ltd., Osaka LOC)
3,900,000
3,000,000 Maple Grove, MN IDA, (Series 1991B) Weekly VRDNs (Eagle Ridge,
MN Apartments)/(Sumitomo Bank Ltd., Osaka LOC)
3,000,000
2,025,000 Maplewood, MN, Multifamily Housing (Series 1993) Weekly VRDNs
(Silver Ridge Project)/(Federal Home Loan Bank of Chicago LOC)
2,025,000
2,580,000 Mendota Heights, MN, Multifamily Revenue Bonds Weekly VRDNs
(Lexington Heights Apartments)/(Sumitomo Bank Ltd., Osaka LOC)
2,580,000
1,555,000 Minneapolis CDA, Refunding Revenue Bonds Weekly VRDNs
(Riverplace Project (The Pinnacle Apartments))/(Sumitomo Bank Ltd.,
Osaka LOC)
1,555,000
700,000 Minneapolis, MN IDA Weekly VRDNs (JTJ Co.)/(First Bank N.A.,
Minneapolis LOC)
700,000
6,600,000 Minneapolis, MN, (Series 1995B) Weekly VRDNs
6,600,000
7,000,000 Minneapolis, MN, Housing Development Revenue Refunding Bonds
(Series 1988) Weekly VRDNs (Symphony Place) /(Citibank N.A.,
New York LOC)
7,000,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 1,000,000 Minneapolis, MN, Variable Rate Demand Commercial Development
Revenue Refunding Bonds (Series 1996) Weekly VRDNs (WNB &
Company Project)/(First Bank N.A., Minneapolis LOC) $
1,000,000
1,000,000 Minneapolis, MN, Variable Rate Housing Revenue Bonds Weekly
VRDNs (One Ten Grant Project)/(First Bank N.A., Minneapolis LOC)
1,000,000
11,000,000 Minneapolis, MN, Various Purpose Bonds (Series 1996) Weekly
VRDNs (Bayerische Vereinsbank AG, Munich LIQ)
11,000,000
991,000 (b)Minneapolis/St. Paul MN Housing Finance
Board, SFM Revenue Bonds, 4.20% TOBs (GNMA
COL)/(Corestates Bank N.A., Philadelphia, PA
LIQ), Optional Tender 8/1/1997
991,000
4,020,000 (b)Minneapolis/St. Paul MN Housing Finance
Board, SFM Revenue Bonds, MERLOTS (Series D),
4.00% TOBs (GNMA COL)/(Corestates Bank N.A.,
Philadelphia, PA LIQ), Optional Tender 7/1/1997
4,020,000
8,000,000 Minnesota Agricultural and Economic Development Board, (Series
1996) Weekly VRDNs (Evangelical Lutheran Good Samaritan
Society)/(Rabobank Nederland, Utrecht LOC)
8,000,000
8,000,000 Minnesota State Commissioner of Iron Range Resources &
Rehabilitation, (Series 1991) Weekly VRDNs (Louisiana-Pacific Corp.)/
(Wachovia Bank of NC, N.A., Winston-Salem LOC)
8,000,000
775,000 Minnesota State HFA, Rental Housing (Series D), 4.15% Bonds
(MBIA INS), 8/1/1997
775,557
10,900,000 Minnesota State HFA, Single Family Mortgage Bonds (Series J), 3.65%
TOBs, Mandatory Tender 12/11/1997
10,900,000
10,305,000 Minnesota State HFA, Single Family Mortgage Bonds (Series K),
3.60% TOBs, Mandatory Tender 12/11/1997
10,305,000
3,800,000 Minnesota State Higher Education Coordinating Board, (Series 1992A)
Weekly VRDNs (First Bank N.A., Minneapolis LIQ)
3,800,000
7,000,000 Minnesota State Higher Education Coordinating Board, 1992 (Series B)
Weekly VRDNs (First Bank N.A., Minneapolis LIQ)
7,000,000
8,700,000 Minnesota State Higher Education Coordinating Board, 1992 (Series C)
Weekly VRDNs (First Bank N.A., Minneapolis LIQ)
8,700,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 6,500,000 Minnesota State Higher Education Coordinating Board, 1992 (Series C)
Weekly VRDNs (First Bank N.A., Minneapolis LIQ) $
6,500,000
3,000,000 Minnesota State Higher Education Facility Authority, (Series Four-A2)
Weekly VRDNs (University of St. Thomas)
3,000,000
5,000,000 Minnesota State, (Series A), 5.00% Bonds (AMBAC INS), 6/30/1997
5,010,489
1,000,000 Minnesota State, 6.60% Bonds, 8/1/1997
1,006,493
3,825,000 Minnesota State, GO State Various Purpose Bonds, 5.00% Bonds,
11/1/1997
3,847,829
5,000,000 Minnesota State, UT GO Refunding Bonds, 4.70% Bonds, 8/1/1997
5,012,967
2,000,000 Minnesota Tax and Aid Anticipation Borrowing Program, (Series B),
3.65% TANs (Minnesota Tax and Aid Anticipation Borrowing
Program GTD), 3/10/1998
2,000,000
9,500,000 Minnesota Tax and Aid Anticipation Borrowing Program, Certificates
of Participation, Aid Anticipation Series 1996A, 4.50% TANs
(Minnesota Tax and Aid Anticipation Borrowing Program GTD),
8/19/1997
9,515,145
6,600,000 Minnesota Tax and Aid Anticipation Borrowing Program, Certificates
of Participation, Aid Anticipation Series 1996B, 4.50% TANs
(Minnesota Tax and Aid Anticipation Borrowing Program GTD),
9/9/1997
6,614,159
1,300,000 Minnetonka, MN, IDRB (Series 1996) Weekly VRDNs (PGI Cos., Inc.)/
(Norwest Bank Minnesota, Minneapolis LOC)
1,300,000
5,900,000 Minnetonka, MN, Multifamily Housing Revenue Refunding Bonds
(Series 1995) Weekly VRDNs (Southampton Apartments Project
(MN))/(National Bank of Canada, Montreal LOC)
5,900,000
1,300,000 New Brighton, MN, IDR Weekly VRDNs (Unicare Homes, Inc.)/
(Banque Paribas, Paris LOC)
1,300,000
1,000,000 New Hope, MN IDRB, (Series 1994) Weekly VRDNs (Gaines and
Hanson Printing Co.)/(Norwest Bank Minnesota, Minneapolis LOC)
1,000,000
3,560,000 New Hope, MN Weekly VRDNs (Paddock Labs)/(First Bank N.A.,
Minneapolis LOC)
3,560,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 2,445,000 Olmsted County, MN Building Authority, Certificates of Participation
Weekly VRDNs (Human Services Infrastructure)/(Toronto-Dominion
Bank LOC) $
2,445,000
1,800,000 Perham, MN IDA Weekly VRDNs (Land O' Lakes, Inc.)/(Rabobank
Nederland, Utrecht LOC)
1,800,000
1,320,000 Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC)
1,320,000
4,000,000 Plymouth, MN, IDRB (Series 1994) Weekly VRDNs
(Olympic Steel, Inc.)/(National City Bank,
Cleveland, OH LOC)
4,000,000
1,180,000 Port of Austin, MN Weekly VRDNs (Mower House Color)/(Norwest
Bank Minnesota, Minneapolis LOC)
1,180,000
750,000 Rogers, MN IDA Weekly VRDNs (Metal Sales Manufacturing Corp)/
(KeyBank, N.A. LOC)
750,000
2,750,000 Rogers, MN IDA, IDRB Weekly VRDNs (DAC
Development, LLC Project)/(Norwest Bank
Minnesota, Minneapolis LOC)
2,750,000
8,000,000 Shakopee, MN Hospital Finance Authority Weekly VRDNs
(St. Francis Regional Medical Center)/(Citibank N.A., New York LOC)
8,000,000
1,450,000 (b)St. Cloud, MN Housing & Redevelopment Authority, Revenue
Refunding Bonds (Series 1994A) Weekly VRDNs (Coborn's
Incorporated Project)/(Norwest Bank Minnesota, Minneapolis LOC)
1,450,000
2,655,000 (b)St. Cloud, MN Housing & Redevelopment Authority, Revenue
Refunding Bonds (Series 1994B) Weekly VRDNs (Coborn's
Incorporated Project)/(Norwest Bank Minnesota, Minneapolis LOC)
2,655,000
4,800,000 St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs
(District Cooling St. Paul, Inc.)/(Credit Local de France LOC)
4,800,000
400,000 St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs
(United Way)/(First Bank N.A., Minneapolis LOC)
400,000
400,000 St. Paul, MN Housing & Redevelopment Authority, (Series 1994)
Weekly VRDNs (Minnesota Children's Museum)/(First Bank N.A.,
Minneapolis LOC)
400,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 2,000,000 St. Paul, MN Housing & Redevelopment Authority, District Cooling
Revenue Bonds (1995 Series I) Weekly VRDNs (Credit Local de
France LOC) $
2,000,000
9,600,000 St. Paul, MN Water Utility, Variable Rate Demand Water Revenue
Bonds, Series 1994D Weekly VRDNs
9,600,000
1,000,000 Steele County, MN, IDRB (Series 1994) Weekly
VRDNs (Blount, Inc.)/ (NationsBank, South LOC)
1,000,000
4,500,000 Stillwater, MN ISD #834, GO Obligation Aid Anticipation Certificates
of Indebtedness (Series 1996), 4.10% TRANs (Minnesota Tax and Aid
Anticipation Borrowing Program), 9/30/1997
4,502,648
3,855,000 Victoria, MN, IDRB, (Series 1996A) Weekly VRDNs (HEI, Inc.
Project)/(Norwest Bank Minnesota, Minneapolis LOC)
3,855,000
1,330,000 Victoria, MN, Industrial Development Revenue Bonds, (Series 1996B)
Weekly VRDNs (HEI, Inc. Project)/(Norwest Bank Minnesota,
Minneapolis LOC)
1,330,000
12,795,000 Washington County, MN Housing & Redevelopment Authority,
(Series 90) Weekly VRDNs (Granada Pond Apartments)/(Sumitomo
Bank Ltd., Osaka LOC)
12,795,000
2,250,000 Wells, MN, 3.875% TOBs (Stokely,
Inc.)/(Corestates Bank N.A., Philadelphia, PA
LOC), Optional Tender 6/1/1997
2,250,000
7,440,000 White Bear Lake, MN Independent School District No. 624, GO Tax
Anticipation Certificates, 3.75% TANs (Minnesota Tax and Aid
Anticipation Borrowing Program)/(Minnesota Tax and Aid
Anticipation Borrowing Program GTD), 3/3/1998
7,446,612
1,105,000 White Bear, MN Weekly VRDNs (Thermoform Plastic, Inc.)/(Norwest
Bank Minnesota, Minneapolis LOC)
1,105,000
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 2,165,000 White Bear, MN, Variable Rate Demand Industrial Revenue Bonds
Weekly VRDNs (N.A. Ternes Project)/(Firstar Bank, Minnesota LOC) $
2,165,000
2,000,000 Winsted, MN IDA Weekly VRDNs (Sterner Lighting
Systems)/(Fleet National Bank, Providence, RI
LOC)
2,000,000
3,900,000 (b)Woodbury, MN, Series B, 4.00% TOBs (Allina
Health System, MN), Optional Tender 7/1/1997
3,900,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $
409,135,927
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 33.6%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
100.00% 0.00%
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $47,491,000 which represents 11.6% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($410,712,588) at April 30, 1997.
The following acronyms are used throughout this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation CDA --
Community Development Administration COL -- Collateralized CP --
Commercial Paper FSA -- Financial Security Assurance GNMA --
Government National Mortgage Association GO -- General Obligation GTD
- -- Guaranty HFA -- Housing Finance Authority IDA -- Industrial
Development Authority 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 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
(See Notes which are an integral part of the Financial Statements)
MINNESOTA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $409,135,927
Income receivable 3,672,353
Total assets 412,808,280
LIABILITIES:
Income distribution payable $1,212,017
Payable to Bank 789,249
Accrued expenses 94,426
Total liabilities 2,095,692
NET ASSETS for 410,712,588 shares outstanding $410,712,588
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$218,985,964 / 218,985,964 shares outstanding $1.00
CASH SERIES SHARES:
$191,726,624 / 191,726,624 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 8,138,299
EXPENSES:
Investment advisory fee $ 905,489
Administrative personnel and services fee 170,932
Custodian fees 22,664
Transfer and dividend disbursing agent fees and expenses 74,020
Directors'/Trustees' fees 2,511
Auditing fees 6,697
Legal fees 1,365
Portfolio accounting fees 50,793
Distribution services fee -- Cash Series Shares 573,675
Shareholder services fee -- Institutional Shares 279,093
Shareholder services fee -- Cash Series Shares 286,837
Share registration costs 11,791
Printing and postage 8,700
Insurance premiums 3,844
Miscellaneous 2,511
Total expenses 2,400,922
Waivers --
Waiver of investment advisory fee $ (575,409) Waiver of
distribution services fee -- Cash Series Shares (286,837) Waiver
of shareholder services fee -- Institutional Shares (279,093)
Total waivers (1,141,339)
Net expenses 1,259,583
Net investment income $ 6,878,716
</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, OCTOBER 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 6,878,716 $ 12,971,151
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (3,677,900) (7,706,768)
Cash Series Shares (3,200,816) (5,264,383)
Change in net assets resulting from distributions
to shareholders (6,878,716) (12,971,151)
SHARE TRANSACTIONS --
Proceeds from sale of shares 584,594,930 1,294,216,493
Net asset value of shares issued to shareholders in payment
of distributions declared 2,721,164 5,465,115
Cost of shares redeemed (629,660,699) (1,190,487,756)
Change in net assets resulting from share transactions (42,344,605) 109,193,852
Change in net assets (42,344,605) 109,193,852
NET ASSETS:
Beginning of period 453,057,193 343,863,341
End of period $ 410,712,588 $ 453,057,193
</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)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993 1992 1991
1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00
INCOME FROM
INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.04 0.03 0.02 0.03
0.05 0.01
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (0.04) (0.03) (0.02) (0.03)
(0.05) (0.01)
NET ASSET VALUE, END OF $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00
PERIOD
TOTAL RETURN(B) 1.65% 3.49% 3.82% 2.58% 2.43% 3.19%
4.89% 0.90%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30%* 0.30% 0.30% 0.31% 0.31% 0.31%
0.30% 0.01%*
Net investment income 3.29%* 3.43% 3.77% 2.55% 2.40% 3.10%
4.73% 6.45%*
Expense waiver/
reimbursement(c) 0.50%* 0.51% 0.52% 0.34% 0.34% 0.33%
0.43% 0.69%*
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $218,986 $217,443 $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)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993 1992
1991(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 0.01 0.03 0.03 0.02 0.02
0.03 0.04
LESS DISTRIBUTIONS
Distributions from net
investment income (0.01) (0.03) (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 $ 1.00
TOTAL RETURN(B) 1.40% 2.97% 3.41% 2.17% 2.02%
2.78% 3.60%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.80%* 0.80% 0.70% 0.71% 0.71%
0.71% 0.64%*
Net investment income 2.79%* 2.93% 3.37% 2.15% 2.01%
2.75% 4.11%*
Expense waiver/reimbursement(c) 0.50%* 0.51% 0.62% 0.61% 0.44%
0.44% 0.59%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $191,727 $235,614 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Minnesota Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund 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.
RESTRICTED SECURITIES -- Restricted securities are securities that may
only be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such
restricted securities may be determined to be liquid under criteria
established by the Board of Trustees (the "Trustees"). The Fund will
not incur any registration costs upon such resales. Restricted
securities are valued at amortized cost in accordance with Rule 2a-7
under the Act. Additional information on each restricted security held
at April 30, 1997 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Dakota County & Washington County, MN Housing &
Redevelopment Authority, MERLOTS (Series J) 03/01/97 $10,745,000
Dakota County, MN Housing & Redevelopment Authority 03/01/97 1,555,000
Dakota County, Washington County & Anoka City,
MN Housing & Redevelopment Authority,
MERLOTS - Series H 03/01/97 3,000,000
Forest Lake, MN, Series A 04/01/97 3,300,000
MN Insured Municipal Securities Trust, Series 1996A,
Floating Rate Certificates (Eden Prairie MN, ISD 272) 02/01/96 1,000,000
MN Insured Municipal Securities Trust, Series 1996B,
Floating Rate Certificates (Eden Prairie MN, ISD 272) 02/01/96 1,125,000
MN Insured Municipal Securities Trust, Series 1996H,
Floating Rate Certificates (St. Louis Park, MN, Health
Care Facilities) 03/29/96 2,500,000
MN Municipal Securities Trust, Series 1996F, Floating
Rate Certificates (Benedictine Health System) 08/15/96 5,000,000
MN Municipal Securities Trust, Series 1996H,
Floating Rate Certificates (Rosemount, MN ISD 196) 04/01/96 4,000,000
MN Municipal Securities Trusts, Series 1996D,
Floating Rate Certificates (North St. Paul - Maplewood,
MN ISD 622) 03/01/96 2,250,000
Minneapolis/St. Paul MN Housing Finance Board,
SFM Revenue Bonds TOBs 11/01/96 991,000
Minneapolis/St. Paul MN Housing Finance Board,
SFM Revenue Bonds, MERLOTS (Series D) 04/01/97 4,020,000
St. Cloud, MN Housing & Redevelopment Authority,
Revenue Refunding Bonds (Series 1994A) 12/01/94 1,450,000
St. Cloud, MN Housing & Redevelopment Authority,
Revenue Refunding Bonds (Series 1994B) 12/01/94 2,655,000
Woodbury, MN, Series B 04/01/97 3,900,000
</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, 1997, capital
paid-in aggregated $410,712,588.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX-MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SHARES 1997 1996
<S> <C> <C>
Shares sold 290,947,827 547,719,129
Shares issued to shareholders in payment of distributions declared 101,010 301,311
Shares redeemed (289,505,917) (542,969,267)
Net change resulting from Institutional Share transactions 1,542,920 5,051,173
<CAPTION>
SIX-MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
CASH SERIES SHARES 1997 1996
<S> <C> <C>
Shares sold 293,647,103 746,497,364
Shares issued to shareholders in payment of distributions declared 2,620,154 5,163,804
Shares redeemed (340,154,782) (647,518,489)
Net change resulting from Cash Series Share transactions (43,887,525) 104,142,679
Net change resulting from share transactions (42,344,605) 109,193,852
</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. 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 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.
For the period ended April 30, 1997, the Institutional Shares fully
waived its shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ,
through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of
the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997, 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 $273,766,130 and $291,745,000,
respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 62.4% 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 percentage of investments
insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 8.0% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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.
MINNESOTA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
314229873
314229402
1052807 (6/97)
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, 1996, through April
30, 1997. 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 keep your ready cash 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. At the end of the
reporting period, the fund's holdings were diversified among issuers
that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share for Institutional Shares and $0.01 per share
for Institutional Service Shares. The fund's net assets stood at $157
million at the end of the reporting period.
Thank you for relying on New Jersey Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about the future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February, and
by the time of the Fed tightening in late March, had built in much of
the expectations regarding the Fed decision. In April, the financial
markets continued to focus on the likelihood of an additional
tightening move later in May, causing short-term yields to rise even
further. Yields on the six-month Treasury bill rose sharply over this
interim period, moving from a low of 5.20% in mid-February to a high
of 5.68% in late April before falling back to 5.53% by the end of
reporting period.
Q What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 54 days, reflecting a neutral outlook on the
direction of interest rates. As the signs of strength in the economy
became more apparent, and as expectation of an imminent Fed tightening
increased in the first quarter of 1997 we emphasized the purchase of
shorter term fixed-rate paper while maintaining approximately 70% of
the portfolio in seven-day variable rate demand notes ("VRDNs").
Seven-day VRDNs provide more portfolio responsiveness to interest rate
increases. We are now targeting an average maturity range between 45
and 55 days.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month New Jersey
fixed rate notes. This portfolio structure takes advantage of the
steepness of the yield curve and continues to pursue a competitive
yield over time.
Q How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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 rose
over the reporting period. For the fund, the seven-day net yield of
the Institutional Shares on April 30, 1997, was 3.65%, compared to
3.04% at the beginning of the reporting period.* For the Institutional
Service Shares, the seven-day net yield was 3.55%, at the end of the
reporting period compared to 2.94% six months ago.*
Q Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and annualized.
NEW JERSEY MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- 99.1%
NEW JERSEY -- 99.1%
$ 700,000 Atlantic County, NJ Improvement Authority Weekly VRDNs (Marine
Midland Bank N.A., Buffalo, NY
LOC) $ 700,000
1,255,000 Atlantic Highlands, NJ, 4.125% BANs,
12/29/1997 1,258,405
1,258,375 Berkeley Township, NJ, 4.25% BANs,
5/28/1997 1,258,688
1,625,000 Bordentown, NJ, 4.50% BANs,
6/24/1997 1,625,808
1,800,000 Camden County, NJ Improvement Authority, (Series 1995) Weekly VRDNs
(Jewish Federation of Southern Jersey, Inc.)/(National Westminster Bank,
PLC, London
LOC) 1,800,000
4,900,000 (b)Camden County, NJ Improvement Authority, (Series 1996) Weekly
VRDNs (Parkview Redevelopment Housing Project)/(General Electric
Capital Corp.
LOC) 4,900,000
2,925,000 Cape May, NJ, 4.00% BANs,
8/21/1997 2,926,740
4,940,000 (b)Clipper New Jersey Tax-Exempt Trust, (Series
1996-2) Weekly VRDNs (New Jersey Housing &
Mortgage Financing Authority)/(MBIA Corporation
INS)/(State Street Bank and Trust Co.
LIQ) 4,940,000
1,099,900 Colts Neck Township, NJ, (Series 1997A), 4.00% BANs,
2/27/1998 1,102,495
950,000 Ewing Township, NJ, 3.90% BANs,
10/24/1997 951,347
1,256,000 Ewing Township, NJ, 4.25% BANs,
10/24/1997 1,258,321
929,740 Fairfield Township, NJ, 3.89% BANs,
11/6/1997 930,619
1,256,000 Green Township, NJ, 4.00% BANs,
1/22/1998 1,257,318
1,275,000 Hammonton, NJ, 4.00% BANs,
11/26/1997 1,277,108
1,041,378 High Bridge Borough, NJ, 4.50% BANs,
9/5/1997 1,043,118
3,884,515 Jefferson Township, NJ, (Series 1997A), 4.00% BANs,
2/20/1998 3,893,588
3,000,000 Lower Township, NJ, 4.50% BANs,
6/27/1997 3,001,574
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW JERSEY -- CONTINUED
$ 3,835,500 Mahwah Township, NJ, 4.25% BANs,
8/22/1997 $ 3,839,490
1,800,000 Manchester Township, NJ, (Series 1996C), 4.25% BANs,
11/26/1997 1,804,961
1,000,000 Mercer County, NJ Improvement Authority Weekly VRDNs
(Mercer County, NJ Pooled Governmental Loan Program)/
(Credit Suisse, Zurich
LOC) 1,000,000
1,500,000 Middlesex County, NJ PCFA Weekly VRDNs (FMC Gold Co.)/
(Wachovia Bank of NC, NA, Winston-Salem
LOC) 1,500,000
1,200,000 New Brunswick, NJ, 3.875% BANs,
12/23/1997 1,201,303
9,800,000 New Jersey EDA Weekly VRDNs (Center-For-Aging - Applewood
Estates)/(Banque Paribas, Paris
LOC) 9,800,000
2,500,000 New Jersey EDA Weekly VRDNs (Franciscan Oaks)/(Bank of Scotland,
Edinburgh
LOC) 2,500,000
5,468,000 New Jersey EDA Weekly VRDNs (Meridan Health Care)/(First National
Bank of Maryland, Baltimore
LOC) 5,468,000
4,173,000 New Jersey EDA Weekly VRDNs (Molins Machines)/(Nationsbank, N.A.,
Charlotte
LOC) 4,173,000
1,075,000 New Jersey EDA Weekly VRDNs (Nash Group)/(Chase Manhattan
Bank N.A., New York
LOC) 1,075,000
5,200,000 New Jersey EDA Weekly VRDNs (YM-YWHA of Bergen County, NJ)/
(Bank of New York, New York
LOC) 5,200,000
1,440,000 New Jersey EDA, (1994 Series A), 4.30% TOBs (A.F.L. Quality, Inc.)/
(Fleet Bank. N.A. LOC), Optional Tender
6/30/1997 1,440,000
500,000 New Jersey EDA, (1994 Series B), 4.30% TOBs (Two Univac, L.L.C.)/
(Fleet Bank. N.A. LOC), Optional Tender
6/30/1997 500,000
2,300,000 New Jersey EDA, (Series 1984) Weekly VRDNs (Burmah-Castrol Inc.
Project)/(Barclays Bank PLC, London
LOC) 2,300,000
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW JERSEY -- CONTINUED
$ 4,100,000 New Jersey EDA, (Series 1985) Weekly VRDNs (Seton Co.)/(First Union
National Bank, Charlotte, NC
LOC) $ 4,100,000
4,000,000 New Jersey EDA, (Series 1986) Weekly VRDNs (Ridgefield Associates)/
(Bank of Tokyo-Mitsubishi Ltd.
LOC) 4,000,000
300,000 New Jersey EDA, (Series 1987G) Weekly VRDNs (W.Y. Urban Renewal)/
(National Westminster Bank, PLC, London
LOC) 300,000
2,100,000 New Jersey EDA, (Series 1988-F) Weekly VRDNs (Lamington Corners
Associates)/(First Union National Bank, North
LOC) 2,100,000
1,030,000 New Jersey EDA, (Series 1992 Z) Weekly VRDNs (West-Ward
Pharmaceuticals)/(Banque Nationale de Paris
LOC) 1,030,000
1,040,000 New Jersey EDA, (Series 1992D-1) Weekly VRDNs (Danlin Corp.)/
(Banque Nationale de Paris
LOC) 1,040,000
2,105,000 New Jersey EDA, (Series 1992I-1) Weekly VRDNs (Geshem Realty)/
(Banque Nationale de Paris
LOC) 2,105,000
335,000 New Jersey EDA, (Series 1992L) Weekly VRDNs (Kent Place School)/
(Banque Nationale de Paris
LOC) 335,000
1,500,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Filtra Corporation
Project)/(Chase Manhattan Bank N.A., New York
LOC) 1,500,000
5,300,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Hillcrest Health Service
System, Inc.)/(Industrial Bank of Japan Ltd., Tokyo
LOC) 5,300,000
3,000,000 New Jersey EDA, (Series 1995) Weekly VRDNs (International Vitamin
Corporation Project)/(National Westminster Bank, PLC, London
LOC) 3,000,000
1,100,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Manhattan Bagel Co., Inc.)/
(First Union National Bank, North
LOC) 1,100,000
5,115,000 New Jersey EDA, (Series 1996) Weekly VRDNs (R. Realty Company)/
(First Union National Bank, Charlotte, NC
LOC) 5,115,000
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW JERSEY -- CONTINUED
$ 2,585,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Wood Hollow Associates,
L.L.C.)/(Corestates Bank N.A., Philadelphia, PA
LOC) $ 2,585,000
2,165,000 New Jersey EDA, (Series A) Weekly VRDNs (325 Midland Avenue, LLC &
Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York
LOC) 2,165,000
950,000 New Jersey EDA, (Series B) Weekly VRDNs (Greater Trenton CMHC, Inc.)/
(Corestates N.J. National Bank, Ewing Twp.
LOC) 950,000
900,000 New Jersey EDA, (Series D-1) Weekly VRDNs (The Hibbert Company)/
(Corestates N.J. National Bank, Ewing Twp.
LOC) 900,000
810,000 New Jersey EDA, (Series W) Weekly VRDNs (Datatec Industries, Inc.)/
(Banque Nationale de Paris
LOC) 810,000
2,815,000 New Jersey EDA, Economic Development Bonds Weekly VRDNs (Atlantic
States Cast Iron Pipe Company)/(Amsouth Bank N.A., Birmingham
LOC) 2,815,000
1,300,000 New Jersey EDA, Economic Development Bonds, 1987 Project Weekly
VRDNs (United Jewish Community of Bergen County)/(Bank of New
York, New York
LOC) 1,300,000
4,800,000 New Jersey EDA, Port Facility Revenue Bonds (Series 1983) Weekly
VRDNs (Trailer Marine Transport Corporation)/(Chase Manhattan Bank
N.A., New York
LOC) 4,800,000
5,500,000 (b)New Jersey Housing & Mortgage Financing
Authority, CDC Municipal Products Class A
Certificates (Series 1996B) Weekly VRDNs (MBIA
Corporation INS)/(CDC Municipal Products, Inc.
LIQ) 5,500,000
2,500,000 New Jersey State, (Series 1997A), 3.55% CP (Union Bank of Switzerland,
Zurich LIQ), Mandatory Tender
5/27/1997 2,500,000
4,000,000 New Jersey State, (Series 1997A), 3.70% CP (Union Bank of Switzerland,
Zurich LIQ), Mandatory Tender
5/22/1997 4,000,000
1,250,000 Passaic County, NJ Utilities Authority, (Series 1996B), 3.95% BANs (MBIA
Corporation INS),
9/3/1997 1,250,000
1,490,000 Pine Hill Borough, NJ, (Series A), 4.14% BANs,
8/7/1997 1,490,538
1,250,000 Pine Hill Borough, NJ, 3.99% BANs,
8/8/1997 1,250,130
1,135,873 Point Pleasant, NJ, 4.375% BANs,
10/3/1997 1,137,610
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW JERSEY -- CONTINUED
$ 10,000,000 Port Authority of New York and New Jersey, (Series 1991-4)
Weekly
VRDNs $ 10,000,000
4,322,655 Washington Borough, NJ, 4.00% BANs,
12/12/1997 4,330,350
833,132 Washington Township, NJ, 4.25% BANs,
12/19/1997 835,410
TOTAL INVESTMENTS (AT AMORTIZED
COST)(C) $ 155,570,921
</TABLE>
Securities that are subject to Alternative Minimum Tax represent
29.6% of the portfolio as calculated based upon total portfolio
market value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At January 31, 1997, the portfolio securities were rated as
follows:
Tier Rating Percent Based on Total Market Value
FIRST TIER SECOND TIER
94.48% 5.52%
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $15,340,000 which represents 9.8% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($156,964,572) at April 30, 1997.
The following acronyms are used throughout this portfolio:
BANs -- Bond Anticipation Notes CP -- Commercial Paper EDA -- Economic
Development Authority INS -- Insured LIQ -- Liquidity Agreement LOC --
Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCFA -- Pollution Control Finance Authority
PLC -- Public Limited Company
TOBs -- Tender Option Bonds
VRDNs -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
NEW JERSEY MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $
155,570,921
Cash
456,942
Income receivable
1,367,355
Total assets
157,395,218
LIABILITIES:
Income distribution payable $ 400,719
Accrued expenses 29,927
Total liabilities
430,646
NET ASSETS for 156,964,572 shares outstanding $
156,964,572
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$116,024,518 / 116,024,518 shares
outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$40,940,054 / 40,940,054 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $
2,876,345
EXPENSES:
Investment advisory fee $ 320,869
Administrative personnel and services fee 76,819
Custodian fees 6,906
Transfer and dividend disbursing agent fees and expenses 22,513
Directors'/Trustees' fees 1,048
Auditing fees 7,136
Legal fees 4,649
Portfolio accounting fees 29,802
Distribution services fee -- Institutional Service Shares 15,324
Shareholder services fee -- Institutional Shares 162,261
Shareholder services fee -- Institutional Service Shares 38,309
Share registration costs 9,999
Printing and postage 7,289
Insurance premiums 3,124
Taxes 1,381
Miscellaneous 2,049
Total expenses 709,478
Waivers --
Waiver of investment advisory fee $ (88,970)
Waiver of distribution services fee -- Institutional Service (15,324)
Shares
Waiver of shareholder services fee -- Institutional Shares (129,809)
Waiver of shareholder services fee -- Institutional Service (15,324)
Shares
Total waivers (249,427)
Net expenses
460,051
Net investment income $
2,416,294
</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,
OCTOBER 31,
1997
1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 2,416,294 $
3,903,742
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (1,965,367)
(3,146,674)
Institutional Service Shares (450,927)
(757,068)
Change in net assets resulting from distributions to shareholders (2,416,294)
(3,903,742)
SHARE TRANSACTIONS --
Proceeds from sale of shares 259,544,342
416,887,554
Net asset value of shares issued to shareholders in payment of
distributions declared 464,840
630,451
Cost of shares redeemed (247,573,501)
(389,750,630)
Change in net assets resulting from share transactions 12,435,681
27,767,375
Change in net assets 12,435,681
27,767,375
NET ASSETS:
Beginning of period 144,528,891
116,761,516
End of period $ 156,964,572 $
144,528,891
</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
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993** 1992
1991(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 0.03 0.02 0.02 0.03
0.04
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (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 $
1.00
TOTAL RETURN(B) 1.51% 3.17% 3.46% 2.26% 2.22% 2.96%
3.87%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.55% 0.55% 0.54% 0.46% 0.45%
0.27%*
Net investment income 3.03%* 3.13% 3.41% 2.22% 2.19% 2.86%
4.19%*
Expense waiver/reimbursement(c) 0.31%* 0.37% 0.41% 0.39% 0.45% 0.51%
0.67%*
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $116,025 $115,722 $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
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993 1992 1991(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 0.01 0.03 0.03 0.02 0.02 0.03 0.04
LESS DISTRIBUTIONS
Distributions from net
investment income (0.01) (0.03) (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 $ 1.00
TOTAL RETURN(B) 1.46% 3.07% 3.36% 2.16% 2.12% 2.86% 3.82%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.65%* 0.65% 0.65% 0.65% 0.56% 0.55%
0.35%*
Net investment income 2.94%* 3.03% 3.28% 2.19% 2.08% 2.69%
4.11%*
Expense waiver/reimbursement(c) 0.31%* 0.37% 0.41% 0.41% 0.45% 0.51%
0.69%*
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $40,940 $28,807 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
New Jersey Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund 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 imposed upon
non-corporate taxpayers 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.
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.
RESTRICTED SECURITIES -- Restricted securities are securities that
may only be resold upon registration under federal securities laws
or in transactions exempt from such registration. Many restricted
securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities
may be resold without registration upon exercise of a demand
feature. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees (the
"Trustees"). The Fund will not incur any registration costs upon
such resales. Restricted securities are valued at amortized cost in
accordance with Rule 2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at April 30,
1997 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Camden County NJ,
Improvement Authority 7/10/1996 $4,900,000
Clipper New Jersey Tax-Exempt Trust 5/1/1996 4,940,000
New Jersey Housing & Mortgage
Financing Authority 7/24/1996 - 2/20/1997 5,500,000
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, 1997, capital
paid-in aggregated $156,964,572.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED
INSTITUTIONAL SHARES APRIL 30, 1997 OCTOBER
31, 1996
<S> <C> <C>
Shares sold 201,567,886
334,848,832
Shares issued to shareholders in payment of distributions declared 256,832
218,331
Shares redeemed (201,522,203)
(306,289,398)
Net change resulting from Institutional Share transactions 302,515
28,777,765
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1997 OCTOBER
31, 1996
<S> <C> <C>
Shares sold 57,976,456
82,038,722
Shares issued to shareholders in payment of distributions declared 208,008
412,120
Shares redeemed (46,051,298)
(83,461,232)
Net change resulting from Institutional Service
Share transactions 12,133,166
(1,010,390)
Net change resulting from share transactions 12,435,681
27,767,375
</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. 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 reimburse Federated Securities
Corp., ("FSC") the principal distributor, from the net assets of the
Fund to finance activities intended to result in the sale of the
Fund's Institutional Service Shares. The Plan provides that the Fund
may incur distribution expenses up to 0.10% of the average daily net
assets of the Institutional Service Shares, annually, to reimburse
FSC. The distributor may voluntarily choose to waive any portion of
its fee. The distributor can modify or terminate this voluntary
waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder
Services Agreement with Federated Shareholder Services, ("FSS") the
Fund will pay FSS up to 0.25% of average daily 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $157,750,000 and
$142,395,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997,
65.2% 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
percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
8.0% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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, 1997
Cusip 314229600
Cusip 314229709
2052902 (6/97)
[Graphic]
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, 1996, through April 30,
1997. 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, Cash II Shares, and Institutional
Shares.
The fund is a convenient way to keep your ready cash 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. At the end of the reporting
period, the fund's holdings were diversified among issuers that use
municipal bond financing for projects as varied as health care,
housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
of $0.02 per share for Institutional Service Shares, $0.01 per share
for Cash II Shares, and $0.02 per share for Institutional Shares. The
fund's net assets stood at $304.5 million at the end of the reporting
period.
Thank you for relying on Ohio Municipal Cash Trust to help your ready
cash pursue tax-free income everyday. As always, we'll continue to
provide you with the highest level of professional service. We invite
your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until the end of the fund's semi-annual
reporting period, the Federal Reserve Board (the "Fed") brought
about the first change in monetary policy in over a year. On March
25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%.
The move was viewed as being pre-emptive against the threat of
future inflationary pressures possibly brought about by tight labor
market conditions. Until that point, movements in interest rates
reflected shifting market sentiment about the need for the Fed to
move to a more restrictive policy. As the reporting period began in
November 1996, the economy had been showing signs of slowing,
thereby allaying the market's fears about inflation. Then, in
December, the market's uneasiness was once more ignited as a string
of economic statistics showed stronger growth and Fed Chairman Alan
Greenspan made cautionary statements regarding inflation and
"irrational exuberance" in the equity market. With inflation still
appearing to be benign, the market tolerated a steady pace of growth
into early 1997. However, Chairman Greenspan's Humphrey-Hawkins
testimony before Congress in late February marked a turning point
for the short-term money markets -- indeed the bond and equity
markets as well -- as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal
in interest rate movement and the market's perception about future
Fed policy. The ensuing weeks brought continued evidence of
persistent strength, and culminated in the Fed's action at the
Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February,
and by the time of the Fed tightening in late March, had built in
much of the expectations regarding the Fed decision. In April, the
financial markets continued to focus on the likelihood of an
additional tightening move later in May, causing short-term yields
to rise even further. Yields on the six-month Treasury bill rose
sharply over this interim period, moving from a low of 5.20% in
mid-February to a high of 5.68% in late April before falling back to
5.53% by the end of reporting period.
Q What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 54 days, reflecting a neutral outlook on the
direction of interest rates. As the signs of strength in the economy
became more apparent, and as expectation of an imminent Fed
tightening grew in the first quarter of 1997, we emphasized the
purchase of shorter term fixed-rate paper while maintaining
approximately 70% of the portfolio in seven-day variable rate demand
notes ("VRDNs"). Seven-day VRDNs provide more portfolio
responsiveness to interest rate increases. We are now targeting an
average maturity range between 50 and 60 days.
Once an average maturity range is targeted, the portfolio attempts
to maximize performance through ongoing relative value analysis.
Relative value analysis includes the comparison of the richness or
cheapness of municipal securities to one another as well as
municipals to taxable instruments, such as Treasury securities. The
fund's portfolio remained barbelled in structure, which combined a
significant portion in seven-day variable rate demand notes and
short maturity commercial paper with purchases of longer-term, six-
to twelve-month Ohio fixed rate notes. This portfolio structure
takes advantage of the steepness of the yield curve and continues to
pursue a competitive yield over time.
Q How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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 rose
over the reporting period. For the fund, the seven-day net yield of
the Institutional Service Shares on April 30, 1997 was 3.80%
compared to 3.16% at the beginning of the reporting period.* For the
Cash II Shares, the seven-day net yield was 3.50%, at the end of the
period compared to 2.86% six months ago.* For the Institutional
Shares, the seven-day yield was 4.00% on April 30, 1997, compared to
3.36% on November 1, 1996.*
Q Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move
by the Fed should help to preclude the need for more aggressive
action down the road by preventing the buildup of inflationary
pressures. We would look to see moderately higher short-term
interest rates throughout the course of the year, but not to the
extent evidenced in the last tightening cycle in 1994. As such, we
will likely continue in our modestly defensive stance for the
portfolio until market conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
OHIO MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- 99.2%
OHIO -- 99.2%
$ 575,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs (Visiting
Nurses)/(National City Bank, Cleveland, OH LOC) $ 575,000
2,535,000 Ashland County, OH Health Care Weekly VRDNs (Brethren Care, Inc.)/
(National City Bank, Cleveland, OH LOC) 2,535,000
1,800,000 Belmont County, OH, 3.96% BANs, 10/1/1997 1,801,897
5,100,000 Berea, OH, Various Purpose, 4.10% BANs, 10/23/1997 5,102,934
1,040,000 Canfield, OH Local School District, (Series 1996), 4.50% BANs, 10/2/1997 1,041,685
3,370,000 Canton, OH, Adjustable Rate IDRB's (Series 1996) Weekly VRDNs (Alpha
Enterprises)/(KeyBank, N.A. LOC) 3,370,000
1,500,000 Cleveland Heights, OH, (Series 1996), 4.10% BANs, 8/28/1997 1,500,704
1,700,000 Clinton County, OH Hospital Authority Weekly VRDNs (Clinton
Memorial Hospital)/(National City Bank, Columbus, OH LOC) 1,700,000
1,805,000 Columbiana County, OH, Industrial Development Revenue Bonds Weekly
VRDNs (C & S Land Company Project)/(Bank One, Youngstown, NA LOC) 1,805,000
1,500,000 Conneaut, OH, Water Treatment Improvement General Limited Tax, 4.50%
BANs, 4/14/1998 1,503,418
600,000 Cuyahoga County, OH IDA Weekly VRDNs (Animal Protection League
(Cuyahoga County))/(KeyBank, N.A. LOC) 600,000
1,500,000 Cuyahoga County, OH IDA Weekly VRDNs (East Park Community, Inc.)/
(KeyBank, N.A. LOC) 1,500,000
370,000 Cuyahoga County, OH IDA Weekly VRDNs (Interstate Diesel Service, Inc.)/
(Huntington National Bank, Columbus, OH LOC) 370,000
640,000 Cuyahoga County, OH IDA Weekly VRDNs (Parma-Commerce Parkway
West)/(KeyBank, N.A. LOC) 640,000
950,000 Cuyahoga County, OH IDA Weekly VRDNs (Premier Manufacturing
Corp.)/(National City Bank, Kentucky LOC) 950,000
1,885,000 Cuyahoga County, OH IDA, IDRB (Series 1995) Weekly VRDNs (Avalon
Precision Casting Co. Project)/(KeyBank, N.A. LOC) 1,885,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 4,000,000 Dayton, OH, Airport Improvement BAN's (Series 1996), 3.80% BANs,
12/16/1997 $ 4,003,891
1,585,000 Delaware County, OH, IDRB (Series 1995) Weekly VRDNs (Air Waves, Inc.
Project)/(KeyBank, N.A. LOC) 1,585,000
2,000,000 Elyria, OH, Police Station Improvement Notes, (Series 1997), 4.00% BANs,
12/4/1997 2,002,876
3,300,000 Elyria, OH, Various Purpose Improvement Notes, (Series 1996-2), 4.20%
BANs, 9/25/1997 3,302,552
1,000,000 Finneytown, OH LSD, 4.375% BANs, 7/17/1997 1,001,523
4,500,000 Franklin County, OH IDA Weekly VRDNs (Heekin Can, Inc.)/(PNC Bank,
Ohio, N.A. LOC) 4,500,000
2,940,000 Franklin County, OH IDA Weekly VRDNs (Unicorn Leasing Corp.)/(Fifth
Third Bank, Cincinnati LOC) 2,940,000
3,490,000 Franklin County, OH IDA, (Series 1995) Weekly VRDNs (Fabcon L.L.C.
Project)/(Norwest Bank Minnesota, Minneapolis LOC) 3,490,000
4,900,000 Franklin County, OH IDA, Adjustable Rate Demand IDRB's (Series 1996A)
Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank,
Columbus, OH LOC) 4,900,000
2,100,000 Franklin County, OH IDA, Adjustable Rate Demand IDRB's (Series 1996B)
Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus,
OH LOC) 2,100,000
4,000,000 Franklin County, OH IDA, IDRB Weekly VRDNs (Tigerpoly
Manufacturing, Inc.)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 4,000,000
2,090,000 Franklin County, OH, Adjustable Rate Demand Economic Development
Revenue Refunding Bonds (Series 1996) Weekly VRDNs (CPM
Investments)/(Huntington National Bank, Columbus, OH LOC) 2,090,000
1,395,000 Franklin, OH County of, Health Care Facilities Revenue Bonds (Series
1994) Weekly VRDNs (Wesley Glenn, Inc.)/(Fifth Third Bancorp LOC) 1,395,000
1,635,000 Greene County, OH, Various Purpose Certificates of Indebtedness, 4.00%
BANs, 12/11/1997 1,638,295
2,000,000 Hamilton County, OH Health System Weekly VRDNs (West Park
Community)/(Fifth Third Bank, Cincinnati LOC) 2,000,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 1,725,000 Hancock County, OH, (Series A), 4.50% BANs, 9/19/1997 $ 1,728,199
7,500,000 Henry County Ohio, Series 1996 Automatic Feed Project Weekly VRDNs
(Huntington National Bank, Columbus, OH LOC) 7,500,000
2,400,000 Highland Heights City, OH, 3.97% BANs, 12/18/1997 2,403,220
4,000,000 Hilliard, OH, Adjustable Rate IDRB's (Series 1996) Weekly VRDNs (Medex,
Inc.)/(Bank One, Columbus, N.A. LOC) 4,000,000
2,000,000 Holmes County, OH IDA Weekly VRDNs (Poultry Processing)/(Rabobank
Nederland, Utrecht LOC) 2,000,000
1,970,000 Holmes County, OH, Sanitary Sewer System Improvement Notes, 4.25%
BANs, 5/21/1997 1,970,259
1,430,600 Huber Heights, OH, 4.00% BANs, 1/23/1998 1,433,622
1,195,000 Huber Heights, OH, IDRB (Series 1994) Weekly VRDNs (Lasermike, Inc.
Project)/(KeyBank, N.A. LOC) 1,195,000
1,357,000 Huron City, OH, Various Purpose General Ltd Tax, 4.10% BANs, 2/25/1998 1,360,759
1,200,000 Kent, OH, Adjustable Rate IDRB's (Series 1994) Weekly VRDNs (Raven's
Metal Products, Inc. Project)/(First National Bank of Ohio, Akron LOC) 1,200,000
1,000,000 Lake County, OH, 4.00% BANs, 3/12/1998 1,002,071
3,300,000 Lake County, OH, Adjustable Rate IDRB's (Series 1996) Weekly VRDNs
(Apsco Properties, LTD.)/(First National Bank of Ohio, Akron LOC) 3,300,000
3,000,000 Lorain County, OH, 4.40% BANs, 9/19/1997 3,004,451
4,190,000 Lorain Port Authority, OH, (Series 1994) Weekly VRDNs (Spitzer Great
Lakes Ltd., Inc.)/(Bank One, Cleveland, N.A. LOC) 4,190,000
1,240,000 Lorain Port Authority, OH, Adjustable Rate Demand Port Development
Refunding Revenue Bonds (Series 1996) Weekly VRDNs (Spitzer Project)/
(Bank One, Cleveland, N.A. LOC) 1,240,000
305,000 Lorain Port Authority, OH, IDRB (Series 1996) Weekly VRDNs (Brush
Wellman, Inc.)/(National City Bank, Cleveland, OH LOC) 305,000
800,000 Lucas County, OH IDA Weekly VRDNs (Kuhlman Corp.)/(KeyBank, N.A.
LOC) 800,000
2,000,000 Lucas County, OH IDA, (Series 1991) Weekly VRDNs (Ohio Citizens Bank)/
(National City Bank, Cleveland, OH LOC) 2,000,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 1,775,000 Lucas County, OH, Hospital Facility Improvement Revenue Bonds
(Series 93) Weekly VRDNs (Lott Industries, Inc.)/(National City Bank,
Cleveland, OH LOC) $ 1,775,000
245,000 Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs
(Sunshine Children's Home)/(National City Bank, Cleveland, OH LOC) 245,000
2,000,000 Lucas County, OH, Hospital Refunding Revenue Bonds Weekly VRDNs
(Riverside Hospital, OH)/(Huntington National Bank, Columbus, OH LOC) 2,000,000
5,300,000 Lucas County, OH, Sewer Improvement, 4.25% BANs, 10/28/1997 5,308,024
1,000,000 Lyndhurst, OH, 4.00% BANs, 3/18/1998 1,001,689
5,325,000 Mahoning County, OH Multifamily HFA Weekly VRDNs (International
Towers, Inc.)/(PNC Bank, Ohio, N.A. LOC) 5,325,000
715,000 Mansfield, OH, IDR Weekly VRDNs (Designed Metal Products, Inc.)/(Bank
One, Columbus, N.A. LOC) 715,000
3,750,000 Medina County, OH, 4.50% BANs, 8/28/1997 3,756,461
5,400,000 Medina County, OH, Solid Waste Disposal Revenue Bonds (Series 1995)
Weekly VRDNs (Valley City Steel Company Project)/(KeyBank, N.A. LOC) 5,400,000
4,990,000 Mentor, OH, LT. GO. Series 1996, 4.00% BANs, 9/4/1997 4,996,701
500,000 Montgomery County, OH Health Facilities Authority, (Series 1995) Weekly
VRDNs (Sisters of Charity Health Care System)/(Toronto-Dominion Bank
LIQ) 500,000
2,020,000 Montgomery County, OH, Adjustable Rate Economic Development
Revenue Refunding Bonds (Series 1997) Weekly VRDNs (Cross Country
Inns, Inc.)/(Bank One, Columbus, N.A. LOC) 2,020,000
1,970,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank, Columbus, OH LOC) 1,970,000
320,000 North Olmsted, OH IDA Weekly VRDNs (Bryant & Stratton)/(KeyBank,
N.A. LOC) 320,000
915,000 North Olmsted, OH IDA, 3.80% TOBs (Therm-All)/(National City Bank,
Cleveland, OH LOC), Optional Tender 8/1/1997 915,000
1,295,000 Ohio HFA Weekly VRDNs (Westchester Village)/(KeyBank, N.A. LOC) 1,295,000
2,005,000 Ohio HFA, (CR-18), (Series 1988A), 3.90% TOBs (GNMA COL)/(Citibank
N.A., New York LIQ), Optional Tender 8/1/1997 2,005,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 5,000,000 Ohio HFA, (Series 1997 A-2), 3.65% TOBs, Mandatory Tender 3/2/1998 $ 5,000,000
7,040,000 Ohio HFA, 4.25% TOBs (Lincoln Park Associates)/(Bank One, Dayton,
N.A. LOC), Optional Tender 5/1/1997 7,040,000
7,025,000 (b)Ohio HFA, Single Family Mortgage (Series PT-71) Weekly VRDNs (GNMA COL)/(Commerzbank AG,
Frankfurt LIQ) 7,025,000
4,000,000 (b)Ohio HFA, Trust Receipts (Series 1996 FR/RI-6) Weekly VRDNs (GNMA
COL)/(Bank of New York, New York LIQ) 4,000,000
3,000,000 Ohio School Districts, 1996 Cash Flow Borrowing Program Certificates of
Participation, 4.53% RANs, 6/30/1997 3,002,511
1,800,000 Ohio State Air Quality Development Authority, (Series 1988A) Weekly
VRDNs (PPG Industries, Inc.) 1,800,000
4,600,000 Ohio State Air Quality Development Authority, 3.50% CP (Cleveland
Electric Illuminating Co.)/(FGIC INS)/(FGIC Securities Purchase, Inc.
LIQ), Mandatory Tender 5/9/1997 4,600,000
1,880,000 Ohio State Higher Education Facility, Revenue Bonds Weekly VRDNs
(Notre Dame College Project)/(National City Bank, Cleveland, OH LOC) 1,880,000
2,000,000 Ohio State Water Development Authority, Ohio PCR Bonds (Series 1989)
Weekly VRDNs (Duquesne Light Power Co.)/(Barclays Bank PLC, London
LOC) 2,000,000
10,000,000 Ohio State Water Development Authority, PCR Refunding Bonds Weekly
VRDNs (General Motors Corp.) 10,000,000
3,500,000 Ohio State Water Development Authority, Pollution Control Facilities
Revenue Bonds, 3.80% TOBs (Union Bank of Switzerland, Zurich LOC),
Optional Tender 5/1/1997 3,500,000
500,000 Ohio State Weekly VRDNs (John Carroll University, OH)/(PNC Bank, N.A.
LOC) 500,000
5,000,000 Ohio State, Environmental Improvement Revenue Bonds (Series 1996)
Weekly VRDNs (Newark Group Industries, Inc.)/(Chase Manhattan Bank
N.A., New York LOC) 5,000,000
1,320,000 Ohio State, IDR (Series 1991) Weekly VRDNs (Standby Screw, Inc.)/
(National City Bank, Columbus, OH LOC) 1,320,000
1,400,000 Ohio State, IDRB (Series 1994) Weekly VRDNs (Anomatic Corporation)/
(National City Bank, Columbus, OH LOC) 1,400,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 4,900,000 Oregon City, OH, 4.15% BANs, 12/18/1997 $ 4,914,947
1,250,000 Orrville, OH IDA Weekly VRDNs (O.S. Associates/Contours, Inc.)/
(National City Bank, Cleveland, OH LOC) 1,250,000
5,560,000 Ottawa County, OH, 4.15% BANs, 4/7/1998 5,572,483
135,000 Portage County, OH IDA Weekly VRDNs (D & W Associates)/(Bank One,
Akron, N.A. LOC) 135,000
370,000 Portage County, OH IDA, 3.95% TOBs (Neidlinger)/(KeyBank, N.A. LOC),
Optional Tender 9/1/1997 370,000
4,300,000 Portage County, OH IDA, Adjustable Rate IDRB's (Series 1996) Weekly
VRDNs (Barnette Project)/(National City, Northeast LOC) 4,300,000
900,000 Portage County, OH IDA, Industries Revenue Bonds Weekly VRDNs
(Lovejoy Industries)/(Star Bank, N.A., Cincinnati LOC) 900,000
500,000 Ross County, OH, Hospital Facilities Revenue Bonds (Series 1995) Weekly
VRDNs (Medical Center Hospital Project)/(Fifth Third Bank, Cincinnati
LOC) 500,000
1,868,000 Sandusky, OH, 4.00% BANs, 11/26/1997 1,871,091
1,700,000 Seneca County, OH Hospital Facility Authority Weekly VRDNs (St. Francis
Home)/(National City Bank, Cleveland, OH LOC) 1,700,000
3,890,000 Shaker Heights, OH, 4.25% BANs, 10/17/1997 3,897,799
800,000 Sharonville, OH, IDR Weekly VRDNs (Xtek, Inc.)/(Fifth Third Bank,
Cincinnati LOC) 800,000
560,000 Solon, OH, IDR Weekly VRDNs (Graphic Laminating)/(KeyBank, N.A.
LOC) 560,000
2,000,000 Solon, OH, IDRB (Series 1995) Weekly VRDNs (Cleveland Twist Drill Company)/(NationsBank,
South LOC) 2,000,000
1,000,000 Stark County, OH IDR Weekly VRDNs (KeyBank, N.A. LOC) 1,000,000
2,180,000 Stark County, OH IDR, (Series 1994) Weekly VRDNs (Wilk of Morris)/
(KeyBank, N.A. LOC) 2,180,000
1,300,000 Stark County, OH IDR, IDRB (Series 1996) Weekly VRDNs (Foundations
Systems and Anchors, Inc. Project)/(Bank One, Akron, N.A. LOC) 1,300,000
5,300,000 Stark County, OH IDR, IDRB's (Series 1995) Weekly VRDNs (Gramac
Project, OH)/(KeyBank, N.A. LOC) 5,300,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 1,285,000 Strongsville, OH, IDRB (Series 1994) Weekly VRDNs (Nutro Machinery
Corp., Project)/(Huntington National Bank, Columbus, OH LOC) $ 1,285,000
2,500,000 Summit County, OH IDR Weekly VRDNs (Maison Aine Limited
Partnership)/(KeyBank, N.A. LOC) 2,500,000
4,500,000 Summit County, OH IDR, (Series 1994) Weekly VRDNs (Harry London
Candies, Inc.)/(Bank One, Akron, N.A. LOC) 4,500,000
875,000 Summit County, OH IDR, 3.65% TOBs (S.D. Meyers, Inc.)/(Bank One,
Akron, N.A. LOC), Optional Tender 8/15/1997 875,000
1,140,000 Summit County, OH IDR, 3.75% TOBs (Matech Machine Tool Co.)/(Bank
One, Akron, N.A. LOC), Optional Tender 8/1/1997 1,140,000
1,030,000 Summit County, OH IDR, 3.80% TOBs (Rogers Industrial Products, Inc.)/
(Bank One, Akron, N.A. LOC), Optional Tender 5/1/1997 1,030,000
660,000 Summit County, OH IDR, 3.90% TOBs (Bechmer-Boyce Project)/(KeyBank,
N.A. LOC), Optional Tender 7/15/1997 660,000
355,000 Summit County, OH IDR, 3.95% TOBs (Keltec Industries)/(Bank One,
Akron, N.A. LOC), Optional Tender 9/1/1997 355,000
760,000 Summit County, OH IDR, 3.95% TOBs (Universal Rack)/(National City
Bank, Cleveland, OH LOC), Optional Tender 9/1/1997 760,000
1,700,000 Summit County, OH IDR, Adjustable Rate IDRB's (Series 1996) Weekly
VRDNs (Fomo Products, Inc.)/(First National Bank of Ohio, Akron LOC) 1,700,000
880,000 Summit County, OH IDR, Bonds (Series 1994) Weekly VRDNs (Austin
Printing Co., Inc.)/(Bank One, Akron, N.A. LOC) 880,000
2,890,000 Summit County, OH IDR, IDRB (Series 1994B) Weekly VRDNs (Harry
London Candies, Inc.)/(Bank One, Akron, N.A. LOC) 2,890,000
925,000 Summit County, OH IDR, IDRB (Series 1995) Weekly VRDNs (Cardtech
Project (OH))/(KeyBank, N.A. LOC) 925,000
1,420,000 Summit County, OH IDR, Industrial Development Bonds (Series 1996)
Weekly VRDNs (Creative Screen Print Project)/(National City, Northeast
LOC) 1,420,000
1,350,000 Summit County, OH IDR, Multi-Mode Variable Rate I Weekly VRDNs
(Mastergraphics, Inc. Project)/(KeyBank, N.A. LOC) 1,350,000
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 3,500,000 Summit County, OH, Adjustable Rate Healthcare Facilities Revenue Bonds
(Series 1996) Weekly VRDNs (United Disability Services, Inc.)/(First
National Bank of Ohio, Akron LOC) $ 3,500,000
3,000,000 Summit County, OH, Various Purpose Notes (Series 1996C), 4.375% BANs,
11/20/1997 3,011,661
1,000,000 Toledo-Lucas County, OH Port Authority, IDA Weekly VRDNs (Medusa
Corp.)/(Bayerische Vereinsbank AG, Munich LOC) 1,000,000
2,500,000 Trumbull County, OH IDA, (Series 1989) Weekly VRDNs (McSonald Steel
Corp.)/(PNC Bank, Ohio, N.A. LOC) 2,500,000
1,330,000 Trumbull County, OH IDA, IDR Refunding Bonds (Series 1994) Weekly
VRDNs (Churchill Downs, Inc.)/(Bank One, Columbus, N.A. LOC) 1,330,000
1,165,000 Tuscarawas County, OH, Adjustable Rate IDRB's (Series 1995) Weekly
VRDNs (Primary Packaging, Inc.)/(First National Bank of Ohio, Akron
LOC) 1,165,000
2,085,000 Wayne County, OH, Health Care Facility Revenue Bonds (Series 1995)
Weekly VRDNs (D & M Realty Project)/(Bank One, Youngstown, NA LOC) 2,085,000
5,000,000 Westlake, OH City School District, Voted Unlimited Tax GO's, 4.20%
BANs, 7/28/1997 5,007,147
2,650,000 Williams County, OH, Multi-Mode Variable Rate IDRB's (Series 1996)
Weekly VRDNs (Allied Moulded Products, Inc.)/(KeyBank, N.A. LOC) 2,650,000
1,100,000 Willoughby City, OH, IDR Refunding Bonds (Series 1995A) Weekly
VRDNs (Pine Ridge Shopping Center Company Project)/(Star Bank, N.A.,
Cincinnati LOC) 1,100,000
1,185,000 Willoughby City, OH, IDR Revenue Bonds (Series 1995B) Weekly VRDNs
(Pine Ridge Shopping Center Company Project)/(Star Bank, N.A.,
Cincinnati LOC) 1,185,000
1,200,000 Wood County, OH Weekly VRDNs (Principle Business Enterprises)/
(National City Bank, Cleveland, OH LOC) 1,200,000
2,120,000 Wood County, OH, EDRB Weekly VRDNs (Roe Inc. Project)/(Huntington
National Bank, Columbus, OH LOC) 2,120,000
3,000,000 Wooster City, OH, Waterworks System Improvement (Series 1996), 4.125%
BANs, 11/20/1997 3,006,023
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 4,300,000 Youngstown, OH, Adjustable Rate Demand
IDRB's (Series 1996A) Weekly VRDNs (Cantar/Polyair
Corp./Performa Corp.)/(Marine Midland Bank
N.A., Buffalo, NY LOC) $ 4,300,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 302,058,893
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 48.6%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
<C> <C>
95.8% 4.2%
</TABLE>
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $11,025,000 which represents 3.6% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($304,548,072) at April 30, 1997.
The following acronyms are used throughout this portfolio:
BANs -- Bond Anticipation Notes
COL -- Collateralized
CP -- Commercial Paper
EDRB -- Economic Development Revenue Bonds FGIC -- Financial Guaranty
Insurance Company 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 INS -- Insured LIQ --
Liquidity Agreement LOC -- Letter of Credit LT -- Limited Tax LTD --
Limited PCR -- Pollution Control Revenue PLC -- Public Limited Company
RANs -- Revenue Anticipation Notes TOBs -- Tender Option Bonds VRDNs
- -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
OHIO MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $302,058,893
Cash 899,901
Income receivable 2,615,426
Total assets 305,574,220
LIABILITIES:
Income distribution payable $ 879,357
Accrued expenses 146,791
Total liabilities 1,026,148
NET ASSETS for 304,548,072 shares outstanding $304,548,072
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$54,336,076 / 54,336,076 shares outstanding $1.00
CASH II SHARES:
$207,115,080 / 207,115,080 shares outstanding $1.00
INSTITUTIONAL SHARES:
$43,096,916 / 43,096,916 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $6,549,921
EXPENSES:
Investment advisory fee $ 707,700
Administrative personnel and services fee 133,594
Custodian fees 24,550
Transfer and dividend disbursing agent fees and expenses 130,606
Directors'/Trustees' fees 2,262
Auditing fees 6,900
Legal fees 2,816
Portfolio accounting fees 55,490
Distribution services fee -- Cash II Shares 328,459
Shareholder services fee -- Institutional Service Shares 79,495
Shareholder services fee -- Cash II Shares 273,716
Shareholder services fee -- Institutional Shares 88,789
Share registration costs 19,120
Printing and postage 10,862
Insurance premiums 3,203
Miscellaneous 204
Total expenses 1,867,766
Waivers --
Waiver of investment advisory fee $ (434,900)
Waiver of distribution services fee -- Cash II Shares (54,743)
Waiver of shareholder services fee -- Institutional Service Shares (15,899)
Waiver of shareholder services fee -- Institutional Shares (88,789)
Total waivers (594,331)
Net expenses 1,273,435
Net investment income $5,276,486
</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 YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 5,276,486 $ 8,958,075
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Service Shares (994,297) (2,339,083)
Cash II Shares (3,099,687) (5,962,329)
Institutional Shares (1,182,502) (656,663)
Change in net assets resulting from distributions to
shareholders (5,276,486) (8,958,075)
SHARE TRANSACTIONS --
Proceeds from sale of shares 763,168,478 1,408,349,215
Net asset value of shares issued to shareholders in payment of
distributions declared 2,579,036 6,083,711
Cost of shares redeemed (799,749,273) (1,337,048,550)
Change in net assets resulting from share transactions (34,001,759) 77,384,376
Change in net assets (34,001,759) 77,384,376
NET ASSETS:
Beginning of period 338,549,831 261,165,455
End of period $ 304,548,072 $ 338,549,831
</TABLE>
(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)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993 1992 1991(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 0.04 0.02 0.02 0.03 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (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 $ 1.00
TOTAL RETURN(B) 1.56% 3.27% 3.61% 2.41% 2.33% 3.21% 2.40%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.57%* 0.57% 0.57% 0.55% 0.48% 0.46% 0.35%*
Net investment income 3.13%* 3.23% 3.56% 2.36% 2.30% 3.10% 4.46%*
Expense 0.30%* 0.31% 0.29% 0.07% 0.19% 0.25% 0.32%*
waiver/reimbursement(c)
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $54,336 $59,721 $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)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993 1992 1991(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 0.01 0.03 0.03 0.02 0.02 0.03 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.01) (0.03) (0.03) (0.02) (0.02) (0.03) (0.02)
NET ASSET VALUE, END OF $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
PERIOD
TOTAL RETURN(B) 1.41% 2.96% 3.30% 2.10% 2.02% 2.90% 2.27%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.87%* 0.87% 0.87% 0.85% 0.78% 0.76% 0.63%*
Net investment income 2.83%* 2.92% 3.25% 2.09% 2.01% 2.86% 4.18%*
Expense 0.30%* 0.31% 0.29% 0.24% 0.19% 0.25% 0.34%*
waiver/reimbursement(c)
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $207,115 $206,149 $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
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
(UNAUDITED) ENDED
APRIL 30, OCTOBER 31,
1997 1996(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 1.67% 2.22%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.37%* 0.37%*
Net investment income 3.32%* 3.38%*
Expense waiver/reimbursement(c) 0.50%* 0.51%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $43,097 $72,680
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 5, 1996 (date of
initial public investment) to October 31, 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
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Ohio Municipal Cash Trust (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund offers three classes
of shares: Institutional Service Shares, Cash II 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 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.
RESTRICTED SECURITIES -- Restricted securities are securities that
may only be resold upon registration under federal securities laws
or in transactions exempt from such registration. Many restricted
securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities
may be resold without registration upon exercise of a demand
feature. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees (the
"Trustees"). The Fund will not incur any registration costs upon
such resales. Restricted securities are valued at amortized cost in
accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at April
30, 1997 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Ohio HFA, Single Family Mortgage (Series PT 71) 7/1/96 $7,025,000
Ohio HFA, Trust Receipts (Series 1996 FR/RI-6)
Weekly VRDNs 3/14/97 4,000,000
</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) for each class of shares. At April 30, 1997, capital
paid-in aggregated $304,548,072.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR
SIX MONTHS ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES APRIL 30, 1997 1996
<S> <C> <C>
Shares sold 74,408,162 440,264,015
Shares issued to shareholders in payment of
distributions declared 89,019 226,623
Shares redeemed (79,882,117) (453,700,715)
Net change resulting from Institutional Service share transactions (5,384,936) (13,210,077)
<CAPTION>
YEAR
SIX MONTHS ENDED
ENDED OCTOBER 31,
CASH II SHARES APRIL 30, 1997 1996
<S> <C> <C>
Shares sold 385,468,051 681,930,901
Shares issued to shareholders in payment of
distributions declared 2,469,755 5,797,497
Shares redeemed (386,971,500) (669,813,991)
Net change resulting from Cash II Share transactions 966,306 17,914,407
<CAPTION>
PERIOD
SIX MONTHS ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SHARES APRIL 30, 1997 1996(A)
<S> <C> <C>
Shares sold 303,292,265 286,154,299
Shares issued to shareholders in payment of
distributions declared 20,262 59,591
Shares redeemed (332,895,656) (213,533,844)
Net change resulting from Institutional Share transactions (29,583,129) 72,680,046
Net change resulting from share transactions (34,001,759) 77,384,376
</TABLE>
(a) For the period from March 5, 1996 (date of initial public
investment) to October 31, 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
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 average daily net assets
of the 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.
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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $250,535,000 and
$304,349,955, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 63.1% 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 percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
11.9% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229659
Cusip 314229857
Cusip 314229840
2052903 (6/97)
[Graphic]
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, 1996,
through April 30, 1997. 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, Cash Series
Shares, and Institutional Shares.
The fund is a convenient way to keep your ready cash pursuing double
tax-free income -- free from federal regular income tax, and state
personal income tax* -- through a portfolio concentrated in
high-quality, short-term Pennsylvania municipal securities. Investors'
assets in the fund are also not subject to local personal property
tax.* At the end of the reporting period, the fund's holdings were
diversified among issuers that use municipal bond financing for
projects as varied as health care, housing, community development, and
transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
of $0.02 per share for Institutional Service Shares, $0.01 per share
for Cash Series Shares, and $0.02 per share for Institutional Shares.
The fund's net assets stood at $316.5 million at the end of the
reporting period.
Thank you for relying on Pennsylvania Municipal Cash Trust to help
your ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA,
Vice President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until the end of the fund's semi-annual
reporting period, the Federal Reserve Board (the "Fed") brought about
the first change in monetary policy in over a year. On March 25, 1997,
the Fed, in the face of stronger than expected demand, voted to raise
the federal funds target rate from 5.25% to 5.50%. The move was viewed
as being pre-emptive against the threat of future inflationary
pressures possibly brought about by tight labor market conditions.
Until that point, movements in interest rates reflected shifting
market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February, and
by the time of the Fed tightening in late March, had built in much of
the expectations regarding the Fed decision. In April, the financial
markets continued to focus on the likelihood of an additional
tightening move later in May, causing short-term yields to rise even
further. Yields on the six-month Treasury bill rose sharply over this
interim period, moving from a low of 5.20% in mid-February to a high
of 5.68% in late April before falling back to 5.53% by the end of
reporting period.
Q What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 58 days. As signs of strength in the economy became
more apparent, and as expectation of an imminent Fed tightening
increased in the first quarter of 1997, we lowered the average
maturity target range of the fund from between 55 and 60 days to
between 50 and 55 days. By the end of the reporting period, we had
allowed the average maturity to roll further inward to 48 days, as we
increased the percentage of seven-day variable rate demand notes to
provide more portfolio responsiveness to interest rate increases.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month fixed rate
notes. This portfolio structure continues to pursue a competitive
yield over time.
Q How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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 rose
over the reporting period. For the fund, the seven-day net yield of
Institutional Service Shares on April 30, 1997, was 3.72%, compared to
3.01% at the beginning of the reporting period.* For the Cash Service
Shares, the seven-day net yield was 3.32% at the end of the period
compared to 2.61% six months ago.* For the Institutional Shares, the
seven-day yield was 3.92% on April 30, 1997, compared to 3.21% on
November 1, 1996.*
Q Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the buildup of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
PENNSYLVANIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- 99.4%
PENNSYLVANIA -- 99.4%
$ 1,000,000 Allegheny County, PA IDA, (Series 1991) Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd., Osaka LOC)
$ 1,000,000
1,300,000 Allegheny County, PA IDA, (Series 1991B) Weekly VRDNs
(Shandon, Inc.)/(PNC Bank, N.A.
LOC) 1,300,000
6,500,000 Allegheny County, PA IDA, 3.70% CP (Duquesne Light Power Co.)/
(Barclays Bank PLC, London LOC), Mandatory Tender
2/5/1998 6,500,000
4,710,000 Allegheny County, PA IDA, Commercial Development Revenue Bonds
(Series 1992) Weekly VRDNs (Eleven Parkway Center Associates)/
(National City, Pennsylvania
LOC) 4,710,000
5,000,000 Allegheny County, PA IDA, PCR (Series 1992A), 3.65% TOBs (Duquesne
Light Power Co.)/(Canadian Imperial Bank of Commerce, Toronto LOC),
Optional Tender
10/30/1997 5,000,000
3,040,000 Allegheny County, PA IDA, Variable Rate Demand Revenue Bonds
(Series A of 1997) Weekly VRDNs (Jewish Community Center)/
(National City, Pennsylvania
LOC) 3,040,000
5,000,000 Allegheny County, PA IDA, Variable Rate Demand Revenue Bonds
(Series B of 1997) Weekly VRDNs (Jewish Community Center)/
(National City, Pennsylvania
LOC) 5,000,000
5,000,000 Allegheny County, PA Port Authority, (Series A), 3.90% GANs
(PNC Bank, N.A. LOC),
6/30/1997 5,000,000
3,000,000 Beaver County, PA IDA, PCR Refunding Bonds (1992 Series-E), 3.70% CP
(Toledo Edison Co.)/(Toronto-Dominion Bank LOC), Mandatory Tender
12/4/1997
3,000,000
4,000,000 Bedford County, PA IDA, (Series 1985) Weekly VRDNs (Sepa, Inc.
Facility)/(First Union National Bank, Charlotte, NC
LOC) 4,000,000
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 1,210,000 Berks County, PA IDA Weekly VRDNs (ADC Quaker
Maid Meats)/ (Corestates Bank N.A., Philadelphia, PA
LOC)
$ 1,210,000
910,000 Berks County, PA IDA Weekly VRDNs (Beacon Container)/(Corestates
Bank N.A., Philadelphia, PA
LOC) 910,000
1,700,000 Berks County, PA IDA, (Series 1988) Weekly VRDNs (Arrow
Electronics, Inc.)/(Corestates Bank N.A., Philadelphia,
PA
LOC) 1,700,000
3,550,000 Berks County, PA IDA, Manufacturing Facilities Revenue Bonds
(Series 1996) Weekly VRDNs (Ram Industries, Inc.)/(Corestates Bank
N.A., Philadelphia, PA
LOC) 3,550,000
1,865,000 Berks County, PA IDA, Manufacturing Facilities Revenue Bonds
(Series 1995) Weekly VRDNs (Grafika Commercial Printing, Inc.)/
(Corestates Bank N.A., Philadelphia, PA
LOC) 1,865,000
450,000 Berks County, PA IDA, Revenue Bonds (Series 1995A/Subseries A) Weekly
VRDNs (Corestates Bank N.A., Philadelphia, PA
LOC) 450,000
1,165,000 Berks County, PA IDA, Revenue Bonds (Series 1995A/Subseries B) Weekly
VRDNs (Corestates Bank N.A., Philadelphia, PA
LOC) 1,165,000
1,425,000 Berks County, PA IDA, VRD/Fixed Rate Revenue Bonds (Series A of 1996)
Weekly VRDNs (Lebanon Valley Mall Co.)/(Meridian Bank, Reading,
PA
LOC)
1,425,000
2,135,000 Bucks County, PA IDA, Weekly VRDNs (Double H Plastics, Inc.)/
(Corestates Bank N.A., Philadelphia, PA
LOC) 2,135,000
2,700,000 Bucks County, PA IDA, Weekly VRDNs (Pennsylvania Associates)/
(Corestates Bank N.A., Philadelphia, PA
LOC) 2,700,000
4,000,000 Bucks County, PA IDA, (Series 1991) Weekly VRDNs (Cabot
Medical Corp.)/(Corestates Bank N.A., Philadelphia, PA
LOC) 4,000,000
4,000,000 Butler County, PA IDA, Weekly VRDNs (Mine Safety Appliances Co.)/
(Sanwa Bank Ltd, Osaka
LOC) 4,000,000
1,000,000 Butler County, PA IDA, (Series 1992B) Weekly VRDNs (Mine Safety
Appliances Co.)/(Sanwa Bank Ltd, Osaka
LOC) 1,000,000
1,400,000 Butler County, PA IDA, (Series 1996 A) Weekly VRDNs (Armco, Inc.)/
(Chase Manhattan Bank N.A., New York
LOC) 1,400,000
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 5,500,000 Butler County, PA IDA, First Mortgage Revenue Bonds, 10.125% Bonds
(St. John Lutheran Care Center)/(United States Treasury PRF),
10/1/1997 (@102)
$ 5,750,006
2,330,000 Butler County, PA IDA, IDRB (Series 1994) Weekly VRDNs
(Lue-Rich Holding Company, Inc. Project)/(ABN AMRO Bank N.V.,
Amsterdam
LOC) 2,330,000
5,400,000 Butler County, PA IDA, Variable Rate Demand Revenue Bonds
(Series 1996A), 4.25% TOBs (Lutheran Welfare)/(PNC Bank, N.A. LOC),
Mandatory Tender
11/3/1997 5,416,031
3,900,000 Cambria County, PA IDA Weekly VRDNs (Cambria Cogeneration)/
(ABN AMRO Bank N.V., Amsterdam
LOC) 3,900,000
1,500,000 Carbon County, PA IDA, Weekly VRDNs (Summit Management &
Utilities, Inc.)/(PNC Bank, N.A.
LOC) 1,500,000
5,000,000 Carbon County, PA IDA, 3.70% CP (Panther Creek)/(National Westminster
Bank, PLC, London LOC), Mandatory Tender
5/1/1997 5,000,000
1,060,000 Carbon County, PA IDA, Resource Recovery Bonds (Series B), 3.60% CP
(Panther Creek)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender
5/13/1997 1,060,000
6,825,000 Carbon County, PA IDA, Resource Recovery Bonds, 3.70% CP (Panther
Creek)/(National Westminster Bank, PLC, London LOC), Mandatory
Tender
5/1/1997 6,825,000
5,000,000 Carbon County, PA IDA, Solid Waste Disposal Revenue Notes
(Series 1996), 3.90% RANs (Horsehead Resource Development, Inc.)/
(Chase Manhattan Bank N.A., New York LOC),
12/3/1997 5,000,000
7,300,000 Clearfield County, PA IDA, Weekly VRDNs (Penn Traffic Co.)/
(ABN AMRO Bank N.V., Amsterdam
LOC) 7,300,000
6,000,000 Clinton County, PA IDA, Solid Waste Disposal Revenue Bonds
(Series 1992A), 3.75% TOBs (International Paper Co.), Optional Tender
1/15/1998
6,000,000
3,000,000 Clinton County, PA, IDA, Weekly VRDNs (Armstrong World
Industries, Inc.)/(Mellon Bank N.A., Pittsburgh
LOC) 3,000,000
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 5,000,000 Coatsville, PA School District, 4.25% TRANs, 6/30/1997
$ 5,001,970
5,000,000 Commonwealth of Pennsylvania, 4.50% TANs,
6/30/1997 5,006,399
1,300,000 Cumberland County, PA IDA, Industrial Development Bonds (Series 1994)
Weekly VRDNs (Lane Enterprises, Inc. Project)/(Corestates Bank N.A.,
Philadelphia, PA
LOC) 1,300,000
4,900,000 Delaware County Authority, PA, Hospital Revenue Bonds (Series of 1996)
Weekly VRDNs (Crozer-Chester Medical Center)/(Kredietbank N.V.,
Brussels
LOC) 4,900,000
3,900,000 East Hempfield Township, PA IDA, (Series 1985) Weekly VRDNs
(Yellow Freight System)/(Wachovia Bank of Georgia N.A., Atlanta
LOC) 3,900,000
10,900,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent Health
System)/(Mellon Bank N.A., Pittsburgh
LOC) 10,900,000
200,000 Erie County, PA IDA, Weekly VRDNs (P.H.B. Project)/(PNC Bank,
N.A.
LOC) 200,000
325,000 Erie County, PA IDA, (Series 1985) Weekly VRDNs (R. P-C Value, Inc.)/
(PNC Bank, N.A.
LOC) 325,000
400,000 Erie County, PA IDA, (Series B) Weekly VRDNs (P.H.B. Project)/
(PNC Bank, N.A.
LOC) 400,000
400,000 Forest County, PA IDA, Weekly VRDNs (Industrial Timber & Land Co.)/
(National City Bank, Cleveland, OH
LOC) 400,000
1,155,000 Forest County, PA IDA, Weekly VRDNs (Marienville Health Care
Facility)/(PNC Bank, N.A.
LOC) 1,155,000
1,800,000 Franklin County, PA IDA Weekly VRDNs (The Guarriello Limited
Partnership)/(PNC Bank, N.A.
LOC) 1,800,000
2,670,000 Hampton Township, PA School District, 4.19% TRANs,
6/30/1997 2,670,378
7,000,000 Lancaster County, PA Hospital Authority, Health Center Revenue Bonds
(Series 1996) Weekly VRDNs (Masonic Homes)/(First Union National
Bank, Charlotte, NC
LIQ) 7,000,000
2,050,000 Lancaster, PA Higher Education Authority, College Revenue Bonds
(Series 1995) Weekly VRDNs (Franklin and Marshall College
Project) 2,050,000
856,092 Lawrence County, PA IDA, (Series 1989A) Weekly VRDNs
(Ellwood Uddeholm Steel Co.)/(KeyBank, N.A.
LOC) 856,092
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 4,640,000 Lehigh County, PA General Purpose Authority, Revenue Bonds (Series
1990) Weekly VRDNs (Phoebe Terrace, Inc.)/(Corestates Bank N.A.,
Philadelphia, PA LOC)
$ 4,640,000
2,600,000 Lehigh County, PA IDA, (Series 1989A) Weekly VRDNs (Hershey
Pizza Co., Inc.)/(PNC Bank, N.A.
LOC) 2,600,000
550,000 McKean County, PA IDA, Multi-Mode Revenue Refunding Bonds Weekly
VRDNs (Bradford Manor, Inc.)/(PNC Bank, N.A.
LOC) 550,000
3,300,000 Monroe County, PA IDA, PCR Weekly VRDNs (Cooper Industries, Inc.)/
(Sanwa Bank Ltd., Osaka
LOC) 3,300,000
770,000 Montgomery County, PA Higher Education and Health Authority,
(Series 1992) Weekly VRDNs (Pottstown Healthcare Corporation Project)/
(Corestates Bank N.A., Philadelphia, PA
LOC) 770,000
1,300,000 Montgomery County, PA IDA, (Series 1992) Weekly VRDNs (RJI Limited Partnership)/
(Corestates Bank N.A., Philadelphia, PA
LOC) 1,300,000
1,635,000 Montgomery County, PA IDA, (Series 84) Weekly VRDNs (Thomas &
Betts Corp.)/(Wachovia Bank of NC, N.A., Winston-Salem
LOC) 1,635,000
6,675,000 Montgomery County, PA IDA, Commercial Development Revenue Bonds
(Series 1992) Weekly VRDNs (Hickory Pointe Project)/(First Union
National Bank, North
LOC) 6,675,000
1,140,000 Montgomery County, PA IDA, EDRB's (Series 1997) Weekly
VRDNs (Palmer International, Inc.)/(Mellon Bank N.A.,
Pittsburgh
LOC) 1,140,000
4,975,000 Moon Township, PA IDA, Weekly VRDNs (Airport Hotel Associates)/
(ABN AMRO Bank N.V., Amsterdam
LOC) 4,975,000
2,500,000 New Castle, PA Area Hospital Authority, (Series 1996)
Weekly VRDNs (Jameson Memorial Hospital)/(FSA INS)/(PNC
Bank, N.A.
LIQ) 2,500,000
3,850,000 Northampton County, PA IDA, 3.45% CP (Citizens Utilities Co.),
Mandatory Tender
6/13/1997 3,850,000
9,000,000 Northampton County, PA IDA, 3.80% CP (Citizens Utilities Co.),
Mandatory Tender
7/18/1997 9,000,000
10,000,000 Northeastern, PA Hospital & Education Authority, (Series 1996) Weekly
VRDNs (Allhealth Pooled Financing Program)/(Chase Manhattan Bank
N.A., New York
LOC) 10,000,000
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 1,500,000 Northgate School District, PA, 4.22% TANs, 6/30/1997
$ 1,500,282
1,590,000 Northumberland County PA IDA, Revenue Bonds (Series A of 1995)
Weekly VRDNs (Furman Farms, Inc. Project)/(Corestates Bank N.A.,
Philadelphia, PA
LOC) 1,590,000
1,000,000 Penns Manor Area School District, PA, 4.07% TRANs,
6/30/1997 1,000,236
1,725,000 Pennsylvania EDFA Weekly VRDNs (Cyrogenics, Inc.)/(PNC Bank,
N.A.
LOC) 1,725,000
2,800,000 Pennsylvania EDFA Weekly VRDNs (Industrial Scientific Corp.)/
(Mellon Bank N.A., Pittsburgh
LOC) 2,800,000
600,000 Pennsylvania EDFA Weekly VRDNs (Pioneer Fluid)/(PNC Bank,
N.A.
LOC) 600,000
600,000 Pennsylvania EDFA Weekly VRDNs (RMF Associates)/(PNC Bank,
N.A.
LOC) 600,000
775,000 Pennsylvania EDFA Weekly VRDNs (Reace Associates)/(PNC Bank,
N.A.
LOC) 775,000
450,000 Pennsylvania EDFA, (Series B) Weekly VRDNs (Payne Printing Co.)/
(PNC Bank, N.A.
LOC) 450,000
1,000,000 Pennsylvania EDFA, Economic Development Revenue Bonds
(Series 1996C) Weekly VRDNs (Napco, Inc. Project)/(Mellon Bank N.A.,
Pittsburgh
LOC) 1,000,000
850,000 Pennsylvania EDFA, Revenue Bonds (Series G4) Weekly VRDNs
(Metamora Products)/(PNC Bank, N.A.
LOC) 850,000
275,000 Pennsylvania EDFA, Revenue Bonds Weekly VRDNs (DDI
Pharmaceuticals, Inc.)/(PNC Bank, N.A.
LOC) 275,000
375,000 Pennsylvania EDFA, Revenue Bonds Weekly VRDNs (RAM Forest
Products)/(PNC Bank, N.A.
LOC) 375,000
6,205,000 Pennsylvania Housing Finance Authority, 3.85% TOBs (First National
Bank of Chicago LIQ), Optional Tender
10/1/1997 6,205,000
960,000 Pennsylvania Housing Finance Authority, Section 8 Assisted Residential
Development Refunding Bonds (Series 1992A) Weekly VRDNs
(CGIC INS)/(Citibank N.A., New York
LIQ) 960,000
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 1,760,000 Pennsylvania Housing Finance Authority, Variable Rate Merlots (Series I),
4.10% TOBs (Corestates Bank N.A., Philadelphia, PA LIQ), Optional
Tender 7/1/1997
$ 1,760,000
20,000,000 Pennsylvania State Higher Education Assistance Agency, Student Loan
Adjustable Rate Revenue Bonds (Series 1997A) Weekly VRDNs (Student
Loan Marketing Association
LOC) 20,000,000
5,000,000 Pennsylvania State University, University Project Notes, (Series A), 4.50%
BANs,
11/25/1997 5,024,057
8,100,000 Philadelphia Redevelopment Authority, Multi-Family Revenue Bonds
(Series 1985) Weekly VRDNs (Franklin Town Towers)/(Marine Midland
Bank N.A., Buffalo, NY
LOC) 8,100,000
2,000,000 Philadelphia, PA, (Series A of 1996-1997), 4.50% TRANs,
6/30/1997 2,001,654
3,335,000 Pittsburgh, PA, (Series A), 5.00% Bonds (MBIA Corporation INS),
3/1/1998 3,370,068
2,275,000 Red Lion, PA Area School District, 4.25% TRANs,
6/30/1997 2,276,440
1,900,000 Schuylkill County, PA IDA, Manufacturing Facilities Revenue Bonds
(Series 1995) Weekly VRDNs (Prime Packing, Inc. Project)/(Corestates
Bank N.A., Philadelphia, PA
LOC) 1,900,000
2,000,000 Schuylkill County, PA IDA, Variable Rate Demand/Fixed Rate
Manufacturing Facilities Revenue Bonds (Series of 1996) Weekly VRDNs
(Craftex Mills, Inc.)/(Corestates Bank N.A., Philadelphia, PA
LOC) 2,000,000
2,100,000 Venango, PA IDA, Resource Recovery Bonds (Series 1993), 3.60% CP
(Scrubgrass Power Corp.)/(National Westminster Bank, PLC, London
LOC), Mandatory Tender
5/14/1997 2,100,000
4,000,000 Venango, PA IDA, Resource Recovery Bonds (Series 1993), 3.60% CP
(Scrubgrass Power Corp.)/(National Westminster Bank, PLC, London
LOC), Mandatory Tender
6/13/1997 4,000,000
695,000 Washington County, PA Hospital Authority, (Series 1990) Weekly VRDNs
(Mac Plastics, Inc.)/(National City Bank, Cleveland, OH
LOC) 695,000
10,700,000 Washington County, PA IDA, Solid Waste Disposal Revenue Bonds
(Series 1995) Weekly VRDNs (American Iron Oxide Company Project)/
(Bank of Tokyo-Mitsubishi Ltd.
LOC) 10,700,000
2,700,000 Washington County, PA Municipal Authority Facilities, (Series 1985A)
Weekly VRDNs (1985-A Pooled Equipment Lease Program)/(Sanwa Bank
Ltd., Osaka
LOC) 2,700,000
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C> <S>
<C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 1,050,000 Washington County, PA, IDA (Series 1988)
Weekly VRDNs (Coca-Cola Co.)/(Mellon Bank N.A.,
Pittsburgh LOC)
$ 1,050,000
935,000 West Cornwall Township, PA Municipal Authority, Revenue Bonds (Series
1995) Weekly VRDNs (Lebanon Valley Brethern Home Project (PA))/
(Corestates Bank N.A., Philadelphia, PA
LOC) 935,000
4,455,000 Westmoreland County, PA IDA, Revenue Bonds (Series 1997) Weekly
VRDNs (Rhodin Enterprises Project)/(Corestates Bank N.A., Philadelphia,
PA
LOC)
4,455,000
1,000,000 York County, PA IDA, Variable Rate Demand Ltd. Obligation Revenue
Bonds (Series 1996) Weekly VRDNs (Metal Exchange Corp.)/(Comerica
Bank, Detroit, MI
LOC) 1,000,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(B)
$ 314,713,613
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 44.3%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value
FIRST TIER SECOND TIER
97.62% 2.38%
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($316,482,561) at April 30, 1997.
The following acronyms are used throughout this portfolio:
BANs -- Bond Anticipation Notes CGIC -- Capital Guaranty Insurance
Corporation CP -- Commercial Paper EDFA -- Economic Development
Financing Authority EDRB -- Economic Development Revenue Bonds FSA --
Financial Security Assurance GANs -- Grant Anticipation Notes IDA --
Industrial Development Authority IDRB -- Industrial Development
Revenue Bond INS -- Insured LIQ -- Liquidity Agreement LOC -- Letter
of Credit MBIA -- Municipal Bond Investors Assurance PCR -- Pollution
Control Revenue PLC -- Public Limited Company PRF -- Prerefunded RANs
- -- Revenue Anticipation Notes TANs -- Tax Anticipation Notes TOBs --
Tender Option Bonds TRANs -- Tax and Revenue Anticipation Notes VRDNs
- -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $
314,713,613
Cash
402,882
Income receivable
2,309,071
Total assets
317,425,566
LIABILITIES:
Income distribution payable $ 866,353
Accrued expenses 76,652
Total liabilities
943,005
Net Assets for 316,482,561 shares outstanding $
316,482,561
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$256,935,979 / 256,935,979 shares
outstanding $1.00
CASH SERIES SHARES:
$20,253,156 / 20,253,156 shares
outstanding $1.00
INSTITUTIONAL SHARES:
$39,293,426 / 39,293,426 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $
5,510,719
EXPENSES:
Investment advisory fee $ 745,791
Administrative personnel and services fee 112,628
Custodian fees 22,115
Transfer and dividend disbursing agent fees and expenses 38,318
Directors'/Trustees' fees 2,300
Auditing fees 7,160
Legal fees 2,418
Portfolio accounting fees 49,787
Distribution services fee -- Cash Series Shares 45,178
Shareholder services fee -- Institutional Service Shares 292,639
Shareholder services fee -- Cash Series Shares 28,236
Shareholder services fee -- Institutional Shares 52,020
Share registration costs 14,876
Printing and postage 11,258
Insurance premiums 3,383
Miscellaneous 2,018
Total expenses 1,430,125
Waivers --
Waiver of investment advisory fee $ (334,277)
Waiver of distribution services fee -- Cash Series Shares (5,647)
Waiver of shareholder services fee -- Institutional Service Shares (58,528)
Waiver of shareholder services fee -- Institutional Shares (52,020)
Total waivers (450,472)
Net expenses
979,653
Net investment income $
4,531,066
</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,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 4,531,066 $
9,138,414
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Service Shares (3,561,175)
(7,961,058)
Cash Series Shares (295,989)
(504,436)
Institutional Shares (673,902)
(672,920)
Change in net assets resulting from distributions to shareholders (4,531,066)
(9,138,414)
SHARE TRANSACTIONS --
Proceeds from sale of shares 568,385,882
1,005,435,067
Net asset value of shares issued to shareholders in payment of
distributions declared 873,488
2,204,567
Cost of shares redeemed (531,528,909)
(1,036,079,299)
Change in net assets resulting from share transactions 37,730,461
(28,439,665)
Change in net assets 37,730,461
(28,439,665)
NET ASSETS:
Beginning of period 278,752,100
307,191,765
End of period $ 316,482,561 $
278,752,100
</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,
1997 1996 1995 1994 1993 1992 1991
1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.02 0.03 0.03 0.02 0.02 0.03 0.05
0.05
LESS DISTRIBUTIONS
Distributions from
net investment income (0.02) (0.03) (0.03) (0.02) (0.02) (0.03) (0.05)
(0.05)
NET ASSET VALUE, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $
1.00
END OF PERIOD
TOTAL RETURN(B) 1.51% 3.16% 3.44% 2.25% 2.24% 3.08% 4.64%
5.78%
RATIOS TO AVERAGE
NET ASSETS
Expenses 0.65%* 0.65% 0.65% 0.64% 0.57% 0.56% 0.55%
0.50%*
Net investment income 3.04%* 3.12% 3.38% 2.19% 2.21% 3.04% 4.53%
5.56%*
Expense waiver/
reimbursement(c) 0.27%* 0.27% 0.27% 0.02% 0.12% 0.12% 0.11%
0.18%*
SUPPLEMENTAL DATA
Net assets,
end of period
(000 omitted) $256,936 $221,851 $276,407 $229,160 $318,518 $308,200 $317,165
$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,
1997 1996 1995 1994 1993 1992 1991(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03 0.02 0.02 0.03 0.03
LESS DISTRIBUTIONS
Distributions from net
investment income (0.01) (0.03) (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 $ 1.00
TOTAL RETURN(B) 1.31% 2.75% 3.02% 1.84% 1.83% 2.67% 3.55%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.05%* 1.05% 1.05% 1.04% 0.97% 0.96% 0.78%*
Net investment income 2.62%* 2.72% 2.98% 1.73% 1.88% 2.64% 3.92%*
Expense 0.27%* 0.27% 0.28% 0.18% 0.12% 0.12% 0.28%*
waiver/reimbursement(c)
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $20,253 $19,825 $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,
1997 1996 1995(A)
<C> <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) 1.61% 3.37% 1.03%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45%*
Net investment income 3.24%* 3.27% 3.81%*
Expense waiver/reimbursement(c) 0.47%* 0.47% 0.46%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $39,293 $37,076 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Pennsylvania Municipal Cash Trust (the "Fund"). The financial
statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest
is limited to the portfolio in which shares are held. The Fund 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.
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 Board of Trustees (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, 1997, capital paid-in aggregated $316,482,561.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1997 OCTOBER
31, 1996
<S> <C> <C>
Shares sold 451,086,216
859,300,895
Shares issued to shareholders in
payment of distributions declared 617,241
1,683,244
Shares redeemed (416,618,193)
(915,540,908)
Net change resulting from Institutional Service Share transactions 35,085,264
(54,556,769)
<CAPTION>
SIX MONTHS
ENDED YEAR
ENDED
CASH SERIES SHARES APRIL 30, 1997 OCTOBER
31, 1996
<S> <C> <C>
Shares sold 35,858,168
54,089,713
Shares issued to shareholders in
payment of distributions declared 225,296
485,371
Shares redeemed (35,655,194)
(63,005,461)
Net change resulting from Cash Series Share transactions 428,270
(8,430,377)
<CAPTION>
SIX MONTHS
ENDED YEAR
ENDED
INSTITUTIONAL SHARES APRIL 30, 1997 OCTOBER
31, 1996
<S> <C> <C>
Shares sold 81,441,498
92,044,459
Shares issued to shareholders in
payment of distributions declared 30,951
35,952
Shares redeemed (79,255,522)
(57,532,930)
Net change resulting from Institutional Share transactions 2,216,927
34,547,481
Net change resulting from share transactions 37,730,461
(28,439,665)
</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.
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 up to 0.40% of the 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 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $279,130,000 and
$251,525,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. CONCENTRATION OF CREDIT RISKS
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, 1997, 79%
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
percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
12.3% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share,
there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectus which
contains facts concerning its objective and policies, management fees,
expenses and other information.
PENNSYLVANIA MUNICIPAL CASH TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1997
Cusip 314229717
Cusip 314229881
Cusip 314229204
0052405 (6/97)
[Graphic]
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, 1996,
through April 30, 1997. 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. At the end of
the reporting period, the fund's holdings were diversified among
issuers that use municipal bond financing for projects as varied as
health care, housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share for both Institutional Shares and
Institutional Service Shares. The fund's net assets stood at $217.9
million at the end of the reporting period.
Thank you for relying on Virginia Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February, and
by the time of the Fed tightening in late March, had built in much of
the expectations regarding the Fed decision. In April, the financial
markets continued to focus on the likelihood of an additional
tightening move later in May, causing short-term yields to rise even
further. Yields on the six-month Treasury bill rose sharply over this
interim period, moving from a low of 5.20% in mid-February to a high
of 5.68% in late April before falling back to 5.53% by the end of
reporting period.
Q
What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 54 days. As the signs of strength in the economy
became more apparent, and as expectation of an imminent Fed tightening
grew in the first quarter of 1997, we lowered the average maturity
target range of the fund from between 50 and 55 days to between 35 and
45 days. By the end of the reporting period, we had allowed the
average maturity to roll further inward to 32 days, so as to further
increase the portfolio's responsiveness to potential interest rate
increases. Also, a lack of attractive, fixed-rate supply was a factor.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month fixed rate
notes. This portfolio structure continues to pursue a competitive
yield over time.
Q
How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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
increased during the reporting period. For the fund, the seven-day net
yield of the Institutional Shares on April 30, 1997 was 3.76%,
compared to 3.20% at the beginning of the reporting period.* For the
Institutional Service Shares, the seven-day net yield was 3.61% at the
end of the reporting period compared to 3.10% six months ago.*
Q
Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the May meeting, our expectations are that the Fed will find cause to
tighten monetary policy further in 1997 -- perhaps as soon as in July.
It is also anticipated that the overall tightening cycle will not be
long in terms of magnitude or duration. The pre-emptive move by the
Fed should help to preclude the need for more aggressive action down
the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
VIRGINIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- 99.2%
VIRGINIA -- 95.5%
$ 5,722,000 Alexandria, VA IDA Weekly VRDNs (American Red Cross)/(Sanwa
Bank Ltd., Osaka LOC) $ 5,722,000
8,000,000 Alexandria, VA Redevelopment and Housing Authority Weekly
VRDNs (Crystal City Apartments)/(Safeco Insurance Co. of America
INS)/(Barclays Bank PLC, London LIQ) 8,000,000
3,500,000 Alexandria, VA Redevelopment and Housing Authority, Series 1996B
Weekly VRDNs (Buckingham Village Apartments)/(First Union
National Bank, Charlotte, NC LOC) 3,500,000
2,200,000 Amelia County, VA IDA, (Series 1991) Weekly VRDNs (Chambers
Waste System)/(Morgan Guaranty Trust Co., New York LOC) 2,200,000
2,500,000 Bedford County, VA IDA, (Series 1996) Weekly VRDNs (Nekoosa
Packaging Corporation Project)/(Canadian Imperial Bank of
Commerce, Toronto LOC) 2,500,000
1,500,000 Bedford County, VA IDA, (Series 1997) Weekly VRDNs (Nekoosa
Packaging Corporation Project)/(Canadian Imperial Bank of
Commerce, Toronto LOC) 1,500,000
4,700,000 Botetourt County, VA IDA, IDRB (Series 1995) Weekly VRDNs (Emkay
Holdings, L.L.C. Project)/(State Street Bank and Trust Co. LOC) 4,700,000
5,500,000 Campbell County, VA IDA, Solid Waste Disposal Facilities Revenue
ACES Weekly VRDNs (Georgia-Pacific Corp.)/(Industrial Bank of
Japan Ltd., Tokyo LOC) 5,500,000
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) 1,000,000
1,750,000 Charlottesville, VA IDA, IDR Refunding Bonds, 3.65% TOBs (Safeway,
Inc.)/(Bankers Trust Co., New York LOC) 6/2/1997 1,750,000
1,900,000 Chesapeake, VA IDA, (Series 1986) Weekly VRDNs (Volvo AB)/
(Union Bank of Switzerland, Zurich LOC) 1,900,000
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
VIRGINIA -- CONTINUED
$ 5,000,000 Chesapeake, VA IDA, IDRB (Series 1988) Weekly VRDNs (Sumitomo
Machinery Corp. of America Corp.)/(Sumitomo Bank Ltd.,
Osaka LOC) $ 5,000,000
1,500,000 Chesapeake, VA, 6.50% Bonds (United States Treasury PRF),
7/1/1997 (@102) 1,536,542
4,000,000 Commonwealth of Virginia, GO BANs (1996 Series), 3.65% CP,
Mandatory Tender 5/19/1997 4,000,000
5,800,000 Danville, VA IDA, (Series 1997) Weekly VRDNs (Diebold, Inc.)/(Bank
One, Akron, N.A. LOC) 5,800,000
1,131,000 Dinwiddie County, VA IDA, IDRB (Series 1989) Weekly VRDNs
(Tindall Concrete VA, Inc.)/(First Union National Bank, Charlotte,
NC LOC) 1,131,000
3,515,000 Dinwiddie County, VA IDA, IDRB (Series 1991) Weekly
VRDNs (Maclin-Zimmer-Mcgill Tobacco Co., Inc.)/(Wachovia
Bank of NC,
N.A., Winston-Salem LOC) 3,515,000
5,298,975 Equity Trust III, (1996 Series) Weekly VRDNs (Bayerische
Hypotheken-Und Wechsel-Bank Ag LOC) 5,298,975
4,000,000 Fairfax County, VA IDA, (Series 1993B), 3.50% CP (Inova Health
System), Mandatory Tender 5/29/1997 4,000,000
6,000,000 Fairfax County, VA IDA, (Series 1993B), 3.80% CP (Inova Health
System), Mandatory Tender 7/22/1997 6,000,000
5,000,000 Fairfax County, VA IDA, (Series 1993B), 3.90% CP (Inova Health
System), Mandatory Tender 5/22/1997 5,000,000
2,000,000 Fairfax County, VA, (Series A), 6.50% Bonds (United States Treasury
PRF), 4/1/1998 (@102) 2,087,602
5,710,000 Fairfax County, VA, Public Improvement Bonds (Series A), 5.50%
Bonds, 6/1/1997 5,718,762
6,100,000 Falls Church, VA IDA, (Series 1985), 3.65% TOBs (Kaiser Permanente
Medical Care Program), Optional Tender 5/1/1997 6,100,000
600,000 Fauquier County, VA IDA, Refunding Revenue Bonds Weekly VRDNs
(Warrenton Development Co.)/(Nationsbank, N.A., Charlotte LOC) 600,000
7,113,000 Fluvanna County, VA IDA, (Series 1986) Weekly VRDNs (Thomasville
Furniture Industries)/(Union Bank of Switzerland, Zurich LOC) 7,113,000
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
VIRGINIA -- CONTINUED
$ 2,500,000 Front Royal & Warren County, VA IDA, IDRB (Series 1995) Weekly
VRDNs (Pen-Tab Industries, Inc. Project)/(Bank of America
Illinois LOC) $ 2,500,000
835,000 Grayson County, VA IDA, (Series 1987) Weekly VRDNs (Robertshaw
Controls Company Project)/(Nationsbank, N.A., Charlotte LOC) 835,000
3,000,000 Halifax, VA IDA, MMMs, PCR, 3.45% CP (Virginia Electric Power
Co.), Mandatory Tender 5/21/1997 3,000,000
7,500,000 Halifax, VA IDA, MMMs, PCR, 3.55% CP (Virginia Electric Power
Co.), Mandatory Tender 5/19/1997 7,500,000
1,800,000 Hanover County, VA IDA Weekly VRDNs (Fiber-Lam, Inc. Project)/
(Nationsbank, N.A., Charlotte LOC) 1,800,000
435,000 Hanover County, VA, UT GO 6.50% Public Improvement Bonds (Series
1997), 7/15/1997 437,561
400,000 King George County IDA, VA, (Series 1996) Weekly VRDNs (Garnet
of Virginia, Inc. Project)/(Morgan Guaranty Trust Co., New York LOC) 400,000
1,535,000 Loudoun County, VA, 6.70% Bonds, 6/1/1997 1,538,688
3,200,000 Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Harden
Manufacturing Corp.)/(Columbus Bank and Trust Co., GA LOC) 3,200,000
3,000,000 Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Smith Land
Holdings, L.L.C.)/(Columbus Bank and Trust Co., GA LOC) 3,000,000
15,000,000 Metropolitan Washington, DC Airports Authority, 3.65% CP
(Nationsbank, N.A., Charlotte LOC), Mandatory Tender 5/20/1997 15,000,000
570,000 Newport News, VA, UT GO, 7.10% Bonds (United States Treasury
PRF), 7/1/1997 (@100.25) 574,389
1,435,000 Newport News, VA, UT GO, 7.10% Bonds (United States Treasury
PRF), 7/1/1997 (@100.25) 1,446,168
470,000 Newport News, VA, UT GO, 7.10% Bonds (United States Treasury
PRF), 7/1/1997 (@100.5) 474,786
1,540,000 Newport News, VA, UT GO, 7.10% Bonds (United States Treasury
PRF), 7/1/1997 (@100.5) 1,555,813
1,000,000 Norfolk, VA, 4.50% Bonds, 2/1/1998 1,006,603
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
VIRGINIA -- CONTINUED
$ 3,000,000 Norfolk, VA, UT GO, 6.60% Bonds (United States Treasury PRF),
6/1/1997 (@102) $ 3,066,981
1,500,000 Norfolk, VA, UT GO, 6.70% Bonds (United States Treasury PRF),
6/1/1997 (@102) 1,533,445
1,425,000 Pulaski County, VA IDA, (Series 1995) Weekly VRDNs (Balogh Real
Estate Ltd. Partnership Mar-Bal Inc. Project)/(Bank One, Cleveland,
N.A. LOC) 1,425,000
865,000 Richmond, VA IDA, Industrial Development Revenue Refunding
Bonds (Series 1987-B), 3.70% TOBs (Crow-Klein-Macfarlane Project)/
(First Union National Bank of Virginia LOC), Optional Tender
5/15/1997 865,000
500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-1)
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC) 500,000
1,500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-3)
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC) 1,500,000
2,160,000 Richmond, VA Redevelopment & Housing Authority, (Series B-5)
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC) 2,160,000
3,555,000 Richmond, VA Redevelopment & Housing Authority, (Series B-6)
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC) 3,555,000
2,600,000 South Hill, VA IDA, IDRB (Series 1987) Weekly VRDNs (South Hill
Veneers, Inc Project)/(Bank One, Columbus, N.A. LOC) 2,600,000
2,500,000 Staunton, VA IDA, (Series 1997) Weekly VRDNs (Diebold, Inc.)/(Bank
One, Akron, N.A. LOC) 2,500,000
2,375,000 Tazewell County, VA IDA, (Series 1993) Weekly VRDNs (Seville
Properties Bluefield)/(Huntington National Bank, Columbus, OH LOC) 2,375,000
2,105,000 Virginia Beach, VA IDA, (Series 1993) Weekly VRDNs (Ocean Ranch
Motel Corp.)/(Nationsbank, N.A., Charlotte LOC) 2,105,000
1,200,000 Virginia Beach, VA, UT GO, 5.125% Bonds, 2/1/1998 1,212,510
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
VIRGINIA -- CONTINUED
$ 3,000,000 Virginia Peninsula Port Authority, Facility Revenue Refunding Bonds
(Series 1992), 3.65% CP (CSX Corp.)/(Bank of Nova Scotia, Toronto
LOC), Mandatory Tender 7/11/1997 $ 3,000,000
6,500,000 Virginia Peninsula Port Authority, Facility Revenue Refunding Bonds
(Series 1992), 3.70% CP (CSX Corp.)/(Bank of Nova Scotia, Toronto
LOC), Mandatory Tender 7/18/1997 6,500,000
4,944,000 Virginia Peninsula Port Authority, IDRB (Series 1986) Weekly VRDNs
(Eeco Project)/(Nationsbank, N.A., Charlotte LOC) 4,944,000
4,700,000 Virginia Small Business Financing Authority Weekly VRDNs (Moses
Lake Industries)/(KeyBank, N.A. LOC) 4,700,000
1,000,000 Virginia State Public Building Authority, (Series C), 4.35% Bonds,
8/1/1997 1,001,338
910,000 Virginia State Transportation Board, (Series A), 5.00% Bonds,
5/15/1997 910,500
4,860,000 Virginia State Transportation Board, (Series B), 5.00% Bonds,
5/15/1997 4,862,670
1,507,000 Williamsburg, VA IDA, (Series 1988) Weekly VRDNs (Colonial
Williamsburg Foundation Museum)/(Nationsbank, N.A.,
Charlotte LOC) 1,507,000
1,575,000 Winchester, VA IDA, (Series 1995) Weekly VRDNs (Midwesco Filter
Resources, Inc. Project)/(Harris Trust & Savings Bank, Chicago LOC) 1,575,000
3,400,000 Winchester, VA IDA, Hospital Refunding Revenue Bonds, 4.30%
Bonds (Winchester Medical Center, Inc.)/(AMBAC INS), 1/1/1998 3,415,470
5,000,000 York County, VA IDA, (Series 1985), 3.80% CP (Virginia Electric
Power Co.), Mandatory Tender 7/25/1997 5,000,000
Total 208,255,803
VIRGIN ISLANDS -- 1.4%
3,000,000 Virgin Islands HFA, Single Family Mortgage Revenue Refunding
Bonds (1995 Series B), 3.75% TOBs (FGIC INS), Mandatory
Tender 6/1/1997 3,000,000
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PUERTO RICO -- 2.3%
$ 1,500,000 Puerto Rico Electric Power Authority, (Series L), 8.40% Bonds
(United States Treasury PRF), 7/1/1997 (@102) $ 1,540,946
3,500,000 Puerto Rico Industrial, Medical & Environmental PCA, (Series 1983A),
3.80% TOBs (Reynolds Metals Co.)/(ABN AMRO Bank N.V.,
Amsterdam LOC), Optional Tender 9/1/1997 3,500,569
Total 5,041,515
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 216,297,318
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 56.4%
of the portfolio as calculated based upon total portfolio market
value.
(a)The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
100.00% 0.00%
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($217,945,721) at April 30, 1997.
The following acronyms are used throughout this portfolio:
ACES -- Adjustable Convertible Extendable Securities AMBAC -- American
Municipal Bond Assurance Corporation BANs -- Bond Anticipation Notes
CP -- Commercial Paper FGIC -- Financial Guaranty Insurance Company GO
- -- General Obligation HFA -- Housing Finance Authority IDA --
Industrial Development Authority IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue Bond INS -- Insured LIQ --
Liquidity Agreement LOC -- Letter of Credit MMMs -- Money Market
Municipals 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)
VIRGINIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 216,297,318
Cash 473,160
Income receivable 1,742,870
Deferred expenses 8,777
Total assets 218,522,125
LIABILITIES:
Payable for shares redeemed $ 301
Income distribution payable 559,561
Accrued expenses 16,542
Total liabilities 576,404
NET ASSETS for 217,945,721 shares outstanding $ 217,945,721
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$27,446,863 / 27,446,863 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$190,498,858 / 190,498,858 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $4,000,160
EXPENSES:
Investment advisory fee $ 440,076
Administrative personnel and services fee 82,926
Custodian fees 16,248
Transfer and dividend disbursing agent fees and expenses 28,498
Directors'/Trustees' fees 998
Auditing fees 6,457
Legal fees 2,586
Portfolio accounting fees 35,077
Shareholder services fee -- Institutional Shares 27,184
Shareholder services fee -- Institutional Service Shares 247,898
Share registration costs 15,888
Printing and postage 9,840
Insurance premiums 2,256
Miscellaneous 5,956
Total expenses 921,888
Waivers --
Waiver of investment advisory fee $(102,905)
Waiver of shareholder services fee -- Institutional Shares (27,184)
Waiver of shareholder services fee -- Institutional Service (130,263)
Shares
Total waivers (260,352)
Net expenses 661,536
Net investment income $3,338,624
</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
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 3,338,624 $ 5,112,556
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (342,391) (761,548)
Institutional Service Shares (2,996,233) (4,351,008)
Change in net assets resulting from distributions
to shareholders (3,338,624) (5,112,556)
SHARE TRANSACTIONS --
Proceeds from sale of shares 823,403,850 1,246,683,348
Net asset value of shares issued to shareholders in
payment of
distributions declared 1,943,710 3,397,142
Cost of shares redeemed (811,278,289) (1,195,928,451)
Change in net assets resulting from share 14,069,271 54,152,039
transactions
Change in net assets 14,069,271 54,152,039
NET ASSETS:
Beginning of period 203,876,450 149,724,411
End of period $ 217,945,721 $ 203,876,450
</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,
1997 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.04 0.03 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.04) (0.03) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.57% 3.24% 3.56% 2.57% 0.35%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.49%* 0.49% 0.49% 0.33% 0.09%*
Net investment income 3.13%* 3.19% 3.50% 2.56% 2.68%*
Expense waiver/reimbursement(c) 0.34%* 0.40% 0.42% 0.37% 1.04%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $27,447 $26,302 $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,
1997 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.02 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.02) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.51% 3.14% 3.46% 2.44% 0.34%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.61%* 0.59% 0.59% 0.40% 0.19%*
Net investment income 3.01%* 3.10% 3.38% 2.42% 2.67%*
Expense waiver/reimbursement(c) 0.22%* 0.30% 0.32% 0.37% 1.04%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $190,499 $177,575 $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, 1997 (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 sixteen
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 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 over a period not to exceed five years from the Fund's
commencement date.
USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue an unlimited number of full and fractional shares
of beneficial interest (without par value) for each class of shares.
At April 30, 1997, capital paid-in aggregated $217,945,721.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SHARES 1997 1996
<S> <C> <C>
Shares sold 48,901,613 113,430,564
Shares issued to shareholders in payment of distributions declared 752 6,598
Shares redeemed (47,757,435) (109,777,058)
Net change resulting from Institutional Share transactions 1,144,930 3,660,104
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1997 1996
<S> <C> <C>
Shares sold 774,502,237 1,133,252,784
Shares issued to shareholders in payment of distributions declared 1,942,958 3,390,544
Shares redeemed (763,520,854) (1,086,151,393)
Net change resulting from Institutional Service Share transactions 12,924,341 50,491,935
Net change resulting from share transactions 14,069,271 54,152,039
</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. 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 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- Federated Services Company 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, 1997, the
Fund paid $8,932 pursuant to this agreement.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997, 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 $290,518,975 and $321,220,000 respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 63% 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 percentage of investments
insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 12% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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.
VIRGINIA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229816
Cusip 314229824
G00133-01 (6/97)
[Graphic]
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of
Alabama Municipal Cash Trust, a portfolio of Federated Municipal
Trust, which covers the six-month period from November 1, 1996,
through April 30, 1997. 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 keep your ready cash pursuing double
tax-free income -- free from federal regular income tax and Alabama
income tax* -- through a portfolio concentrated in high-quality,
short-term Alabama municipal securities. At the end of the reporting
period, the fund's holdings were diversified among issuers that use
municipal bond financing for projects as varied as health care,
housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share. The fund's net assets stood at $197.6
million at the end of the reporting period.
Thank you for relying on Alabama Municipal Cash Trust to help your
ready cash pursue tax-free income every day. 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, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA,
Vice President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
Q
What were your strategies for the fund during the reporting period?
A The fund's average maturity at the beginning of the reporting period
was approximately 39 days, reflecting a neutral outlook on the
direction of interest rates as well as a lack of fixed-rate six month
to one-year paper in Alabama. As signs of strength in the economy
became more apparent, and as expectation of an imminent Fed tightening
grew in the first quarter of 1997, we emphasized the purchase of
shorter term fixed-rate paper while maintaining approximately 65%-70%
of the portfolio in seven-day variable rate demand notes ("VRDNs").
Seven-day VRDNs provide more portfolio responsiveness to interest rate
increases. We are now targeting an average maturity range between 35
and 45 days.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day VRDNs and short maturity commercial paper with purchases
of longer-term, six- to twelve-month Alabama fixed rate notes and
bonds. This portfolio structure takes advantage of the steepness of
the yield curve and continues to pursue a competitive yield over time.
Q
How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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 rose
over the reporting period. For the fund, the seven-day net yield on
April 30, 1997, was 3.58%, compared to 3.20% at the beginning of the
reporting period.* For individual investors at the highest federal and
state brackets, the latest yield was equivalent to a taxable yield of
6.46%.
Q
Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
ALABAMA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- 99.5%
ALABAMA--85.6%
$ 1,000,000 Alabama State Corrections Institution Finance
Authority, (1993 Series A), 4.20% Bonds (MBIA INS),
4/1/1998
$ 1,002,112
500,000 Alabama State Docks Department, Docks Facilities Revenue
Refunding Bonds, 6.90% Bonds (MBIA INS),
10/1/1997 506,656
3,000,000 Alabama State IDA Weekly VRDNs (Columbus Mills Inc. Project)/
(SunTrust Bank, Atlanta
LOC) 3,000,000
1,760,000 Alabama State IDA Weekly VRDNs (Sunshine Homes Inc.)/
(Amsouth Bank N.A., Birmingham
LOC) 1,760,000
3,970,000 Alabama State IDA, IDRB (Series 1994) Weekly VRDNs (Decatur
Aluminum Corp.)/(Star Bank, N.A., Cincinnati
LOC) 3,970,000
1,600,000 Alabama State IDA, IDRB Weekly VRDNs (Monarch Tile, Inc.
Project)/(Nationsbank of Texas, N.A.
LOC) 1,600,000
3,250,000 Alabama State IDA, IDRB's (Series 1996) Weekly VRDNs (IMI Cash
Valve Project)/(Regions Bank, Alabama
LOC) 3,250,000
3,350,000 Alabama State IDA, Industrial Revenue Bonds Weekly VRDNs
(Kappler USA, Inc. Project)/(National Bank of Canada, Montreal
LOC) 3,350,000
3,100,000 Alabama State IDA, Revenue Bonds Weekly VRDNs (Southern Bag
Corporation, Ltd.)/(SouthTrust Bank of Alabama, Birmingham
LOC) 3,100,000
1,000,000 Alabama State Public School & College Authority, 3.90% Bonds,
12/1/1997
1,001,550
1,100,000 Arab, AL IDB, Revenue Refunding Bonds (Series 1989)
Weekly VRDNs (SCI Manufacturing, Inc.)/(Bank of Tokyo-
Mitsubishi Ltd.
LOC) 1,100,000
1,660,000 Ashland, AL IDB, (Series 1996) Weekly VRDNs (Tru-Wood Cabinets)/
(Regions Bank, Alabama
LOC) 1,660,000
2,000,000 Birmingham, AL IDA Weekly VRDNs (Altec Industries, Inc.)/
(Wachovia Bank of Georgia N.A., Atlanta
LOC) 2,000,000
1,715,000 Birmingham, AL IDA Weekly VRDNs (Glasforms, Inc.)/(Regions
Bank, Alabama
LOC) 1,715,000
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ALABAMA--CONTINUED
$ 3,000,000 Birmingham, AL IDA, (Series 1997) Weekly
VRDNs (Millcraft, AL Inc.)/(Regions Bank, Alabama LOC)
$ 3,000,000
3,000,000 Birmingham, AL IDA, IDRB's (Series 1997) Weekly VRDNs
(J. J. & W, IV, Ltd.)/(Svenska Handelsbanken, Inc.
LOC) 3,000,000
2,500,000 Birmingham, AL IDA, Revenue Bonds (Series 1996) Weekly VRDNs
(American FireLog Corp.)/(Comerica Bank, Detroit, MI
LOC) 2,500,000
830,000 Birmingham-Carraway, AL Special Care Facilities Financing
Authority, Series A, 4.25% Bonds (Carraway Methodist Health
Systems)/(Connie Lee INS),
8/15/1997 831,511
1,415,000 Calhoun County, AL Economic Development Council Weekly VRDNs
(Food Ingredients Tech. Co.)/(Nationsbank, N.A., Charlotte
LOC) 1,415,000
4,230,000 Chatom, AL, (National Rural Utilities Series 1984M), 3.45% TOBs
(Alabama Electric Co-op, Inc.)/(National Rural Utilities
Cooperative Finance Corp. GTD), Optional Tender
8/15/1997 4,230,000
3,200,000 Chatom, AL, IDB PCR, 3.45% CP (Alabama Electric Co-op, Inc.)/
(National Rural Utilities Cooperative Finance Corp. GTD),
Mandatory Tender
5/22/1997 3,200,000
6,200,000 Chatom, AL, IDB PCR, 3.55% CP (Alabama Electric Co-op, Inc.)/
(National Rural Utilities Cooperative Finance Corp. GTD),
Mandatory Tender
5/9/1997 6,200,000
2,200,000 Cullman, AL IDB, IRB's (Series 1992) Weekly VRDNs (Pressac
Holdings PLC)/(NBD Bank, Michigan
LOC) 2,200,000
1,250,000 Cullman, AL IDB, Series 1989 Weekly VRDNs (Pressac Inc)/(NBD
Bank, Michigan
LOC) 1,250,000
3,000,000 Cullman, AL IDB, Variable Fixed Rate IDRB Weekly VRDNs
(National Bedding Company)/(Bank of America Illinois
LOC) 3,000,000
3,000,000 Decatur, AL IDB, Revenue Refunding Bonds (Series 1993) Weekly
VRDNs (Allied-Signal, Inc.) 3,000,000
2,000,000 Decatur, AL IDB, Solid Waste Disposal Revenue Bonds (Series 1996)
Weekly VRDNs (Trico Steel Company, L.L.C. Project)/(Chase
Manhattan Bank N.A., New York
LOC) 2,000,000
2,000,000 Dothan, AL IDB, Adjustable/Fixed Rate IDR's (Series 1997) Weekly
VRDNs (Henderson Steel Erectors)/(Regions Financial Corp.
LOC) 2,000,000
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ALABAMA--CONTINUED
$ 6,175,000 Fairfield, AL IDA, Variable Rate Environmental Improvement
Revenue Bonds (Series 1995), 3.45% TOBs (USX Corp.)/
(Wachovia Bank of NC, N.A., Winston-Salem LOC), Optional
Tender 8/5/1997
$ 6,175,000
1,525,000 Fort Payne, AL IDB, IDRB Weekly VRDNs (Ovalstrapping,
Inc.)/ (U.S. Bank of Washington N.A.
LOC) 1,525,000
4,000,000 Geneva County, AL IDB, Adjustable Fixed Rate IDRB's (Series
1996) Weekly VRDNs (Brooks AG Co., Inc.)/(Regions Bank,
Alabama
<TABLE>
<CAPTION>
<S> <C> <C>
LOC) 4,000,000
4,000,000 Guntersville, AL IDB, (Series 1995) Weekly VRDNs (Hercules
Rubber Co. Project)/(SouthTrust Bank of Alabama,
Birmingham
LOC) 4,000,000
3,725,000 Hamilton, AL IDB, Variable/Fixed Rate IDRB's Weekly
VRDNs (Tennessee River, Inc.)/(SouthTrust Bank of
Alabama, Birmingham
LOC) 3,725,000
3,415,000 Hoover, AL IDA Weekly VRDNs (Bud's Best Cookies, Inc.)/
(SouthTrust Bank of Alabama, Birmingham
LOC) 3,415,000
195,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project
(Huntsville, AL))/(Regions Bank, Alabama
LOC) 195,000
1,910,000 Huntsville, AL, Warrants (Series A), 4.75% Bonds,
11/1/1997 1,918,371
1,555,000 Ider, AL IDB, Industrial Development Bonds Weekly VRDNs
(Galbreath, Inc. Proj.)/(National Bank of Canada, Montreal
LOC) 1,555,000
3,545,000 Jefferson County, AL, Capital Appreciation Warrants Bonds
(MBIA INS),
4/1/1998 3,427,274
1,900,000 Livingston, AL IDB, Floating/Fixed Rate IDRB's (Series 1989)
Weekly VRDNs (Toin Corporation U.S.A.)/(Industrial Bank of
Japan Ltd., Tokyo
LOC) 1,900,000
3,500,000 Lowndes County, AL IDB, (Series 1996) Weekly VRDNs (Warren
Oil Company Project)/(First Union National Bank, Charlotte,
NC
LOC) 3,500,000
1,000,000 Mobile, AL Board of Water and Sewer Commissioners,
Refunding (Series A), 9.00% Bonds (United States Treasury PRF),
1/1/1998
(@100) 1,034,582
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ALABAMA--CONTINUED
$ 2,485,000 Mobile, AL Downtown Redevelopment Authority, (Series 1992)
Weekly VRDNs (Mitchell Project)/(SunTrust Bank, Atlanta LOC)
$ 2,485,000
3,000,000 Mobile, AL IDB, (1994 Series A), 3.65% TOBs
(International Paper Co.), Optional Tender
6/1/1997 3,000,000
1,000,000 Mobile, AL IDB, Pollution Control Refunding Revenue Bonds,
(Series 1992) Weekly VRDNs (Air Products & Chemicals,
Inc.)/ (Air Products & Chemicals, Inc.
GTD) 1,000,000
450,769 Mobile, AL, GO Warrants, 4.65% Bonds,
8/15/1997 450,769
3,000,000 Montgomery - Wynlakes Governmental Utility Services Corp., Bonds
(Series 1995-A) Weekly VRDNs (Vaughn Road, L.L.C., Project)/
(Amsouth Bank N.A., Birmingham
LOC) 3,000,000
800,000 Montgomery, AL IDB, (Series 1988A) Weekly VRDNs (Smith
Industries)/(SunTrust Bank, Atlanta
LOC) 800,000
2,665,000 Montgomery, AL IDB, (Series 1990-A) Weekly VRDNs (Industrial
Partners)/(Wachovia Bank of Georgia N.A., Atlanta
LOC) 2,665,000
4,000,000 Montgomery, AL IDB, (Series 1997) Weekly VRDNs (KINPAK INC.
Project)/(First Union National Bank of Florida
LOC) 4,000,000
3,000,000 Montgomery, AL IDB, IDRB's (Series 1996) Weekly VRDNs (CSC
Fabrication, Inc. Project)/(First Union National Bank, Charlotte,
NC
LOC) 3,000,000
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) 3,650,000
2,000,000 Phoenix City, AL IDB, (Series 1988), 3.55% CP (Mead Coated Board)/
(ABN AMRO Bank N.V., Amsterdam LOC), Mandatory Tender
5/28/1997
2,000,000
5,500,000 Phoenix City, AL IDB, (Series 1988), 3.55% CP (Mead
Coated Board)/ (ABN AMRO Bank N.V., Amsterdam LOC),
Mandatory Tender
6/10/1997
5,500,000
5,500,000 Phoenix City, AL IDB, (Series 1988), 3.70% CP (Mead
Coated Board)/ (ABN AMRO Bank N.V., Amsterdam LOC),
Mandatory Tender
7/24/1997
5,500,000
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ALABAMA--CONTINUED
$ 2,900,000 Phoenix City, AL IDB, (Series 1988), 3.75% CP (Mead Coated
Board)/(ABN AMRO Bank N.V., Amsterdam LOC), Mandatory
Tender 9/9/1997
$ 2,900,000
</TABLE>
850,000 Piedmont, AL IDB Weekly VRDNs (Industrial Partners)/
(Wachovia Bank of Georgia N.A., Atlanta
LOC) 850,000
2,500,000 Prattville, AL IDB, IDR Bonds Weekly VRDNs (Kuhnash
Properties/Arkay Plastics Project)/(PNC Bank, Ohio, N.A.
LOC) 2,500,000
3,150,000 Scottsboro, AL IDB, (Series 1994) Weekly VRDNs (Maples
Industries, Inc.)/(Amsouth Bank N.A., Birmingham
<TABLE>
<CAPTION>
<S> <C> <C> <C>
LOC) 3,150,000
1,250,000 Scottsboro, AL IDB, IDRB (Series 1991) Weekly VRDNs (Maples
Industries, Inc.)/(Amsouth Bank N.A., Birmingham
LOC) 1,250,000
5,000,000 Selma, AL IDB, Annual Tender PCR Refunding Bonds (1993
Series B), 4.15% TOBs (International Paper Co.), Optional
Tender
7/15/1997 5,000,000
500,000 St. Clair County, AL IDB, (Series 1993) Weekly VRDNs (Ebsco
Industries, Inc.)/(National Australia Bank, Ltd., Melbourne
LOC) 500,000
300,000 Sumter County, AL IDA, Industrial Revenue Bonds (Series
1995A) Weekly VRDNs (Fulghum Fibres Project (AL))/
(Regions Bank, Alabama
LOC) 300,000
1,100,000 Sumter County, AL IDA, Industrial Revenue Bonds (Series
1995B) Weekly VRDNs (Canal Chip Project)/(Regions Bank,
Alabama
LOC) 1,100,000
3,000,000 Troy, AL IDB, IRB's (Series 1996A) Weekly VRDNs (Hudson
Sauces & Dressings, Inc.)/(Amsouth Bank N.A., Birmingham
LOC)
3,000,000
2,800,000 Tuscaloosa County, AL IDA, 1995 Series A Weekly VRDNs
(Tuscaloosa Steel Corporation)/(Bayerische Landesbank
Girozentrale
LOC) 2,800,000
2,000,000 Tuskegee, AL IDB, IDRB (Series 1995) Weekly VRDNs (Concrete
Company (The))/(Columbus Bank and Trust Co., GA
LOC) 2,000,000
1,185,000 University of South Alabama, University Tuition Revenue
Refunding Bonds (Series 1996B), 3.80% Bonds (MBIA INS),
11/15/1997
1,185,000
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ALABAMA--CONTINUED
$ 2,400,000 Vincent, AL IDB, (Series 1993) Weekly VRDNs (Ebsco Industries,
Inc.)/(National Australia Bank, Ltd., Melbourne LOC)
$ 2,400,000
Total
169,197,825
PUERTO RICO -- 13.9%
8,000,000 Commonwealth of Puerto Rico, Series 1997A, 4.00% TRANs,
7/30/1997
8,011,040
2,050,000 Puerto Rico Electric Power Authority, (Series K), 9.25% Bonds
(United States Treasury PRF), 7/1/1997
(@102) 2,108,804
3,500,000 Puerto Rico Electric Power Authority, (Series K), 9.375% Bonds
(United States Treasury PRF), 7/1/1997
(@102) 3,602,019
1,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (Series 1983A),
3.80% TOBs (Reynolds Metals Co.)/(ABN AMRO Bank N.V.,
Amsterdam LOC), Optional Tender
9/1/1997 1,000,000
3,000,000 Puerto Rico Industrial, Medical & Environmental PCA,
Pollution Control Facilities Financing Authority
(Series 1983 A), 3.75% TOBs (Schering Plough
Corp.)/(Morgan Guaranty Trust Co., New York LOC),
Optional Tender
12/1/1997 3,002,575
6,600,000 Puerto Rico Industrial, Tourist, Education, Medical & Environmental
Control Finance Authority, (Series 1994A), 3.45% CP (Inter American
University of Puerto Rico)/(Banque Paribas, Paris LOC), Mandatory
Tender
5/13/1997 6,600,000
2,000,000 Puerto Rico Industrial, Tourist, Education, Medical & Environmental
Control Finance Authority, (Series 1994A), 3.80% CP (Inter American
University of Puerto Rico)/(Banque Paribas, Paris LOC), Mandatory
Tender
6/11/1997 2,000,000
1,000,000 Puerto Rico Public Building Authority, Series H, 7.875% Bonds (United
States Treasury PRF), 7/1/1997
(@102) 1,026,657
Total
27,351,095
TOTAL INVESTMENTS (AT AMORTIZED COST)(B)
$ 196,548,920
Securities that are subject to Alternative Minimum Tax represent 63.1%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1 or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First Tier
securities. Securities rated in the second highest short-term rating
category (and unrated securities of comparable quality) are identified
as Second Tier securities. The fund follows applicable regulations in
determining whether a security is rated and whether a security rated
by multiple NRSROs in different rating categories should be identified
as a First or Second Tier security.
At April 30 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
95.93% 4.07%
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($197,610,673) at April 30, 1997.
The following acronyms are used throughout this portfolio:
CP -- Commercial Paper
GO -- General Obligation
GTD -- Guaranty
IDA -- Industrial Development Authority IDB -- Industrial Development
Bond IDR -- Industrial Development Revenue IDRB -- Industrial
Development Revenue Bond INS -- Insured IRB -- Industrial Revenue Bond
LOC -- Letter of Credit MBIA -- Municipal Bond Investors Assurance PCA
- -- Pollution Control Authority PCR -- Pollution Control Revenue PLC --
Public Limited Company PRF -- Prerefunded TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes VRDNs -- Variable Rate
Demand Notes
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
ASSETS:
Total investments in securities, at amortized cost and value $
196,548,920
Cash
272,135
Income receivable
1,381,367
Deferred expenses
12,196
Total assets
198,214,618
LIABILITIES:
Payable for shares redeemed $ 834
Income distribution payable 565,747
Accrued expenses 37,364
Total liabilities
603,945
NET ASSETS for 197,610,673 shares outstanding $
197,610,673
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$197,610,673 / 197,610,673 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, 1997 (UNAUDITED)
INVESTMENT INCOME:
<TABLE>
<CAPTION>
<S> <C>
Interest $
4,153,185
EXPENSES:
Investment advisory fee $ 570,160
Administrative personnel and services fee 86,106
Custodian fees 9,975
Transfer and dividend disbursing agent fees and expenses 18,230
Directors'/Trustees' fees 1,463
Auditing fees 5,670
Legal fees 2,105
Portfolio accounting fees 32,662
Shareholder services fee 285,080
Share registration costs 17,299
Printing and postage 7,314
Insurance premiums 2,473
Miscellaneous 8,531
Total expenses 1,047,068
Waivers --
Waiver of investment advisory fee $ (403,472)
Waiver of shareholder services fee (11,403)
Total waivers (414,875)
Net expenses
632,193
Net investment income $
3,520,992
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
ENDED
(UNAUDITED) OCTOBER
31,
APRIL 30, 1997 1996
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 3,520,992 $
6,674,235
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income 3,520,992)
(6,674,235)
SHARE TRANSACTIONS --
Proceeds from sale of shares 313,012,555
712,795,816
Net asset value of shares issued to shareholders in payment of
distributions declared 1,807,161
3,730,255
Cost of shares redeemed (350,929,189)
(692,296,354)
Change in net assets resulting from share transactions (36,109,473)
24,229,717
Change in net assets (36,109,473)
24,229,717
NET ASSETS:
Beginning of period 233,720,146
209,490,429
End of period $ 197,610,673 $
233,720,146
(See Notes which are an integral part of the Financial Statements)
ALABAMA MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995
1994(A)
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 0.04
0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.04)
(0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $
1.00
TOTAL RETURN(B) 1.55% 3.22% 3.66%
2.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.55% 0.48%
0.36%*
Net investment income 3.09%* 3.18% 3.59%
2.76%*
Expense waiver/reimbursement(c) 0.36%* 0.37% 0.44%
0.62%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $197,611 $233,720 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Alabama Municipal Cash Trust (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. 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 year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER -- Investment transactions are accounted for on the trade
date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue an unlimited number of full and fractional shares
of beneficial interest (without par value). At April 30, 1997, capital
paid-in aggregated $197,610,673. Transactions in shares were as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR
SIX MONTHS
ENDED
ENDED
OCTOBER 31,
APRIL 30, 1997
1996
Shares sold 313,012,555
712,795,816
Shares issued to shareholders in payment of distributions declared 1,807,161
3,730,255
Shares redeemed (350,929,189)
(692,296,354)
Net change resulting from share transactions (36,109,473)
24,229,717
</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
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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES -- Organizational and start-up
administrative service expenses of $57,711 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, 1997, the Fund paid $7,535 pursuant to this agreement.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $178,206,530 and
$233,320,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 85%
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
percentage 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.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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, 1997
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229790
G01120-01 (6/97)
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,
1996, through April 30, 1997. 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 keep your ready cash pursuing double
tax-free income -- free from federal regular income tax and North
Carolina state income tax* -- through a portfolio concentrated in
high-quality, short-term North Carolina municipal securities. At the
end of the reporting period, the fund's holdings were diversified
among issuers that use municipal bond financing for projects as varied
as health care, housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
of $0.02 per share. The fund's net assets stood at $100.9 million at
the end of the reporting period.
Thank you for relying on North Carolina Municipal Cash Trust to help
your ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected
demand, voted to raise the federal funds target rate from 5.25% to
5.50%. The move was viewed as being pre-emptive against the threat
of future inflationary pressures possibly brought about by tight
labor market conditions. Until that point, movements in interest
rates reflected shifting market sentiment about the need for the Fed
to move to a more restrictive policy. As the reporting period began
in November 1996, the economy had been showing signs of slowing,
thereby allaying the market's fears about inflation. Then, in
December, the market's uneasiness was once more ignited as a string
of economic statistics showed stronger growth and Fed Chairman Alan
Greenspan made cautionary statements regarding inflation and
"irrational exuberance" in the equity market. With inflation still
appearing to be benign, the market tolerated a steady pace of growth
into early 1997. However, Chairman Greenspan's Humphrey-Hawkins
testimony before Congress in late February marked a turning point
for the short-term money markets -- indeed the bond and equity
markets as well -- as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal
in interest rate movement and the market's perception about future
Fed policy. The ensuing weeks brought continued evidence of
persistent strength, and culminated in the Fed's action at the
Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February,
and by the time of the Fed tightening in late March, had built in
much of the expectations regarding the Fed decision. In April, the
financial markets continued to focus on the likelihood of an
additional tightening move later in May, causing short-term yields
to rise even further. Yields on the six-month Treasury bill rose
sharply over this interim period, moving from a low of 5.20% in
mid-February to a high of 5.68% in late April before falling back to
5.53% by the end of reporting period.
Q
What were your strategies for the fund during the reporting period?
A The fund's average maturity at the beginning of the reporting period
was very short at 33 days, reflecting a lack of supply of money
market eligible North Carolina bonds. We extended the average
maturity in November and December as attractively priced bonds
became available. However, as signs of strength in the economy
became more apparent, and as expectation of an imminent Fed
tightening grew in the first quarter of 1997, we shortened the
average maturity target range to between 45 and 55 days. We also
emphasized the purchase of shorter term fixed-rate paper while
increasing the percentage of the portfolio in seven-day variable
rate demand notes ("VRDNs"). Seven-day VRDNs provide more portfolio
responsiveness to interest rate increases.
Once an average maturity range is targeted, the portfolio attempts
to maximize performance through ongoing relative value analysis.
Relative value analysis includes the comparison of the richness or
cheapness of municipal securities to one another as well as
municipals to taxable instruments, such as Treasury securities. The
fund's portfolio remained barbelled in structure, which combined a
significant portion in seven-day VRDNs and short maturity commercial
paper with purchases of longer-term, six- to twelve-month North
Carolina exempt fixed rate notes and bonds. This portfolio structure
takes advantage of the steepness of the yield curve and continues to
pursue a competitive yield over time.
Q
How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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 rose
over the reporting period. For the fund, the seven-day net yield on
April 30, 1997 was 3.66%, compared to 3.04% at the beginning of the
reporting period.* For individual investors at the highest federal
and state tax brackets, the latest yield was equivalent to a taxable
yield of 6.95%.
Q
Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move
by the Fed should help to preclude the need for more aggressive
action down the road by preventing the build-up of inflationary
pressures. We would look to see moderately higher short-term
interest rates throughout the course of the year, but not to the
extent evidenced in the last tightening cycle in 1994. As such, we
will likely continue in our modestly defensive stance for the
portfolio until market conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
NORTH CAROLINA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(A)SHORT-TERM MUNICIPALS -- 99.1%
<C> <S> <C>
NORTH CAROLINA -- 87.0%
$ 1,755,000 Alamance County, NC Industrial Facilities & Pollution Control Financing
Authority, (Series B) Weekly VRDNs (Culp, Inc.)/(Wachovia Bank of NC,
N.A., Winston-Salem LOC) $ 1,755,000
3,500,000 Bladen County, NC Industrial Facilities & Pollution Control Financing
Authority, (Series 1993) Weekly VRDNs (BCH Energy, Limited
Partnership)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 3,500,000
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) 1,600,000
1,335,000 Burke County, NC Industrial Facilities & Pollution Control Financing
Authority Weekly VRDNs (Norwalk Furniture Corp. & Hickory
Furniture)/(Branch Banking & Trust Co., Wilson LOC) 1,335,000
820,000 Catawba County, NC Industrial Facilities & Pollution Control Financing
Authority, (Series 1992) Weekly VRDNs (WSMP, Inc.)/(Nationsbank, N.A.,
Charlotte LOC) 820,000
1,800,000 Catawba County, NC Industrial Facilities & Pollution Control Financing
Authority, (Series 1994) Weekly VRDNs (Ethan Allen Inc. Project)/
(Bankers Trust Co., New York LOC) 1,800,000
2,435,000 Charlotte, NC, UT GO, 5.50% Bonds, 5/1/1997 2,435,000
3,615,000 Cleveland County, NC Industrial Facilities and Pollution Control
Financing Authority, IDRB (Series 1990) Weekly VRDNs (MetalsAmerica,
Inc. Project)/(Nationsbank, N.A., Charlotte LOC) 3,615,000
1,550,000 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) 1,550,000
920,000 Davidson County, NC Industrial Facilities & PCFA, IDRB (Series 1995)
Weekly VRDNs (Lawrence Industries, Inc. Project)/(Branch Banking &
Trust Co., Wilson LOC) 920,000
3,501,000 Duplin County, NC Water District, (Series G), 3.501% BANs, 8/6/1997 3,501,000
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) 1,800,000
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
<C> <S> <C>
NORTH CAROLINA -- CONTINUED
$ 8,550,000 Halifax County, NC Industrial Facilities & PCFA Weekly VRDNs
(Flambeau Airmold Project)/(Norwest Bank Minnesota, Minneapolis LOC) $ 8,550,000
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) 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) 1,000,000
2,600,000 Lincoln County, NC Industrial Facilities & Pollution Control Financing
Authority, Industrial Revenue Bonds Weekly VRDNs (Leucadia, Inc.
Project)/(National Bank of Canada, Montreal LOC) 2,600,000
4,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs (Weyerhaeuser Co.) 4,000,000
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) 2,500,000
1,000,000 Mecklenburg County, NC, (Series 1996) Weekly VRDNs (YMCA of Greater
Charlotte Project)/(Wachovia Bank of NC, N.A., Winston-Salem LOC) 1,000,000
3,255,000 New Hanover County, NC PCFA Weekly VRDNs (Efson, Inc.)/(Branch
Banking & Trust Co., Wilson LOC) 3,255,000
1,445,000 New Hanover County, NC PCFA, (Series 1990) Weekly VRDNs (Wilmington
Machinery Inc. Project)/(Branch Banking & Trust Co., Wilson LOC) 1,445,000
2,800,000 North Carolina Agricultural Finance Authority, (Series 1996) Weekly
VRDNs (Coastal Carolina Gin L.L.C. Project)/(Branch Banking & Trust
Co., Wilson LOC) 2,800,000
1,070,000 North Carolina Medical Care Commission Hospital, (Series 1995), 4.40%
Bonds (Gaston Memorial Hospital Project), 2/15/1998 1,075,729
4,000,000 North Carolina Municipal Power Agency No. 1, (Series A), 3.45% CP
(Morgan Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), Mandatory Tender 7/15/1997 4,000,000
7,000,000 North Carolina Municipal Power Agency No. 1, Catawba Electric
Revenue Refunding Bonds, 7.875% Bonds (United States Treasury PRF),
1/1/1998 (@102) 7,330,610
2,000,000 North Carolina State, UT GO, 6.10% Bonds, 3/1/1998 2,041,251
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
<C> <S> <C>
NORTH CAROLINA -- CONTINUED
$ 4,000,000 Onslow County, NC Industrial Facilities & Pollution Control Financing
Authority Weekly VRDNs (Mine Safety Appliances Co.)/(Sanwa Bank Ltd,
Osaka LOC) $ 4,000,000
1,500,000 Piedmont, NC Airport Authority Weekly VRDNs (Triad International
Maintenance Corp.)/(Mellon Bank N.A., Pittsburgh LOC) 1,500,000
1,900,000 Randolph County, NC IDA, (Series 1990) Weekly VRDNs (Wayne Steel,
Inc.)/(Bank One, Akron, N.A. LOC) 1,900,000
5,700,000 Wake County, NC Industrial Facilities & PCFA, (Series 1990B), 3.55% CP
(Carolina Power & Light Co.)/(Fuji Bank, Ltd., Tokyo LOC), Mandatory
Tender 6/13/1997 5,700,000
2,000,000 Wake County, NC, UT GO, 4.70% Bonds, 3/1/1998 2,019,456
1,900,000 Washington County, NC Industrial Facilities and Pollution Control
Financing Authority, IDRB (Series 1995) Weekly VRDNs (Mackeys Ferry
Sawmill, Inc. Project)/(Wachovia Bank of NC, N.A., Winston-Salem LOC) 1,900,000
3,541,079 Wayne County, NC PCFA Weekly VRDNs (Cooper Industries, Inc.)/
(Sanwa Bank Ltd, Osaka LOC) 3,541,079
Total 87,789,125
PUERTO RICO -- 9.2%
3,000,000 Puerto Rico Electric Power Authority, (Series K), 9.375% Bonds (United
States Treasury PRF), 7/1/1997 (@102) 3,087,445
3,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (Series 1983A),
3.80% TOBs (Reynolds Metals Co.)/(ABN AMRO Bank N.V., Amsterdam
LOC), Optional Tender 9/1/1997 3,000,000
1,000,000 Puerto Rico Industrial, Medical & Environmental PCA, Pollution Control
Facilities Financing Authority (Series 1983A), 3.75% TOBs (Schering
Plough Corp.)/(Morgan Guaranty Trust Co., New York LOC), Optional
Tender 12/1/1997 1,000,858
2,200,000 Puerto Rico Industrial, Tourist, Education, Medical & Environmental
Control Finance Authority, (Series 1994A), 3.80% CP (Inter American
University of Puerto Rico)/(Banque Paribas, Paris LOC), Mandatory
Tender 6/11/1997 2,200,000
Total 9,288,303
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
<C> <S> <C>
VIRGIN ISLANDS--2.9%
$ 3,000,000 Virgin Islands HFA, Single Family Mortgage Revenue Refunding Bonds
(1995 Series B), 3.75% TOBs (FGIC INV), Mandatory Tender 6/1/1997 $ 3,000,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $100,077,428
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 48.3%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities, rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1 or MIG-2 by Moody's
Investors Service, Inc., or FIN-1+, FIN-1 and FIN-2 by Fitch
Investors Service, Inc. are all considered rated one of the two
highest short-term ratings categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security. At April
30, 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
<C> <C>
100% 0%
</TABLE>
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($100,942,715) at April 30, 1997.
The following acronyms 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 IFA --
Industrial Finance Authority INV -- Investment Agreement LOCs --
Letter(s) of Credit LOC -- Letter of Credit PCA -- Pollution Control
Authority PCFA -- Pollution Control Finance Authority 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)
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $100,077,428
Cash 229,747
Income receivable 900,577
Deferred expenses 12,769
Total assets 101,220,521
LIABILITIES:
Income distribution payable $269,178
Accrued expenses 8,628
Total liabilities 277,806
NET ASSETS for 100,942,715 shares outstanding $100,942,715
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$100,942,715 / 100,942,715 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 2,444,484
EXPENSES:
Investment advisory fee $ 334,720
Administrative personnel and services fee 61,959
Custodian fees 6,880
Transfer and dividend disbursing agent fees and expenses 14,867
Directors'/Trustees' fees 1,084
Auditing fees 6,093
Legal fees 2,040
Portfolio accounting fees 21,054
Shareholder services fee 167,360
Share registration costs 16,231
Printing and postage 5,561
Insurance premiums 1,749
Miscellaneous 9,043
Total expenses 648,641
Waivers --
Waiver of investment advisory fee (250,725)
Net expenses 397,916
Net investment income $ 2,046,568
</TABLE>
(See Notes which are an integral part of the Financial Statements)
NORTH CAROLINA MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 2,046,568 $ 3,699,402
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income (2,046,568) (3,699,402)
SHARE TRANSACTIONS --
Proceeds from sale of shares 316,873,955 825,948,456
Net asset value of shares issued to shareholders in payment of
distributions declared 1,471,648 2,898,862
Cost of shares redeemed (355,151,413) (788,700,740)
Change in net assets resulting from share transactions (36,805,810) 40,146,578
Change in net assets (36,805,810) 40,146,578
NET ASSETS:
Beginning of period 137,748,525 97,601,947
End of period $ 100,942,715 $137,748,525
</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)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994(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 0.04 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.04) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.54% 3.23% 3.51% 2.06%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.59%* 0.59% 0.59% 0.49%*
Net investment income 3.06%* 3.17% 3.46% 2.54%*
Expense waiver/reimbursement(c) 0.37%* 0.42% 0.40% 0.44%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $100,943 $137,749 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
North Carolina Municipal Cash Trust (the "Fund"). The financial
statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest
is limited to the portfolio in which shares are held. 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 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 over a period not to exceed five years from the
Fund's commencement date.
USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts of assets, liabilities, expenses and revenues reported in
the financial statements. Actual results could differ from those
estimated.
OTHER -- Investment transactions are accounted for on the trade
date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue an unlimited number of full and fractional shares
of beneficial interest (without par value). At April 30, 1997, capital
paid-in aggregated $100,942,715.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX YEAR
MONTHS ENDED
ENDED OCTOBER 31,
APRIL 30, 1997 1996
<S> <C> <C>
Shares sold 316,873,955 825,948,456
Shares issued to shareholders in payment of distributions declared 1,471,648 2,898,862
Shares redeemed (355,151,413) (788,700,740)
Net change resulting from share transactions (36,805,810) 40,146,578
</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
Fund for the period. The fee paid to FSS is used to finance certain
services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ,
through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Trust's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES -- Organizational and start-up
administrative service expenses of $53,386 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, 1997, the Fund paid $6,970 pursuant to this agreement.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $143,290,000 and
$172,980,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
6. 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, 1997, 74.5% 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 percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
9.8% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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.
NORTH CAROLINA
MUNICIPAL
CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229782
G01177-01 (6/97)
[Graphic]
- --------------------------------------------------------------------------------
FLORIDA
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
Federated Investors Logo
Cusip 314229785
Cusip 314229683
G00827-02 (6/97)
Recyled Paper Logo
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, 1996 through
April 30, 1997. 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
tax-free income free from federal regular income tax.* In addition,
the fund is free from the Florida intangibles tax. At the end of the
reporting period, the fund's municipal bond holdings were diversified
among Florida issuers that use municipal bond financing for projects
as varied as health care, housing, community development, and
transportation.
This tax-free advantage means you can 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 reporting period, the fund paid tax-free dividends of $0.02
per share for Institutional Shares and $0.01 per share for Cash II
Shares. The fund's net assets stood at $519.8 million at the end of
the reporting period.
Thank you for relying on Florida Municipal Cash Trust to help your
ready cash pursue tax-free income every day. 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, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q
Can you comment on the economy and the interest rate environment
during the six month reporting period?
A
Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the
"Fed") brought about the first change in monetary policy in over
a year. On March 25, 1997, the Fed,
in the face of stronger than expected demand, voted to raise the
federal funds target rate from 5.25% to 5.50%. The move was viewed as
being pre-emptive against the threat of future inflationary pressures
possibly brought about by tight labor market conditions. Until that
point, movements in interest rates reflected shifting market sentiment
about the need for the Fed to move to a more restrictive policy. As
the reporting period began in November 1996, the economy had been
showing signs of slowing, thereby allaying the market's fears about
inflation. Then, in December, the market's uneasiness was once more
ignited as a string of economic statistics showed stronger growth and
Fed Chairman Alan Greenspan made cautionary statements regarding
inflation and "irrational exuberance" in the equity market. With
inflation still appearing to be benign, the market tolerated a steady
pace of growth into early 1997. However, Chairman Greenspan's
Humphrey-Hawkins testimony before Congress in late February marked a
turning point for the short-term money markets--indeed the bond and
equity markets as well--as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal in
interest rate movement and the market's perception about future Fed
policy. The ensuing weeks brought continued evidence of persistent
strength, and culminated in the Fed's action at the Federal Open
Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
Q
What were your strategies for the fund during the reporting
period?
A
The fund's average maturity at the beginning of the reporting
period was approximately 49 days, reflecting a neutral outlook on
the direction of interest rates. As signs of strength in the
economy became more apparent
and as expectations of an imminent Fed tightening grew in the first
quarter of 1997, we emphasized the purchase of shorter term fixed-rate
paper while adding to the portion of the portfolio invested in
seven-day variable rate demand notes ("VRDNs"). Seven-day VRDNs
provide
- --------------------------------------------------------------------------------
more portfolio responsiveness to interest rate increases. At the end
of the reporting period, the fund's average maturity was at 49 days,
with a target range between 40 and 50 days.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day VRDNs and short maturity commercial paper with purchases
of longer-term, six-to twelve-month fixed rate notes. This portfolio
structure continues to pursue a competitive yield over time.
Q
How has the fund's yield responded to this rate environment?
A
The fund's yield was affected by Fed policy (interest rate
increases), 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 rose over the reporting period. For the
fund, the seven-day net yield of the Institutional Shares on April 30,
1997, was 3.63%, compared to 3.12% at the beginning of the reporting
period.* For the Cash II Shares, the seven-day net yield was 3.37% at
the end of the reporting period compared to 2.96% six months ago.*
Q
Looking through 1997, what is your outlook for short-term rates?
A
Although the Fed decided to hold short-term interest rates steady
in the March meeting, our expectations are that the Fed will find
cause to tighten monetary policy further in 1997--perhaps as soon
as in July. It is also
anticipated that the overall tightening cycle will not be long in
terms of magnitude or duration. The pre-emptive move by the Fed should
help to preclude the need for more aggressive action down the road by
preventing the build-up of inflationary pressures. We would look to
see moderately higher short-term interest rates throughout the course
of the year, but not to the extent evidenced in the last tightening
cycle in 1994. As such, we will likely continue in our modestly
defensive stance for the portfolio until market conditions indicate
otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
FLORIDA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--99.5%
- -----------------------------------------------------------------------------------
FLORIDA--70.6%
----------------------------------------------------------------
$ 6,500,000 Brevard County, FL School District, Series 1996, 4.20% TANs,
6/30/1997 $ 6,505,733
----------------------------------------------------------------
3,860,000 Broward County, FL HFA, (CR-5), 3.65% TOBs (GNMA COL)/ (Citibank
NA, New York LIQ), Optional Tender 5/1/1997 3,860,000
----------------------------------------------------------------
3,000,000 Broward County, FL HFA, Multifamily Housing Revenue Refunding
Bonds (1995 Series B) Weekly VRDNs (Harbour Town of Jacaranda
Project)/(SouthTrust Bank of Alabama, Birmingham LOC) 3,000,000
----------------------------------------------------------------
3,240,000 Broward County, FL Health Facility Authority, Revenue Bonds
Weekly VRDNs (John Knox Village of Florida)/(First Union
National Bank, Charlotte, N.C. LOC) 3,240,000
----------------------------------------------------------------
1,130,000 Broward County, FL, IDRB (Series 1993) Weekly VRDNs (American
Whirlpool Products Corp. Project)/(NationsBank, South LOC) 1,130,000
----------------------------------------------------------------
1,000,000 Broward County, FL, IDRB's (Series 1997) Weekly VRDNs (Fast Real
Estate Partners, Ltd.)/(SunTrust Bank, Central Florida LOC) 1,000,000
----------------------------------------------------------------
8,000,000 Charlotte County, FL School District, Series 1996, 4.00% TANs,
6/30/1997 8,004,106
----------------------------------------------------------------
14,190,000 (b) Clipper Florida Tax-Exempt Trust, Class A Certificates of
Participation, Series 1996-3B Weekly VRDNs (Escambia County, FL
HFA)/(State Street Bank and Trust Co. LOC) 14,190,000
----------------------------------------------------------------
9,000,000 Dade County, FL HFA, (Series 1996), 4.00% TOBs (FGIC INV),
Mandatory Tender 10/1/1997 9,000,000
----------------------------------------------------------------
1,900,000 Dade County, FL HFA, Hospital Revenue Bonds (Series 1995) Weekly
VRDNs (Miami Children's Hospital Project)/(AMBAC INS)/(SunTrust
Bank, Atlanta LIQ) 1,900,000
----------------------------------------------------------------
4,170,000 Dade County, FL IDA Weekly VRDNs (Futernick Associates, Inc.)/
(First Union National Bank, Charlotte, N.C. LOC) 4,170,000
----------------------------------------------------------------
1,000,000 Dade County, FL IDA, (Series 1985C) Weekly VRDNs (Dolphins
Stadium)/(Societe Generale, Paris LOC) 1,000,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 1,550,000 Dade County, FL IDA, IDRB (Series 1995) Weekly VRDNs (June
Leasing Co. Project (FL))/(First Union National Bank of Florida
LOC) $ 1,550,000
----------------------------------------------------------------
2,000,000 Dade County, FL IDA, IDRB's (Series 1996A) Weekly VRDNs (U.S.
Holdings, Inc.)/(First Union National Bank of Florida LOC) 2,000,000
----------------------------------------------------------------
1,100,000 Dade County, FL IDA, Industrial Development Revenue Refunding
Bonds Weekly VRDNs (Continental Farms, Inc.)/(Nationsbank, N.A.,
Charlotte LOC) 1,100,000
----------------------------------------------------------------
2,550,000 Dade County, FL Resource Recovery Facilities, 4.00% Bonds (AMBAC
INS), 10/1/1997 2,550,000
----------------------------------------------------------------
3,000,000 Dade County, FL School District, 4.50% Bonds (MBIA INS),
2/15/1998 3,020,015
----------------------------------------------------------------
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) 3,000,000
----------------------------------------------------------------
2,000,000 (b) Escambia County, FL HFA, P-Floats PA-129 Weekly VRDNs
(Merrill Lynch Capital Services, Inc. LIQ) 2,000,000
----------------------------------------------------------------
7,500,000 Escambia County, FL HFA, Single Family Mortgage Revenue Bonds
(Series B), 3.75% TOBs (Bayerische Landesbank Girozentrale INV),
Mandatory Tender 2/20/1998 7,500,000
----------------------------------------------------------------
6,140,000 Eustis Health Facilities Authority, FL, (Series 1985) Weekly
VRDNs (Waterman Medical Center)/(Banque Paribas, Paris LOC) 6,140,000
----------------------------------------------------------------
1,400,000 Florida HFA, (Series 1989 E) Weekly VRDNs (Fairmont Oaks
Project)/(Comerica Bank, Detroit, MI LOC) 1,400,000
----------------------------------------------------------------
3,300,000 Florida HFA, (Series 1996 U) Weekly VRDNs (Heron Park Project)/
(NationsBank, South LOC) 3,300,000
----------------------------------------------------------------
4,000,000 Florida HFA, (Series 2-CR-25C), 3.50% TOBs (FGIC INS)/
(Citibank NA, New York LIQ), Optional Tender 6/15/1997 4,000,000
----------------------------------------------------------------
6,920,000 (b) Florida HFA, Homeowner Mortgage Revenue Bonds PT-88 (Series
1996-3) Weekly VRDNs (Banco Santander LIQ) 6,920,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 4,700,000 Florida HFA, Housing Revenue Bonds (Series J) Weekly VRDNs
(Ashley Lake Project)/(Barclays Bank PLC, London LOC) $ 4,700,000
----------------------------------------------------------------
2,500,000 (b) Florida State Department of Transportation, (Series 1993A)
Weekly VRDNs (Norwest Bank Minnesota, Minneapolis LOC) 2,500,000
----------------------------------------------------------------
3,620,000 Gainesville, FL Utilities Systems, (Series A), 7.75% Bonds
(United States Treasury PRF), 10/1/1997 (@102) 3,749,504
----------------------------------------------------------------
7,500,000 Greater Orlando (FL) Aviation Authority, Airport Facilities
Subordinated CP Notes (Series B), 3.60% CP, Mandatory Tender
6/11/1997 7,500,000
----------------------------------------------------------------
6,300,000 Greater Orlando (FL) Aviation Authority, Airport Facilities
Subordinated CP Notes (Series B), 3.70% CP, Mandatory Tender
6/6/1997 6,300,000
----------------------------------------------------------------
7,000,000 Gulf Breeze, FL, Variable Rate Demand Revenue Bonds (Series
1995A) Weekly VRDNs (Florida Municipal Bond Fund)/ (Barnett
Bank, N.A. LOC) 7,000,000
----------------------------------------------------------------
3,300,000 Halifax Hospital Medical Center, FL, Daytona Beach, FL (Series
1997), 4.125% TANs (Barnett Bank, N.A. LOC), 4/15/1998 3,303,765
----------------------------------------------------------------
7,000,000 Highlands County, FL Health Facilities, (Series 1996A Accounts
Receivable) Weekly VRDNs (Adventist Health System)/(Capital
Markets Assurance Corp. INS)/(First National Bank of Chicago
LIQ) 7,000,000
----------------------------------------------------------------
5,000,000 Highlands County, FL Health Facilities, (Series 1996B Accounts
Receivable) Weekly VRDNs (Adventist Health System)/(Capital
Markets Assurance Corp. INS)/(Canadian Imperial Bank of
Commerce, Toronto LIQ) 5,000,000
----------------------------------------------------------------
5,800,000 Hillsborough County, FL Aviation Authority, Bond Anticipation
Commercial Paper Notes, 3.50% CP (Tampa International Airport)/
(National Westminster Bank, PLC, London LOC), Mandatory Tender
5/16/1997 5,800,000
----------------------------------------------------------------
4,750,000 Hillsborough County, FL HFA, Single Family Mortgage Revenue
Bonds (Series 1997), 3.65% TOBs (AMBAC INV) 3/15/1998 4,750,000
----------------------------------------------------------------
2,000,000 Hillsborough County, FL IDA Weekly VRDNs (Ringhager Equipment
Co.)/(Mellon Bank NA, Pittsburgh LOC) 2,000,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 1,000,000 Hillsborough County, FL IDA, (Series 1988) Weekly VRDNs
(Florida Steel Corp.)/(Bankers Trust Co., New York LOC) $ 1,000,000
----------------------------------------------------------------
2,400,000 Hillsborough County, FL IDA, (Series 1992) Weekly VRDNs
(SIFCO Turbine Component Service)/(National City Bank,
Cleveland, OH LOC) 2,400,000
----------------------------------------------------------------
1,400,000 Hillsborough County, FL IDA, IDRB's (Series 1996) Weekly VRDNs
(VIGO Importing Company Project)/(Barnett Bank, N.A. LOC) 1,400,000
----------------------------------------------------------------
1,445,000 Hillsborough County, FL IDA, Variable Rate Demand IRDB's (Series
1996) Weekly VRDNs (Trident Yacht Building Partnership Project)/
(First Union National Bank of Florida LOC) 1,445,000
----------------------------------------------------------------
2,905,000 Jacksonville, FL HFDC, Health Facilities Revenue Bonds (Series
1994) Weekly VRDNs (River Garden/The Coves Project)/(First Union
National Bank, Charlotte, N.C. LOC) 2,905,000
----------------------------------------------------------------
1,900,000 Jacksonville, FL HFDC, Health Facilities Revenue Bonds (Series
1996) Weekly VRDNs (Jacksonville Faculty Practice Association
Project)/ (NationsBank, South LOC) 1,900,000
----------------------------------------------------------------
6,500,000 Jacksonville, FL IDA, IDRBs (series 1996) Weekly VRDNs
(Portion Pac, Inc.)/(Heinz (H.J.) Co. GTD) 6,500,000
----------------------------------------------------------------
1,000,000 Jacksonville, FL Weekly VRDNs (Metal Sales)/(National City Bank,
Kentucky LOC) 1,000,000
----------------------------------------------------------------
1,900,000 Jacksonville, FL, Hospital Revenue Bonds, 10.50% Bonds
(Methodist Hospital of Florida)/(United States Treasury PRF),
10/1/1997 (@102) 1,988,029
----------------------------------------------------------------
3,900,000 Lake Shore, FL Hospital Authority, Health Facilities Revenue
Bonds (Series 1991) Weekly VRDNs (Lake Shore
Hospital)/(Kredietbank N.V., Brussels LOC) 3,900,000
----------------------------------------------------------------
5,000,000 Lee County, FL HFA, Single Family Mortgage Revenue Bonds
(Series 1997A), 3.70% TOBs, Mandatory Tender 9/15/1997 5,000,000
----------------------------------------------------------------
2,680,000 Lee County, FL IDA, (Series 1985) Weekly VRDNs (Christian &
Missionary Alliance Foundation) /(Banque Paribas, Paris LOC) 2,680,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 1,000,000 Lee County, FL IDA, IDRB (Series 1994) Weekly VRDNs
(Baader North America Corporation)/(Deutsche Bank, AG LOC) $ 1,000,000
----------------------------------------------------------------
5,710,000 Manatee County, FL HFA Weekly VRDNs (Carriage Club)/
(Mellon Bank NA, Pittsburgh LOC) 5,710,000
----------------------------------------------------------------
2,285,000 Manatee County, FL HFA, Multi-Family Mortgage Revenue Refunding
Bonds (Series 1989-A) Weekly VRDNs (Hampton/ McGuire
L.P.)/(Nationsbank, N.A., Charlotte LOC) 2,285,000
----------------------------------------------------------------
3,500,000 Manatee County, FL, IDR Refunding Bonds (Series 1997) Weekly
VRDNs (CFI Manufacturing, Inc. Project)/(Barnett Bank, N.A. LOC) 3,500,000
----------------------------------------------------------------
1,000,000 Marion County, FL Health Facility Authority, Multifamily Revenue
Bonds (1985 Series F) Weekly VRDNs (Paddock Place Project)/
(SunTrust Bank, Atlanta LOC) 1,000,000
----------------------------------------------------------------
2,950,000 Marion County, FL IDA, IDRB (Series 1989) Weekly
VRDNs (Charter Springs Hospital, Inc.)/(Bankers Trust Co.,
New York LOC) 2,950,000
----------------------------------------------------------------
2,400,000 Martin County, FL IDA, Tender Industrial Revenue Bonds (Series
1986) Weekly VRDNs (Tampa Farm Service, Inc. Project)/ (SunTrust
Banks, Inc. LOC) 2,400,000
----------------------------------------------------------------
5,893,000 Orange County, FL HFA, (Series 1997A) Weekly VRDNs
(Regal Pointe Apartments Project)/(NationsBank, South LOC) 5,893,000
----------------------------------------------------------------
11,820,000 (b) Orange County, FL, Health Facilities Authority, CDC Municipal
Products Inc. (Series 96J), 3.60% TOBs (Pooled Hospital Loan
Program)/(MBIA INS)/(CDC Municipal Products, Inc. LIQ), Optional
Tender 5/30/1997 11,820,000
----------------------------------------------------------------
9,455,000 (b) Orange County, FL, Health Facilities Authority, CDC Municipal
Products, Inc. Class A Certificates (Series 1996 D-1), 3.60%
TOBs (FGIC INS)/(CDC Municipal Products, Inc. LIQ), Mandatory
Tender 5/30/1997 9,455,000
----------------------------------------------------------------
2,770,000 Palm Beach County, FL IDA Weekly VRDNs (Palm Beach Jewish
Community Campus)/(SunTrust Bank, Central Florida LOC) 2,770,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 2,300,000 Palm Beach County, FL, Revenue Bonds, (Series 1995) Weekly VRDNs
(Norton Gallery and School of Art, Inc. Project)/
(Northern Trust Co., Chicago, IL LOC) $ 2,300,000
----------------------------------------------------------------
5,500,000 Pasco County, FL School Board, Variable Rate Certificates Weekly
VRDNs (AMBAC INS) 5,500,000
----------------------------------------------------------------
3,500,000 Pinellas County Industry Council, FL, IDRB (Series 1994) Weekly
VRDNs (Genca Corporation Project)/(PNC Bank, Ohio, N.A. LOC) 3,500,000
----------------------------------------------------------------
2,723,000 Pinellas County Industry Council, FL, IDRB (Series 1995) Weekly
VRDNs (ATR International Inc., Project)/(First Union National
Bank of Florida LOC) 2,723,000
----------------------------------------------------------------
3,380,000 Pinellas County, FL HFA, Single Family Mortgage Revenue Bonds
(Series 1997 B), 3.80% TOBs (Westdeutsche Landesbank
Girozentrale INV), Mandatory Tender 2/1/1998 3,380,000
----------------------------------------------------------------
3,200,000 (b) Pinellas County, FL Health Facility Authority, SFM Revenue Bonds
(Series PA-92) Weekly VRDNs (GNMA COL)/(Merrill Lynch Capital
Services, Inc. LIQ) 3,200,000
----------------------------------------------------------------
5,525,000 Polk County, FL IDA, PCR Refunding Bonds Weekly VRDNs
(IMC Fertilizer, Inc. Project)/(Rabobank Nederland, Utrecht LOC) 5,525,000
----------------------------------------------------------------
1,000,000 Polk County, FL IDA, Variable Rate Demand IDRB's (Series 1996)
Weekly VRDNs (Ytong Florida, Ltd. Project)/(First Union National
Bank of Florida LOC) 1,000,000
----------------------------------------------------------------
12,700,000 Putnam County, FL Development Authority, (Series 1984D), 3.45%
TOBs (Seminole Electric Cooperative, Inc (FL))/(National Rural
Utilities Cooperative Finance Corp. GTD), Optional Tender
6/15/1997 12,700,000
----------------------------------------------------------------
8,085,000 Putnam County, FL Development Authority, Floating/Fixed Rate
Poll Control Revenue Bonds (Pooled Series 1984 H-4), 3.55% TOBs
(Seminole Electric Cooperative, Inc (FL))/(National Rural
Utilities Cooperative Finance Corp. LOC), Optional Tender
9/15/1997 8,085,000
----------------------------------------------------------------
4,065,000 Putnam County, FL Development Authority, PCR Bonds (Pooled
Series 1984S) Weekly VRDNs (Seminole Electric Cooperative, Inc
(FL))/(National Rural Utilities Cooperative Finance Corp. LOC) 4,065,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 2,280,000 Sarasota County, FL IDRB, (Series 1994) Monthly VRDNs
(Resource Recovery Systems of Sarasota Project)/(Fleet National
Bank, Providence, R.I. LOC), 6/1/1997 $ 2,280,000
----------------------------------------------------------------
3,000,000 Sarasota County, FL Public Hospital District, Series 1993A,
3.65% CP (Sarasota Memorial Hospital), Mandatory Tender
5/16/1997 3,000,000
----------------------------------------------------------------
13,000,000 Sarasota County, FL Public Hospital District, Variable Rate
Demand Hospital Revenue Bonds (Series 1996A), 3.65% CP (Sarasota
Memorial Hospital)/(SunTrust Bank, Central Florida LIQ),
Mandatory Tender 5/22/1997 13,000,000
----------------------------------------------------------------
3,500,000 Sarasota County, FL Public Hospital District, Variable Rate
Demand Hospital Revenue Bonds (Series 1996A), 3.80% CP (Sarasota
Memorial Hospital)/(SunTrust Bank, Central Florida LIQ),
Mandatory Tender 8/21/1997 3,500,000
----------------------------------------------------------------
4,115,000 Sarasota, FL, Educational Facilities Revenue Bonds (Series 1996)
Weekly VRDNs (Ringling School of Art and Design, Inc.)/
(SunTrust Bank, Central Florida LOC) 4,115,000
----------------------------------------------------------------
4,400,000 Seminole County, FL Health Facility Authority IDA,
(Series 1991) Weekly VRDNs (Florida Living Nursing Center)/
(Barnett Bank, N.A. LOC) 4,400,000
----------------------------------------------------------------
7,595,000 St. Lucie County, FL, IDR Bonds (Series 1985) Weekly VRDNs
(Savannahs Hospital)/(NationsBank, South LOC) 7,595,000
----------------------------------------------------------------
1,300,000 Sumter County, FL IDA Weekly VRDNs (Great Southern Wood of
Florida)/(SouthTrust Bank of Alabama, Birmingham LOC) 1,300,000
----------------------------------------------------------------
4,500,000 Suwannee County, FL, Health Facilities Revenue Bonds (Series
1996) Weekly VRDNs (Shands Teaching Hospital and Clinics, Inc.)/
(MBIA INS)/(SunTrust Bank, Central Florida LIQ) 4,500,000
----------------------------------------------------------------
13,500,000 (b) TEB Municipal Trust I, Class A Floating Rate Receipts Weekly
VRDNs (Uniforet Inc.)/(Bank One, Columbus, N.A. LOC) 13,500,000
----------------------------------------------------------------
3,300,000 Tamarac, FL, IDRB (Series 1995) Weekly VRDNs (Arch Aluminum &
Glass Co., Inc. Project)/(Mellon Bank NA, Pittsburgh LOC) 3,300,000
----------------------------------------------------------------
6,000,000 Titusville, FL, Multi-Purpose Revenue Bonds, Installment 1995A
Weekly VRDNs (Banque Paribas, Paris LOC) 6,000,000
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
FLORIDA--CONTINUED
----------------------------------------------------------------
$ 2,060,000 Volusia County, FL Health Facilities Authority, (Series 1994A)
Monthly VRDNs (Southwest Volusia Healthcare Corp.)/
(First Union National Bank, Charlotte, N.C. LOC) $ 2,060,000
----------------------------------------------------------------
1,575,000 Volusia County, FL IDA Weekly VRDNs (Crane Cams)/
(Wells Fargo Bank, Arizona LOC) 1,575,000
----------------------------------------------------------------
2,800,000 Wakulla County, FL IDA Weekly VRDNs (Winco Utilities, Inc.
Project)/(Barnett Bank, N.A. LOC) 2,800,000
---------------------------------------------------------------- ------------
Total 366,887,152
---------------------------------------------------------------- ------------
ALABAMA--3.5%
----------------------------------------------------------------
2,400,000 Alabama State IDA, Revenue Bonds Weekly VRDNs (Southern Bag
Corporation, Ltd.)/(SouthTrust Bank of Alabama, Birmingham LOC) 2,400,000
----------------------------------------------------------------
1,570,000 Geneva County, AL IDB, Adjustable Fixed Rate IDRB's
(Series 1996) Weekly VRDNs (Brooks AG Co., Inc.)/(Regions Bank,
Alabama LOC) 1,570,000
----------------------------------------------------------------
7,075,000 St. Clair County, AL IDB, (Series 1993) Weekly VRDNs (Ebsco
Industries, Inc.)/(National Australia Bank, Ltd., Melbourne LOC) 7,075,000
----------------------------------------------------------------
5,000,000 Sumter County, AL IDA, Industrial Revenue Bonds (Series 1995A)
Weekly VRDNs (Fulghum Fibres Project (AL)/(Regions Bank, Alabama
LOC) 5,000,000
----------------------------------------------------------------
2,200,000 Tuscaloosa County, AL IDA, 1995 Series A Weekly VRDNs
(Tuscaloosa Steel Corporation)/(Bayerische Landesbank
Girozentrale LOC) 2,200,000
---------------------------------------------------------------- ------------
Total 18,245,000
---------------------------------------------------------------- ------------
COLORADO--0.6%
----------------------------------------------------------------
3,000,000 Denver (City & County), CO, Airport System Subordinate Revenue
Bonds (Series 1990E), 3.60% CP (Sanwa Bank Ltd, Osaka LOC),
Mandatory Tender 5/22/1997 3,000,000
---------------------------------------------------------------- ------------
GEORGIA--1.3%
----------------------------------------------------------------
4,995,000 Bartow County School District, GA, (Series 1997), 4.00% TANs,
12/31/1997 5,004,669
----------------------------------------------------------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
GEORGIA--CONTINUED
----------------------------------------------------------------
$ 1,500,000 Savannah, GA EDA, (Series 1995A) Weekly VRDNs
(Home Depot, Inc.) $ 1,500,000
---------------------------------------------------------------- ------------
Total 6,504,669
---------------------------------------------------------------- ------------
INDIANA--0.4%
----------------------------------------------------------------
2,330,000 Penn Harris Madison, IN ISD, Temporary Loan Time Warrants, 4.10%
TANs, 12/31/1997 2,336,045
---------------------------------------------------------------- ------------
MARYLAND--2.5%
----------------------------------------------------------------
3,500,000 Anne Arundel County, MD, Economic Development Revenue Bonds
(Series 1996) Weekly VRDNs (Atlas Container Corporation
Project)/ (Mellon Bank NA, Pittsburgh LOC) 3,500,000
----------------------------------------------------------------
1,375,000 Baltimore County, MD IDA, (Series 1994A) Weekly VRDNs (Pitts
Realty Limited Partnership)/(PNC Bank, NA, Delaware LOC) 1,375,000
----------------------------------------------------------------
1,000,000 Baltimore County, MD, Revenue Bonds (1994 Issue) Weekly VRDNs
(Direct Marketing Associates, Inc. Facility)/(First National
Bank of Maryland, Baltimore LOC) 1,000,000
----------------------------------------------------------------
2,185,000 Maryland State Community Development Administration, (Series
1990A) Weekly VRDNs (College Estates)/(First National Bank of
Maryland, Baltimore LOC) 2,185,000
----------------------------------------------------------------
1,500,000 Maryland State Energy Financing Administration, IDRB (Series
1988) Weekly VRDNs (Morningstar Foods, Inc.)/(Nationsbank of
Texas, N.A. LOC) 1,500,000
----------------------------------------------------------------
1,000,000 Maryland State Energy Financing Administration, Limited
Obligation Variable Rate Demand Revenue Bonds (Series 1996)
Weekly VRDNs (Keywell L.L.C.)/(Bank of America Illinois LOC) 1,000,000
----------------------------------------------------------------
1,800,000 Maryland State IDFA, Economic Development Revenue Refunding
Bonds (Series 1994) Weekly VRDNs (Johnson Controls, Inc.) 1,800,000
----------------------------------------------------------------
500,000 Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs
(Field Container Co. L.P.)/(Northern Trust Co., Chicago, IL LOC) 500,000
---------------------------------------------------------------- ------------
Total 12,860,000
---------------------------------------------------------------- ------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
MICHIGAN--2.9%
----------------------------------------------------------------
$ 925,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds
(Series 1995) Weekly VRDNs (Rowe Thomas Company Project)/
(Comerica Bank, Detroit, MI LOC) $ 925,000
----------------------------------------------------------------
860,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds
(Series 1995) Weekly VRDNs (Bear Lake Associates Project)/
(Old Kent Bank & Trust Co., Grand Rapids LOC) 860,000
----------------------------------------------------------------
7,500,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds
(Series 1995) Weekly VRDNs (United Waste Systems, Inc.)/
(Bank of America Illinois LOC) 7,500,000
----------------------------------------------------------------
1,900,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds
(Series 1996) Weekly VRDNs (AVL North America, Inc. Project)/
(NBD Bank, Michigan LOC) 1,900,000
----------------------------------------------------------------
1,790,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds
Weekly VRDNs (Hess Industries, Inc.)/(Norwest Bank Minnesota,
Minneapolis LOC) 1,790,000
----------------------------------------------------------------
2,200,000 Wayne County, MI , Airport Revenue Refunding Bonds (Series
1996A) Weekly VRDNs (Detroit Metropolitan Wayne County
Airport)/(Bayerische Landesbank Girozentrale LOC) 2,200,000
---------------------------------------------------------------- ------------
Total 15,175,000
---------------------------------------------------------------- ------------
MINNESOTA--2.1%
----------------------------------------------------------------
2,955,000 Byron, MN IDB Weekly VRDNs (Schmidt Printing)/(Norwest Bank
Minnesota, Minneapolis LOC) 2,955,000
----------------------------------------------------------------
6,000,000 Lino Lakes, MN, Variable Rate Demand IDRB's (Series 1997)
Weekly VRDNs (Taylor Corp.)/(Norwest Bank Minnesota,
Minneapolis LOC) 6,000,000
----------------------------------------------------------------
2,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs
(Mayo Foundation) 2,000,000
---------------------------------------------------------------- ------------
Total 10,955,000
---------------------------------------------------------------- ------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
NEW YORK--0.6%
----------------------------------------------------------------
$ 3,200,000 (b) VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York City
Municipal Water Finance Authority)/(MBIA INS)/(Hong Kong &
Shanghai Banking Corp. LIQ) $ 3,200,000
---------------------------------------------------------------- ------------
NORTH CAROLINA--1.0%
----------------------------------------------------------------
5,284,100 Duplin County, NC Water District, (Series F), 3.635% BANs,
8/6/1997 5,285,950
---------------------------------------------------------------- ------------
NORTH DAKOTA--0.2%
----------------------------------------------------------------
1,000,000 Fargo, ND, Variable Rate Demand IDRB's (Series 1997) Weekly
VRDNs (Owen Industries, Inc.)/(Mellon Bank NA, Pittsburgh LOC) 1,000,000
---------------------------------------------------------------- ------------
OHIO--7.6%
----------------------------------------------------------------
6,500,000 Dayton, OH, Airport Improvement (Series 1996), 3.80% BANs,
12/16/1997 6,506,323
----------------------------------------------------------------
8,000,000 Lorain Port Authority, OH, IDRB (Series 1996) Weekly VRDNs
(Brush Wellman, Inc.)/(National City Bank, Cleveland, OH LOC) 8,000,000
----------------------------------------------------------------
15,000,000 Ohio HFA, (Series 1997 A-1), 3.55% TOBs, Mandatory Tender
9/1/1997 15,000,000
----------------------------------------------------------------
3,000,000 Ohio State Public Facilities Commission, 4.25% Higher Ed Capital
Facilities Revenue Bonds, (AMBAC INS), 12/1/1997 3,007,550
----------------------------------------------------------------
3,000,000 Ohio State Water Development Authority, Ohio PCR Bonds (Series
1989) Weekly VRDNs (Duquesne Light Power Co.)/ (Barclays Bank
PLC, London LOC) 3,000,000
----------------------------------------------------------------
4,000,000 Toledo-Lucas County, OH Port Authority, Airport Development
Revenue Bonds (Series 1996-1) Weekly VRDNs (Burlington Air
Express, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) 4,000,000
---------------------------------------------------------------- ------------
Total 39,513,873
---------------------------------------------------------------- ------------
RHODE ISLAND--0.9%
----------------------------------------------------------------
4,900,000 Rhode Island Housing & Mortgage Finance Corp., Homeownership
Opportunity Bonds (Series 22-B), 3.70% TOBs, Mandatory Tender
12/1/1997 4,900,000
---------------------------------------------------------------- ------------
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
TENNESSEE--0.3%
----------------------------------------------------------------
$ 1,550,000 Chattanooga, TN IDB, Revenue Bonds (Series 1997) Weekly VRDNs
(TB Wood's Inc. Project)/(PNC Bank, N.A. LOC) $ 1,550,000
---------------------------------------------------------------- ------------
TEXAS--3.3%
----------------------------------------------------------------
2,100,000 Angelina and Neches River Authority, Texas, Solid Waste Disposal
Revenue Bonds (Series 1993), 3.85% CP (Temple-Eastex Inc.
Project)/(Temple-Inland, Inc. GTD), Mandatory Tender 6/13/1997 2,100,000
----------------------------------------------------------------
15,000,000 Harris County, TX HFDC, (Series 1993), 3.75% CP (Sisters of
Charity of The Incarnate Word)/(Credit Suisse, Zurich LIQ),
Mandatory Tender 6/30/1997 15,000,000
---------------------------------------------------------------- ------------
Total 17,100,000
---------------------------------------------------------------- ------------
VIRGINIA--1.7%
----------------------------------------------------------------
8,800,000 Alexandria, VA Redevelopment and Housing Authority Weekly VRDNs
(Crystal City Apartments)/(Safeco Insurance Co. of America
INS)/(Barclays Bank PLC, London LIQ) 8,800,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $517,312,689
---------------------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent
49.2% of the portfolio as calculated based upon total portfolio
market value.
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
(a) The Fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSRO's") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc. or F-1+, F-1 and F-2 by Fitch Investors
Service, Inc. are considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSRO's in different rating
categories should be identified as a First or Second Tier
security. At April 30, 1997, the portfolio securities were rated
as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
------------- --------------
<S> <C>
99.59% .41%
</TABLE>
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $66,785,000 which represents 12.8% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($519,808,343) at April 30, 1997.
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance
Corporation
BANs -- Bond Anticipation Notes
COL -- Collateralized
CP -- Commercial Paper
EDRB -- Economic Development Revenue
Bonds
EDA -- Economic Development Authority
FGIC -- Financial Guaranty Insurance
Company
GNMA -- Government National Mortgage
Association
GTD -- Guaranty
HFA -- Housing Finance Authority
HFDC -- Health Facility Development
Corporation
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDR -- Industrial Development Revenue
IDRB -- Industrial Development Revenue
Bond
IDFA -- Industrial Development Finance
Authority
INS -- Insured INV -- Investment Agreement ISD -- Independent School
District LIQ -- Liquidity Agreement LOC -- Letter of Credit MBIA --
Municipal Bond Investors
Assurance 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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $517,312,689
- -------------------------------------------------------------------------------
Income receivable 4,009,231
- -------------------------------------------------------------------------------
Deferred expenses 15,764
- ------------------------------------------------------------------------------- ------------
Total assets 521,337,684
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Income distribution payable $986,867
- --------------------------------------------------------------------
Payable to bank 408,565
- --------------------------------------------------------------------
Accrued expenses 133,909
- -------------------------------------------------------------------- --------
Total liabilities 1,529,341
- ------------------------------------------------------------------------------- ------------
NET ASSETS FOR 519,808,343 shares outstanding $519,808,343
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- -------------------------------------------------------------------------------
$429,906,924 / 429,906,924 shares outstanding $1.00
- ------------------------------------------------------------------------------- ------------
CASH II SHARES:
- -------------------------------------------------------------------------------
$89,901,419 / 89,901,419 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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $11,071,599
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 1,244,521
- --------------------------------------------------------------------
Administrative personnel and services fee 234,927
- --------------------------------------------------------------------
Custodian fees 44,398
- --------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 36,852
- --------------------------------------------------------------------
Directors'/Trustees' fees 2,408
- --------------------------------------------------------------------
Auditing fees 6,561
- --------------------------------------------------------------------
Legal fees 6,428
- --------------------------------------------------------------------
Portfolio accounting fees 67,398
- --------------------------------------------------------------------
Distribution services fee-Cash II Shares 130,847
- --------------------------------------------------------------------
Shareholder services fee-Institutional Shares 646,979
- --------------------------------------------------------------------
Shareholder services fee-Cash II Shares 130,847
- --------------------------------------------------------------------
Share registration costs 15,817
- --------------------------------------------------------------------
Printing and postage 14,689
- --------------------------------------------------------------------
Insurance premiums 3,067
- --------------------------------------------------------------------
Miscellaneous 3,009
- -------------------------------------------------------------------- -----------
Total expenses 2,588,748
- --------------------------------------------------------------------
Waivers--
- --------------------------------------------------------------------
Waiver of investment advisory fee $(685,786)
- --------------------------------------------------------
Waiver of distribution services fee-Cash II Shares (26,597)
- --------------------------------------------------------
Waiver of shareholder services fee-Institutional
Shares (155,275)
- -------------------------------------------------------- ---------
Total waivers (867,658)
- -------------------------------------------------------------------- -----------
Net expenses 1,721,090
- ----------------------------------------------------------------------------------- -----------
Net investment income $ 9,350,509
- ----------------------------------------------------------------------------------- -----------
</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, 1997 OCTOBER 31, 1996
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 9,350,509 $ 12,310,459
- ------------------------------------------------------ --------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income:
- ------------------------------------------------------
Institutional Shares (7,882,884) (10,917,907)
- ------------------------------------------------------
Cash II Shares (1,467,625) (1,392,552)
- ------------------------------------------------------ --------------- -----------------
Change in net assets resulting from distributions
to shareholders (9,350,509) (12,310,459)
- ------------------------------------------------------ --------------- -----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 1,231,978,240 2,270,320,962
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 5,689,529 6,801,443
- ------------------------------------------------------
Cost of shares redeemed (1,250,676,071) (1,897,652,278)
- ------------------------------------------------------ --------------- -----------------
Change in net assets resulting from share
transactions (13,008,302) 379,470,127
- ------------------------------------------------------ --------------- -----------------
Change in net assets (13,008,302) 379,470,127
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 532,816,645 153,346,518
- ------------------------------------------------------ --------------- -----------------
End of period $ 519,808,343 $ 532,816,645
- ------------------------------------------------------ --------------- -----------------
</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 OCTOBER 31,
APRIL 30, ---------------------------------
1997 1996 1995 1994(A)
----------- -------- -------- ---------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.000
- -----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------
Net investment income 0.02 0.03 0.04 0.004
- -----------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------
Distributions from net investment income (0.02) (0.03) (0.04) (0.004)
- ----------------------------------------------- ------ ----- ----- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.000
- ----------------------------------------------- ------ ----- ----- ---------
TOTAL RETURN(B) 1.52% 3.20% 3.60% 0.35%
- -----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------
Expenses 0.51%* 0.49% 0.45% 0.28% *
- -----------------------------------------------
Net investment income 3.05%* 3.17% 3.58% 3.28% *
- -----------------------------------------------
Expense waiver/reimbursement(c) 0.28%* 0.34% 0.42% 1.03% *
- -----------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------
Net assets, end of period (000 omitted) $ 429,907 $500,993 $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 EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) PERIOD ENDED
APRIL 30, 1997 OCTOBER 31, 1996(A)
--------------- ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
- ------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------
Net investment income 0.01 0.03
- ------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------
Distributions from net investment income (0.01) (0.03)
- ------------------------------------------------------ ---------- -------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
- ------------------------------------------------------ ---------- -------------
TOTAL RETURN(B) 1.39% 2.80%
- ------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------
Expenses 0.77%* 0.65%*
- ------------------------------------------------------
Net investment income 2.80%* 3.07%*
- ------------------------------------------------------
Expense waiver/reimbursement(c) 0.27%* 0.43%*
- ------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------
Net assets, end of period (000 omitted) $89,901 $31,824
- ------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from November 27, 1995 (date of
initial public investment) to October 31, 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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Federated Municipal Cash 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 sixteen
portfolios. The financial statements included herein are only those of
Florida Municipal Cash Trust (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. 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 over a period not to exceed five years
from the Fund's commencement date.
RESTRICTED SECURITIES--Restricted securities are securities that
may only be resold upon registration under federal securities
laws or in transactions exempt from such registration. Many
restricted
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted
securities may be resold without registration upon exercise of a
demand feature. Such restricted securities may be determined to
be liquid under criteria established by the Board of Trustees
(the "Trustees"). The Fund will not incur any registration costs
upon such resales. Restricted securities are valued at amortized
cost in accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at April
30, 1997 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
--------------------------------------------------- ---------------------- ------------
<S> <C> <C>
Clipper Florida Tax-Exempt Trust, Class A,
Certificates of Participation, Series 1996-3B 6/14/1996-6/19/1996 $14,190,000
Escambia County, FL HFA, P-Floats PA-129 Weekly
VRDNs 12/3/1996 $ 2,000,000
Florida HFA, Homeowner Mortgage, Revenue Bonds
PT-88 (Series 1996-3) 9/27/1996 $ 6,920,000
Florida State Department of Transportation, (Series
1996-3) 7/23/1996 $ 2,500,000
Orange County, FL, Health Facilities Authority, CDC
Municipal Products Inc. (Series 96J) 12/12/96 $11,820,000
Orange County, FL, Health Facilities Authority, CDC
Municipal Products, Inc. Class A Certificates
(Series 1996 D-1) 3/4/97 $ 9,455,000
Pinellas County, FL Health Facility Authority, SFM
Revenue Bonds (Series PA-92) 3/3/1995 $ 3,200,000
TEB Municipal Trust I, Class A Floating Rate
Receipts 8/27/1996 $13,500,000
VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New
York City Municipal Water Finance Authority) 2/11/97 $ 3,200,000
</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.
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, 1997, capital
paid-in aggregated $519,808,343.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SHARES APRIL 30, 1997 1996
- ---------------------------------------------------------- -------------- ---------------
<S> <C> <C>
Shares sold 974,031,054 1,967,231,853
- ----------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 5,688,552 6,801,419
- ----------------------------------------------------------
Shares redeemed (1,050,805,587) (1,626,386,885)
- ---------------------------------------------------------- -------------- ---------------
Net change resulting from Institutional Share
transactions (71,085,981) 347,646,387
- ---------------------------------------------------------- -------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
CASH II SHARES APRIL 30, 1997 1996
- ---------------------------------------------------------- -------------- ---------------
<S> <C> <C>
Shares sold 257,947,186 303,089,109
- ----------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 977 24
- ----------------------------------------------------------
Shares redeemed (199,870,484) (271,265,393)
- ---------------------------------------------------------- -------------- ---------------
Net change resulting from Cash II Share transactions 58,077,679 31,823,740
- ---------------------------------------------------------- -------------- ---------------
Net change resulting from Share transactions (13,008,302) 379,470,127
- ---------------------------------------------------------- -------------- ---------------
</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. 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
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 Shares and Cash II Shares. The Plan
provides that the Fund may incur distribution expenses according
to the following schedule annually, to compensate FSC.
<TABLE>
<CAPTION>
PERCENTAGE OF AVERAGE
SHARE CLASS NAME DAILY NET ASSETS OF CLASS
------------------------ ----------------------------
<S> <C>
Institutional 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.
For the period ending April 30, 1997, 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 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the
level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
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,
1997, the Fund paid $1,580 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1997,
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
$961,380,000 and $1,040,310,000, respectively.
FLORIDA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
GENERAL--Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 72.0% of the
securities in the portfolio of investments are backed by letters of
credit or bond insurance of various financial institutions and
financial guaranty assurance agencies. The percentage of investments
insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 4.4% of total investments.
<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,
John E. Murray, Jr. Treasurer, and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
S. Elliott Cohan
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, 1996, through April
30, 1997. 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
double- or 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. At the end of the reporting period, the fund's
holdings were diversified among issuers that use municipal bond
financing for projects as varied as health care, housing, community
development, and transportation.
This double- or triple-tax-free advantage means 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 reporting period, the fund paid tax-free dividends totaling
$0.02 per share for Institutional Service Shares and $0.01 per share
for Cash II Shares. The fund's total net assets stood at $429.5
million at the end of the reporting period.
Thank you for relying on New York Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected
demand, voted to raise the federal funds target rate from 5.25% to
5.50%. The move was viewed as being pre-emptive against the threat
of future inflationary pressures possibly brought about by tight
labor market conditions. Until that point, movements in interest
rates reflected shifting market sentiment about the need for the Fed
to move to a more restrictive policy. As the reporting period began
in November 1996, the economy had been showing signs of slowing,
thereby allaying the market's fears about inflation. Then, in
December, the market's uneasiness was once more ignited as a string
of economic statistics showed stronger growth and Fed Chairman Alan
Greenspan made cautionary statements regarding inflation and
"irrational exuberance" in the equity market. With inflation still
appearing to be benign, the market tolerated a steady pace of growth
into early 1997. However, Chairman Greenspan's Humphrey-Hawkins
testimony before Congress in late February marked a turning point
for the short-term money markets -- indeed the bond and equity
markets as well -- as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal
in interest rate movement and the market's perception about future
Fed policy. The ensuing weeks brought continued evidence of
persistent strength, and culminated in the Fed's action at the
Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February,
and by the time of the Fed tightening in late March, had built in
much of the expectations regarding the Fed decision. In April, the
financial markets continued to focus on the likelihood of an
additional tightening move later in May, causing short-term yields
to rise even further. Yields on the six-month Treasury bill rose
sharply over this interim period, moving from a low of 5.20% in
mid-February to a high of 5.68% in late April before falling back to
5.53% by the end of reporting period.
Q
What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 51 days. As signs of strength in the economy
became more apparent, and as expectation of an imminent Fed
tightening grew in the first quarter of 1997, we lowered the average
maturity target range of the fund from between 50 and 55 days to
between 40 and 45 days. We also emphasized the purchase of shorter
term fixed-rate paper while increasing the percentage of the
portfolio in seven-day variable rate demand notes ("VRDNs").
Seven-day VRDNs provide more portfolio responsiveness to interest
rate increases.
Once an average maturity range is targeted, the portfolio attempts
to maximize performance through ongoing relative value analysis.
Relative value analysis includes the comparison of the richness or
cheapness of municipal securities to one another as well as
municipals to taxable instruments, such as Treasury securities. The
fund's portfolio remained barbelled in structure, which combined a
significant portion in seven-day variable rate demand notes and
short maturity commercial paper with purchases of longer-term, six-
to twelve-month fixed rate notes. This portfolio structure continues
to pursue a competitive yield over time.
Q
How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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
increased during the reporting period. For the fund, the seven-day
net yield of the Institutional Service Shares on April 30, 1997 was
3.88%, compared to 3.18% at the beginning of the reporting period.*
For the Cash II Shares, the seven-day net yield was 3.70%, at the
end of the reporting period compared to 3.00% six months ago.*
Q
Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move
by the Fed should help to preclude the need for more aggressive
action down the road by preventing the build-up of inflationary
pressures. We would look to see moderately higher short-term
interest rates throughout the course of the year, but not to the
extent evidenced in the last tightening cycle in 1994. As such, we
will likely continue in our modestly defensive stance for the
portfolio until market conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
NEW YORK MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- 99.4%
NEW YORK -- 99.4%
$ 9,195,000 (b)Albany County Airport Authority, NY, Trust Receipts (Series 1997)
Weekly VRDNs (FSA INS)/(Bank of New York, New York LIQ) $ 9,195,000
945,000 Albany, NY IDA, 3.95% TOBs (146 State Street)/(Fleet Bank of
New York LOC), Optional Tender 12/1/1997 945,000
2,480,000 Alden Central School District, NY, UT GO, 4.25% BANs, 6/24/1997 2,481,251
900,000 Babylon, NY IDA, (1994 Series) Weekly VRDNs (J. D'Addario &
Company, Inc. Project)/(National Westminster Bank, PLC,
London LOC) 900,000
2,000,000 Brockport Village, NY, 4.125% BANs, 2/27/1998 2,005,494
3,800,000 Brookhaven-Comsewogue Union Free School District, NY,
4.00% TANs, 6/30/1997 3,801,217
4,000,000 Canisteo Central School District, NY, 4.00% BANs, 1/2/1998 4,006,731
1,500,000 Cattaraugus County, NY IDA, (Series 1996A) Weekly VRDNs
(Gier's Farm Service, Inc. Project)/(Key Bank of New York LOC) 1,500,000
2,550,000 Chautauqua County, NY IDA Weekly VRDNs (Cliffstar Corp.)/
(KeyBank, N.A. LOC) 2,550,000
3,900,000 Chautauqua County, NY IDA Weekly VRDNs (Mogen David
Wine Corp.)/(Wells Fargo Bank, N.A. LOC) 3,900,000
5,000,000 Chautauqua County, NY, 4.00% TANs, 12/18/1997 5,009,185
3,400,000 Clyde-Savannah Central School District, NY, 4.375% BANs,
6/27/1997 3,401,400
980,000 Colonie, NY IDA Weekly VRDNs (Herbert S. Ellis)/(Marine
Midland Bank N.A., Buffalo, NY LOC) 980,000
710,000 Colonie, NY IDA, (Series 1988) Weekly VRDNs (13 Green M-1
Drive Project)/(Marine Midland Bank N.A., Buffalo, NY LOC) 710,000
3,380,000 Colonie, NY IDA, 3.90% TOBs (800 North Pearl Associates)/
(Fleet Bank of New York LOC), Optional Tender 12/1/1997 3,380,000
4,720,000 Corinth, NY IDA, Solid Waste Disposal Revenue Bonds (Series A),
3.80% TOBs (International Paper Co.)/(International Paper Co. GTD),
Optional Tender 3/1/1998 4,720,000
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW YORK -- CONTINUED
$ 7,500,000 Deer Park Union Free School District, NY, 4.50% BANs, 10/3/1997 $ 7,517,772
1,300,000 Dutchess County, NY IDA, Series 1995 Weekly VRDNs (Laerdal
Medical Corp.)/(Bank of New York, New York LOC) 1,300,000
5,000,000 Erie County, NY IDA, IDRB (Series 1994) Weekly VRDNs
(Servotronics, Inc. Project)/(Fleet Bank of New York LOC) 5,000,000
1,800,000 Franklin County, NY IDA, (Series 1991A) Weekly VRDNs (KES
Chateaugay)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 1,800,000
2,900,000 Freeport, NY, 4.125% BANs, 11/25/1997 2,904,643
945,000 Fulton County, NY IDA, 3.95% TOBs (Gates Mills Inc.)/(Fleet Bank of
New York LOC), Optional Tender 12/1/1997 945,000
1,400,000 Guilderland, NY IDA, (Series 1993A) Weekly VRDNs (Northeastern
Industrial Park, Inc.)/(Fleet Bank of New York LOC) 1,400,000
4,420,000 Herkimer County, NY IDA, 1994 IDRB Weekly VRDNs (Granny's
Kitchen)/(Bank of New York, New York LOC) 4,420,000
2,500,000 Herkimer County, NY, 3.875% BANs, 12/12/1997 2,503,344
7,435,000 Hilton Central School District, NY, 3.90% BANs, 11/25/1997 7,444,373
1,880,000 Madison County, NY IDA, (Series 1989A) Weekly VRDNs (Madison,
NY Upstate Metals)/(Fleet Bank of New York LOC) 1,880,000
4,900,000 Madison County, NY IDA, (Series A) Weekly VRDNs (Owl Wire and
Cable)/(KeyBank, N.A. LOC) 4,900,000
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) 15,000,000
3,300,000 (b)Monroe County, NY Airport Authority, (PT-98) Weekly VRDNs
(Greater Rochester International Airport)/(MBIA INS)/(Bayerische
Hypotheken-Und Wechsel-Bank AG LIQ) 3,300,000
6,785,000 Mount Pleasant, NY Industrial Development Agency, Pollution Control
Revenue Bonds (Series 1985) Weekly VRDNs (General Motors Corp.) 6,785,000
3,600,000 New York City Housing Development Corp., (Series A) Weekly
VRDNs (East 96th Street Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 3,600,000
1,000,000 New York City Housing Development Corp., (Series A) Weekly
VRDNs (Upper Fifth Avenue)/(Bankers Trust Co., New York LOC) 1,000,000
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW YORK -- CONTINUED
$ 4,900,000 (b)New York City Housing Development Corp., Municipal Securities
Trust Receipts (Series 1996-CMC1A) Weekly VRDNs (Chase Manhattan
Corp. LIQ) $ 4,900,000
4,900,000 (b)New York City Housing Development Corp., Municipal Securities
Trust Receipts (Series 1996-CMC1B) Weekly VRDNs (Chase Manhattan
Corp. LIQ) 4,900,000
13,150,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds (Series 1995A) Daily VRDNs (FGIC INS)/
(FGIC Securities Purchase, Inc. LIQ) 13,150,000
194,445 New York City, NY IDA Weekly VRDNs (David Rosen Bakers Supply)/
(Ford Motor Credit Corp. LIQ)/(Chase Manhattan Bank N.A.,
New York LOC) 194,445
28,162,850 New York City, NY IDA, (Series 1995A) Weekly VRDNs (Brooklyn
Navy Yard Cogeneration Partners, L.P. Project)/(Bank of America NT
and SA, San Francisco LOC) 28,162,850
7,175,000 (b)New York City, NY IDA, CDC (Series 1997H) Class A Certificates
Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC Municipal
Products, Inc. LIQ) 7,175,000
3,600,000 (b)New York City, NY IDA, CDC (Series 1996H) Weekly VRDNs (Japan
Airlines Co.)/(FSA INS)/(CDC Municipal Products, Inc. LIQ) 3,600,000
9,340,000 (b)New York City, NY IDA, CDC (Series 1997E) Class A Certificates
Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC Municipal
Products, Inc. LIQ) 9,340,000
4,500,000 New York City, NY, (Series 1995 F-5) Weekly VRDNs (Landesbank
Hessen-Thueringen, Frankfurt LOC) 4,500,000
5,000,000 New York City, NY, (Series B), 4.50% RANs (Bank of Nova Scotia,
Toronto, Canadian Imperial Bank of Commerce, Toronto and
Commerzbank AG, Frankfurt LOCs), 6/30/1997 5,005,601
4,700,000 New York State Dormitory Authority, (Series 1989C), 3.40% CP
(Sloan-Kettering Memorial Cancer Center)/(Chase Manhattan Bank
N.A., New York LOC), Mandatory Tender 5/19/1997 4,700,000
5,475,000 (b)New York State Dormitory Authority, PA-60 (Series 1993) Weekly
VRDNs (Rochester General Hospital)/(FHA INS)/(Merrill Lynch
Capital Services, Inc. LIQ) 5,475,000
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW YORK -- CONTINUED
$ 8,000,000 New York State Energy Research & Development Authority, (Series
1985A), 3.60% TOBs (Long Island Lighting Co.)/(Deutsche Bank, AG
LOC), Optional Tender 3/1/1998 $ 8,000,000
3,000,000 New York State Energy Research & Development Authority, (Series
1993A) Weekly VRDNs (Long Island Lighting Co.)/(Toronto-Dominion
Bank LOC) 3,000,000
12,200,000 (b)New York State Environmental Facilities Corp., Trust Receipts (Series
1997) Weekly VRDNs (New York City Municipal Water Finance
Authority)/(Bank of New York, New York LIQ) 12,200,000
1,620,000 New York State HFA Weekly VRDNs (Special Surgery Hospital)/
(Chase Manhattan Bank N.A., New York LOC) 1,620,000
10,900,000 New York State HFA, Housing Revenue Bonds (1985 Series A) Weekly
VRDNs (Liberty View Apartments)/(Chase Manhattan Bank N.A.,
New York LOC) 10,900,000
955,000 New York State Job Development Authority Weekly VRDNs (New
York State GTD)/(Sumitomo Bank Ltd., Osaka LOC) 955,000
1,390,000 New York State Job Development Authority Weekly VRDNs (New
York State GTD)/(Sumitomo Bank Ltd., Osaka LOC) 1,390,000
1,805,000 New York State Job Development Authority, (Series C-1) Monthly
VRDNs (New York State GTD)/(Sumitomo Bank Ltd., Osaka LOC) 1,805,000
880,000 New York State Job Development Authority, (Series D-1) Monthly
VRDNs (New York State GTD)/(Sumitomo Bank Ltd., Osaka LOC) 880,000
2,025,000 New York State Job Development Authority, (Series E-1) Monthly
VRDNs (New York State GTD)/(Sumitomo Bank Ltd., Osaka LOC) 2,025,000
4,100,000 New York State Local Government Assistance Corp., (Series B) Weekly
VRDNs (Bank of Nova Scotia, Toronto LOC) 4,100,000
10,100,000 New York State Local Government Assistance Corp., (Series D) Weekly
VRDNs (Societe Generale, Paris LOC) 10,100,000
2,700,000 New York State Local Government Assistance Corp., Bonds (Series
1993A) Weekly VRDNs (Credit Suisse, Zurich and Union Bank of
Switzerland, Zurich LOCs) 2,700,000
1,100,000 New York State Medical Care Facilities Finance Agency Weekly VRDNs
(Pooled Loan Program)/(Chase Manhattan Bank N.A., New York LOC) 1,100,000
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW YORK -- CONTINUED
$ 4,560,000 (b)New York State Medical Care Facilities Finance Agency, Hospital &
Nursing Home Mortgage Revenue Bonds (1994 Series C) Weekly
VRDNs (FHA INS)/(Merrill Lynch Capital Services, Inc. LIQ) $ 4,560,000
3,700,000 (b)New York State Mortgage Agency, (Series PA-29) Weekly VRDNs
(Merrill Lynch Capital Services, Inc. LIQ) 3,700,000
4,500,000 (b)New York State Mortgage Agency, Homeowner Mortgage Revenue
Bonds (PA-87) Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 4,500,000
7,015,000 (b)New York State Mortgage Agency, Homeowner Mortgage Revenue
Bonds (Series PT-15B) Weekly VRDNs (Commerzbank AG,
Frankfurt LIQ) 7,015,000
2,390,000 (b)New York State Urban Development Corp., (PA-140) Weekly VRDNs
(AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) 2,390,000
8,400,000 (b)New York State Urban Development Corp., Municipal SecuritiesTrust
Receipts (Series 1996-CMC6) Weekly VRDNs (Chase Manhattan Corp.
LIQ) 8,400,000
3,660,000 New York State, (Series A), 4.50% Bonds, 7/15/1997 3,664,581
4,700,000 Newark Central School District, NY, 3.875% BANs, 12/5/1997 4,706,091
5,000,000 Niagara County, NY IDA Weekly VRDNs (Allegheny Ludlum Corp.)/
(PNC Bank, N.A. LOC) 5,000,000
1,000,000 North Babylon Union Free School District, NY, 4.40% TANs, 6/26/1997 1,000,864
1,400,000 Norwich, NY, 4.375% BANs, 9/19/1997 1,401,426
3,000,000 Oneida County, NY, Custodial Receipts (2nd Series 1996-D), 4.25%
BANs (State Street Bank and Trust Co. LOC), 5/9/1997 3,000,282
400,000 Onondaga County, NY IDA Weekly VRDNs (Beverage Corp.)/(Marine
Midland Bank N.A., Buffalo, NY LOC) 400,000
1,725,000 Onondaga County, NY Weekly VRDNs (Grainger (W.W.), Inc.) 1,725,000
1,912,000 Onondaga, NY, 4.00% BANs, 3/27/1998 1,913,660
1,450,000 Ontario, NY IDA Weekly VRDNs (Hillcrest Enterprises/Buckeye
Corrugated)/(National City Bank, Cleveland, OH LOC) 1,450,000
5,700,000 Oswego County, NY IDA Weekly VRDNs (Copperweld Corp.)/(Credit
Lyonnais, Paris LOC) 5,700,000
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs 15,000,000
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW YORK -- CONTINUED
$15,000,000 Port Authority of New York and New Jersey Weekly VRDNs $ 15,000,000
1,000,000 Rotterdam, NY IDA, (Series 1993A) Weekly VRDNs (Rotterdam
Industrial Park)/(Fleet Bank of New York LOC) 1,000,000
416,871 Schenectady, NY IDA Weekly VRDNs (McClellan Street Associates)/
(Ford Motor Credit Corp. LIQ)/(Chase Manhattan Bank N.A., New
York LOC) 416,871
1,640,000 Schenectady, NY IDA, IDRB (Series 1995A) Weekly VRDNs (Fortitech
Holding Corporation Project)/(Fleet Bank of New York LOC) 1,640,000
3,500,000 Sodus Central School District, NY, 4.00% BANs, 2/4/1998 3,505,137
3,000,000 South Country Central School District, NY, 4.50% TANs, 6/25/1997 3,001,953
3,040,000 Southeast, NY IDA, IDRB (Series 1995) Weekly VRDNs (Dairy
Conveyor Corporation Project)/(Chase Manhattan Bank N.A.,
New York LOC) 3,040,000
3,700,000 Southeast, NY IDA, Variable Rate IDRB 1996 Weekly VRDNs (The
Rawplug Company, Inc.)/(Bank of New York, New York LOC) 3,700,000
1,200,000 Stamford Village, NY, 4.30% BANs, 4/3/1998 1,201,589
2,100,000 Suffolk County, NY IDA Weekly VRDNs (C & J Realty Corp.)/(Ford
Motor Credit Corp. LIQ)/(Chase Manhattan Bank N.A., New York LOC) 2,100,000
750,000 Suffolk County, NY IDA Weekly VRDNs (Poly Research Corp.)/
(Marine Midland Bank N.A., Buffalo, NY LOC) 750,000
800,000 Suffolk County, NY IDA Weekly VRDNs (YM-YWHA of Suffolk)/
(European American Bank, New York LOC) 800,000
1,800,000 Suffolk County, NY IDA, 5.363% TOBs (Grainger (W.W.), Inc.), Optional
Tender 6/1/1997 1,800,000
8,300,000 (b)VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York City
Municipal Water Finance Authority)/(MBIA INS)/(Hong Kong &
Shanghai Banking Corp. LIQ) 8,300,000
7,000,000 (b)VRDC/IVRC Trust, (Series 1993B) Weekly VRDNs (Metropolitan
Transportation Authority, New York)/(AMBAC INS)/(Hong Kong &
Shanghai Banking Corp. LIQ) 7,000,000
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW YORK -- CONTINUED
$ 4,800,000 (b)VRDC/IVRC Trust, (Series 1993G) Weekly VRDNs (St. Lukes
Roosevelt Hospital Center)/(FHA INS)/(Hong Kong & Shanghai
Banking Corp. LIQ) $ 4,800,000
7,500,000 Walden Village, NY IDA, IDRB (Series 1994) Weekly VRDNs (Spence
Engineering Co.)/(First Union National Bank, Charlotte, NC LOC) 7,500,000
5,280,000 Warren & Washington Counties, NY IDA Weekly VRDNs (Sandy Hill
Corp.)/(First Union National Bank, Charlotte, NC LOC) 5,280,000
4,000,000 Westhampton Beach Union Free School District, NY, 4.00% TANs,
6/27/1997 4,001,526
1,290,000 Yates County, NY IDA, (Series 1992A) Weekly VRDNs (Clearplass
Container)/(Fleet Bank of New York LOC) 1,290,000
2,200,000 Yonkers, NY IDA, (Series 1992A) Weekly VRDNs (Consumers Union
Facility)/(Industrial Bank of Japan Ltd., Tokyo LOC) 2,200,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $426,917,286
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 37.0%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSRO's") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc. or F-1+, F-1 and F-2 by Fitch Investors
Service, Inc. are considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows application
regulations in determining whether a security is rated and whether
a security rated by multiple NRSRO's in different rating
categories should be identified as a First or Second Tier
security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
<S> <C>
93.04% 6.96%
</TABLE>
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $110,750,000 which represents 25.8% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($429,545,696) at April 30, 1997.
The following acronyms are used throughout this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation BANs -- Bond
Anticipation Notes CP -- Commercial Paper FGIC -- Financial Guaranty
Insurance Company FHA -- Federal Housing Administration FSA --
Financial Security Assurance 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 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $426,917,286
Cash 440,957
Income receivable 3,412,255
Total assets 430,770,498
LIABILITIES:
Income distribution payable $1,167,101
Accrued expenses 57,701
Total liabilities 1,224,802
NET ASSETS for 429,545,696 shares outstanding $429,545,696
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$409,015,359 / 409,015,359 shares outstanding $1.00
CASH II SHARES:
$20,530,337 / 20,530,337 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, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $7,859,668
EXPENSES:
Investment advisory fee $ 865,073
Administrative personnel and services fee 163,299
Custodian fees 16,814
Transfer and dividend disbursing agent fees and expenses 38,346
Directors'/Trustees' fees 1,686
Auditing fees 5,927
Legal fees 4,901
Portfolio accounting fees 46,914
Distribution services fee -- Institutional Service Shares 511,974
Distribution services fee -- Cash II Shares 28,632
Shareholder services fee -- Institutional Service Shares 511,974
Shareholder services fee -- Cash II Shares 28,632
Share registration costs 38,204
Printing and postage 12,297
Insurance premiums 1,310
Taxes 770
Miscellaneous 2,296
Total expenses 2,279,049
Waivers --
Waiver of investment advisory fee $ (203,002)
Waiver of distribution services fee --
Institutional Service Shares (511,974)
Waiver of distribution services fee -- Cash II Shares (28,632)
Waiver of shareholder services fee --
Institutional Service Shares (368,621)
Total waivers (1,112,229)
Net expenses 1,166,820
Net investment income $6,692,848
</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, OCTOBER 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 6,692,848 $ 10,289,169
Net realized gain (loss) on investments -- 5,609
Change in net assets resulting from operations 6,692,848 10,294,778
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Service Shares (6,360,314) (9,551,350)
Cash II Shares (332,534) (737,819)
Change in net assets resulting from distributions
to shareholders (6,692,848) (10,289,169)
SHARE TRANSACTIONS --
Proceeds from sale of shares 843,368,279 1,133,036,436
Net asset value of shares issued to shareholders in payment of
distributions declared 2,027,706 2,199,491
Cost of shares redeemed (746,954,557) (1,094,725,252)
Change in net assets resulting from share transactions 98,441,428 40,510,675
Change in net assets 98,441,428 40,516,284
NET ASSETS:
Beginning of period 331,104,268 290,587,984
End of period $429,545,696 $ 331,104,268
</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,
1997 1996 1995 1994 1993(A) 1992 1991 1990 1989 1988
<S> <C> <C> <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 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment 0.02 0.03 0.04 0.02 0.02 0.03 0.04 0.05 0.06 0.05
income
LESS DISTRIBUTIONS
Distributions
from net
investment (0.02) (0.03) (0.04) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06) (0.05)
income
NET ASSET
VALUE, END
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.54% 3.24% 3.56% 2.35% 2.16% 3.01% 4.59% 5.51% 5.70% 4.66%
RATIOS TO AVERAGE
NET ASSETS
Expenses 0.53%* 0.53% 0.54% 0.52% 0.54% 0.57% 0.52% 0.54% 0.55% 0.51%
Net investment 3.11%* 3.18% 3.49% 2.31% 2.14% 2.99% 4.48% 5.36% 5.56% 4.57%
income
Expense waiver/
reimbursement(c) 0.52%* 0.54% 0.53% 0.13% 0.17% -- -- -- -- --
SUPPLEMENTAL DATA
Net assets, end
of period (000
omitted) $409,015 $305,533 $276,149 $236,580 $274,357 $164,492 $191,616 $197,213 $245,542 $212,786
</TABLE>
* Computed on an annualized basis.
(a) Prior to November 9, 1992, the fund provided three classes of shares.
(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
FINANCIAL HIGHLIGHTS -- CASH II SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995 1994 1993(A) 1992 1991(B)
<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 0.01 0.03 0.03 0.02 0.02 0.03 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.01) (0.03) (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 $ 1.00
TOTAL RETURN(C) 1.45% 3.05% 3.37% 2.15% 1.98% 2.86% 2.20%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.71%* 0.71% 0.71% 0.71% 0.71% 0.73% 0.46%*
Net investment income 2.90%* 3.02% 3.20% 2.19% 1.96% 2.46% 4.08%*
Expense 0.34%* 0.36% 0.36% 0.21% 0.17% -- --
waiver/reimbursement(d)
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $20,530 $25,571 $14,439 $134,051 $58,884 $4,641 $56
</TABLE>
* Computed on an annualized basis.
(a) Prior to November 9, 1992, the fund provided three classes of shares.
(b) Reflects operations for the period from April 25, 1991 (date of
initial public investment) to October 31, 1991.
(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)
NEW YORK MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
New York Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund offers two classes of
shares: Institutional Service Shares and 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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may
engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains
security positions such that sufficient liquid assets will be
available to make payment for the securities purchased. Securities
purchased on a when-issued or delayed delivery basis are marked to
market daily and begin earning interest on the settlement date.
RESTRICTED SECURITIES -- Restricted securities are securities that
may only be resold upon registration under federal securities laws
or in transactions exempt from such registration. Many restricted
securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities
may be resold without registration upon exercise of a demand
feature. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees (the
"Trustees"). The Fund will not incur any registration costs upon
such resales. Restricted securities are valued at amortized cost in
accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at April
30, 1997 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Albany County Airport Authority, NY (Series 1997) 2/28/1997 $ 9,195,000
Monroe County, NY (PT-98) 2/24/1997 3,300,000
New York City Housing Development Corp.
(Series 1996-CMC1A) 9/11/1996 4,900,000
New York City Housing Development Corp.
(Series 1996-CMC1B) 9/11/1996 4,900,000
New York City, NY CDC (Series 1997H) 4/11/1997 7,175,000
New York City, NY CDC (Series 1996H) 12/12/1996 3,600,000
New York City, NY CDC (Series 1997E) 3/11/1997 9,340,000
New York State Dormitory Authority, PA-60 3/13/1995 5,475,000
New York State Environmental Facilities Corp.
(Series 1997) 2/25/1997-2/28/1997 12,200,000
New York State Medical Care Facilities
Finance Agency 8/22/1996 4,560,000
New York State Mortgage Agency (Series PA-29) 4/3/1995 3,700,000
New York State Mortgage Agency (Series PA-87) 7/5/1995 4,500,000
New York State Mortgage Agency (Series PT-15B) 12/29/1995-5/30/1996 7,015,000
New York State Urban Development Corp.
(Series PA-140) 1/29/1997 2,390,000
New York State Urban Development Corp.
(Series 1996-CMC6) 11/21/1996 8,400,000
VRDC/IVRC Trust (Series 1992A) 7/5/1995-1/31/1997 8,300,000
VRDC/IVRC Trust (Series 1993G) 3/26/1997-4/10/1997 4,800,000
VRDC/IVRC Trust (Series 1993B) 12/20/1996 7,000,000
</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) for each class of shares. At April 30, 1997, capital
paid-in aggregated $429,545,696.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR
SIX MONTHS ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES APRIL 30, 1997 1996
<S> <C> <C>
Shares sold 789,704,080 990,741,683
Shares issued to shareholders in
payment of distributions declared 1,815,159 1,624,496
Shares redeemed (688,037,308) (962,988,268)
Net change resulting from Institutional Service Share transactions 103,481,931 29,377,911
<CAPTION>
YEAR
SIX MONTHS ENDED
ENDED OCTOBER 31,
CASH II SHARES APRIL 30, 1997 1996
<S> <C> <C>
Shares sold 53,664,199 142,294,754
Shares issued to shareholders in
payment of distributions declared 212,547 574,995
Shares redeemed (58,917,249) (131,736,985)
Net change resulting from Cash II Share transactions (5,040,503) 11,132,764
Net change resulting from share transactions 98,441,428 40,510,675
</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. 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 reimburse Federated Securities
Corp., ("FSC") the principal distributor, from the net assets of
the Fund to finance activities intended to result in the sale of
the Fund's Institutional Service Shares and Cash II Shares. The
Plan provides that the Fund may incur distribution expenses up to
0.25% of the average daily net assets of the Institutional Service
Shares and Cash II Shares, annually, to reimburse FSC. The
distributor may voluntarily choose to waive any portion of its fee.
The distributor can modify or terminate this voluntary waiver at
any time at its sole discretion.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder
Services Agreement with Federated Shareholder Services ("FSS"), the
Fund will pay FSS up to 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $282,567,500 and
$326,015,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 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 percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
6.9% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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 YORK
MUNICIPAL CASH
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229733
Cusip 314229741
8060106 (6/97)
[Graphic]
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, 1996,
through April 30, 1997. 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 Institutional
Shares.
The fund is a convenient way to keep your ready cash 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. At the end of the
reporting period, the fund's holdings were diversified among issuers
that use municipal bond financing for projects as varied as health
care, housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share for both Institutional Service Shares and
Institutional Shares. The fund's net assets stood at $180.7 million at
the end of the reporting period.
Thank you for relying on California Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Mike Sirianni, Assistant
Vice President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,the
economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February, and
by the time of the Fed tightening in late March, had built in much of
the expectations regarding the Fed decision. In April, the financial
markets continued to focus on the likelihood of an additional
tightening move later in May, causing short-term yields to rise even
further. Yields on the six-month Treasury bill rose sharply over this
interim period, moving from a low of 5.20% in mid-February to a high
of 5.68% in late April before falling back to 5.53% by the end of
reporting period.
Q What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 60 days. As signs of strength in the economy became
more apparent, and as expectation of an imminent Fed tightening grew
in the first quarter of 1997, we lowered the average maturity target
range of the fund from between 55 and 60 days to between 45 and 50
days. By allowing the average maturity of the portfolio to roll inward
from 60 days to a target range of 45 to 50 days we were able to take
advantage of higher interest rates going forward.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month fixed rate
notes. This portfolio structure continues to pursue a competitive
yield over time.
Q How has the fund performed?
A The fund's average yield has remained relatively stable over the
majority of the reporting period since the Fed did not change their
federal funds rate target until the latter part of the reporting
period. The seven-day net yield for the fund's Institutional Service
Shares on April 30, 1997, was 3.57% compared to 3.17% six months ago
with the increase in yield coming at the end of the reporting period.*
The latest yield was the equivalent of a 5.91% taxable yield for
investors in the highest federal tax bracket. For the Institutional
Shares, the seven-day net yield on April 30, 1997, was 3.82% compared
to 3.42% six months ago.* The latest yield was equivalent to a 6.325%
pre-tax yield.
Q Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
CALIFORNIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- 98.9%
CALIFORNIA -- 97.8%
$ 1,015,000 California Educational Facilities Authority, (Series 1996), 3.60% Bonds
(Chapman University)/(Connie Lee INS),
10/1/1997 $ 1,015,000
1,100,000 California Health Facilities Financing Authority Weekly VRDNs
(FGIC INS)/(Morgan Guaranty Trust Co., New York
LIQ) 1,100,000
1,200,000 California PCFA, (Series 1984A) Weekly VRDNs (Homestate Mining
Company)/(Bank of Nova Scotia, Toronto
LOC) 1,200,000
4,500,000 California School Cash Reserve Program Authority, (Series B), 4.50%
TRANs (MBIA INS),
12/19/1997 4,524,842
2,600,000 California State Department of Water Resources, (Series 1), 3.45% CP
(Canadian Imperial Bank of Commerce, Toronto and Swiss Bank Corp.,
Basle LIQs), Mandatory Tender
7/21/1997 2,600,000
4,850,000 California State Public Works Board, (1997 Series A), 5.00% Bonds
(California Community Colleges),
4/1/1998 4,897,493
10,000,000 California State, (Series B) VRNs,
6/30/1997 10,000,000
5,000,000 California State, CDC Municipal Products, Inc. (Series 1996L) Weekly
VRDNs (FGIC INS)/(CDC Municipal Products, Inc.
LIQ) 5,000,000
5,000,000 California State, UT GO, 5.00% Bonds,
10/1/1997 5,028,698
4,000,000 California Statewide Communities Development Authority, (1996 Series A),
4.75% TRANs (FSA INS),
6/30/1997 4,005,001
6,000,000 Central Unified School District, CA, Certificates of Participation
(1995 Financing Project) Weekly VRDNs (Union Bank of California
LOC) 6,000,000
4,000,000 (b)Clipper CA Tax-Exempt Trust, (1996 Issue A) Weekly VRDNs (California
Rural Home Mortgage Finance Authority)/(MBIA INS)/(State Street Bank
and Trust Co.
LIQ) 4,000,000
5,200,000 Contra Costa, CA Water District, (Series A), 3.38% CP (Westdeutsche
Landesbank Girozentrale LIQ), Mandatory Tender
5/28/1997 5,200,000
2,395,000 Folsom Cordova Unified School District, CA, 4.50% TRANs,
10/16/1997 2,402,898
7,100,000 Glendale, CA, (Series 1984A) Monthly VRDNs (Reliance Development
Company, Inc.)/(Barclays Bank PLC, London
LOC) 7,100,000
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CALIFORNIA -- CONTINUED
$ 4,000,000 Huntington Beach, CA, Multifamily Housing Revenue Refunding Bonds
(1996 Series A) Weekly VRDNs (Huntington Breakers Apartments)/
(Sumitomo Bank Ltd., Osaka
LOC) $ 4,000,000
5,000,000 Long Beach, CA Housing Authority, (1995 Series A) Weekly VRDNs
(Channel Point Apartments)/(Union Bank of California
LOC) 5,000,000
5,000,000 Los Angeles County, CA Local Educational
Agencies, (Series A), 4.75% TRANs (FSA INS),
6/30/1997 5,005,645
4,000,000 Los Angeles County, CA Metropolitan Transportation Authority, 3.35% CP
(Bayerische Vereinsbank AG, Munich, Canadian Imperial Bank of
Commerce, Toronto and National Westminster Bank, PLC, London LOCs),
Mandatory Tender
5/20/1997 4,000,000
3,900,000 Los Angeles County, CA Metropolitan Transportation Authority, 3.45% CP
(Bayerische Vereinsbank AG, Munich, Canadian Imperial Bank of
Commerce, Toronto and National Westminster Bank, PLC, London LOCs),
Mandatory Tender
5/15/1997 3,900,000
4,000,000 Los Angeles County, CA, (Series A), 4.50% TRANs (Bank of America NT
and SA, San Francisco, Credit Suisse, Zurich, Morgan Guaranty Trust Co.,
New York, Union Bank of Switzerland, Zurich and Westdeutsche
Landesbank Girozentrale LOCs),
6/30/1997 4,005,243
2,000,000 Monterey Peninsula, CA Water Management District Weekly VRDNs
(Wastewater Reclaimation)/(Sumitomo Bank Ltd., Osaka
LOC) 2,000,000
2,200,000 North County, CA Schools Financing Authority, 4.75% TRANs,
7/1/1997 2,202,116
1,200,000 Orange County, CA IDA, (Series 1985B - Niguel
Summit II) Weekly VRDNs (Hon Development
Corp.)/(Bank of America NT and SA, San Francisco
LOC) 1,200,000
1,300,000 Orange County, CA IDA, (Series 1991A) Weekly VRDNs (The Lakes)/
(Citibank N.A., New York
LOC) 1,300,000
3,000,000 Orange County, CA Local Transportation Authority, (Series 1992), 4.90%
Bonds (FGIC INS),
2/15/1998 3,026,077
10,000,000 Orange County, CA Local Transportation Authority, Sales Tax Revenue
Notes, 3.70% CP (Industrial Bank of Japan Ltd., Tokyo LOC), Mandatory
Tender
5/1/1997 10,000,000
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CALIFORNIA -- CONTINUED
$ 2,600,000 Orange County, CA Local Transportation Authority, Trust Receipts
(Series FR 1997-8) Weekly VRDNs (FGIC INS)/(Bank of New York,
New York
LIQ) $ 2,600,000
10,330,000 Oxnard Harbor District, CA, (Series 1995 II), PT-105 Weekly VRDNs
(Asset Guaranty INS)/(Credit Suisse First Boston
LIQ) 10,330,000
13,250,000 Pitney Bowes Credit Corp. Leasetops Trust, Leasetops Certificates
(Series 1996A) Weekly VRDNs (San Diego County, CA, Regional
Communications System)/(Pitney Bowes Credit Corp. LIQ)/(Landesbank
Hessen-Thueringen, Frankfurt
LOC) 13,250,000
8,000,000 Regents of University of California, (Series A),
3.45% CP (Bank of America NT and SA, San
Francisco, Bank of Montreal, Caisse Nationale De
Credit Agricole, Paris, Canadian Imperial Bank of
Commerce, Toronto and Societe Generale, Paris
LIQs), Mandatory Tender
7/25/1997 8,000,000
3,000,000 Riverside County, CA School Financing Authority, 4.625% RANs,
7/17/1997 3,003,492
900,000 Roseville, CA, Hospital Facilities Authority, (Series 1989A) Weekly
VRDNs (Toronto-Dominion Bank
LOC) 900,000
5,000,000 Sacramento County, CA HDA, Multifamily Housing Revenue Refunding
Bonds (1996 Series C) Weekly VRDNs (River Terrace Apartments)/
(Dai-Ichi Kangyo Bank Ltd., Tokyo
LOC) 5,000,000
1,700,000 San Bernardino County, CA, (Series 1985) Weekly VRDNs (Woodview
Apartments)/(Swiss Bank Corp., Basle
LOC) 1,700,000
3,400,000 San Dimas, CA Redevelopment Agency, (Series 1995) Weekly VRDNs
(Diversified Shopping Center Project)/(Morgan Guaranty Trust Co.,
New York
LOC) 3,400,000
1,500,000 San Francisco, CA Redevelopment Finance Agency, (Series B1) Weekly
VRDNs (Fillmore Center)/(Bank of Nova Scotia, Toronto
LOC) 1,500,000
5,000,000 Santa Clara County, CA, 4.50% TRANs,
8/1/1997 5,011,094
1,400,000 Santa Clara County-El Comino Hospital District, CA, (Series 1985G)
Weekly VRDNs (Valley Medical Center)/(National Westminster Bank,
PLC, London
LOC) 1,400,000
400,000 Santa Clara, CA, (Series 1985C) Weekly VRDNs (Santa Clara, CA Electric
System)/(National Westminster Bank, PLC, London
LOC) 400,000
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
<C>
<S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CALIFORNIA -- CONTINUED
$ 1,500,000 Selma, CA, 4.50% TRANs,
6/30/1997 $ 1,500,717
2,000,000 South Coast, CA Local Education Agencies, (Series 1996A), 4.75% TRANs,
6/30/1997 2,002,145
4,000,000 Southern California Metropolitan Water District, CA, Commercial Paper
Notes (Series B), 3.45% CP (Westdeutsche Landesbank Girozentrale LIQ),
Mandatory Tender
5/19/1997 4,000,000
2,420,000 Southern California Public Power Authority, (Series PA-1005) Weekly
VRDNs (MBIA INS)/(Merrill Lynch Capital Services, Inc.
LIQ) 2,420,000
510,000 Stockton, CA, (Series 1993) Weekly VRDNs (La Quinta Inns, Inc.)/
(Nationsbank of Texas, N.A.
LOC) 510,000
Total 176,640,461
PUERTO RICO -- 1.1%
2,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (Series 1988), 3.70%
CP (Inter American University of Puerto Rico)/(Bank of Tokyo-Mitsubishi
Ltd. LOC), Mandatory Tender
7/24/1997 2,000,000
TOTAL INVESTMENTS (AT AMORTIZED
COST)(C) $ 178,640,461
</TABLE>
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
100.00% 0.00%
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, this
security represented 2.2% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($180,671,530) at April 30, 1997.
The following acronyms are used throughout this portfolio:
CP -- Commercial Paper
FGIC -- Financial Guaranty Insurance Company FSA -- Financial Security
Assurance GO -- General Obligation HDA -- Hospital Development
Authority IDA -- Industrial Development Authority INS -- Insured LIQ
- -- Liquidity Agreement LOCs -- Letter(s) of Credit LOC -- Letter of
Credit MBIA -- Municipal Bond Investors Assurance PCA -- Pollution
Control Authority PCFA -- Pollution Control Finance Authority PLC --
Public Limited Company RANs -- Revenue Anticipation Notes SA --
Support Agreement TRANs -- Tax and Revenue Anticipation Notes UT --
Unlimited Tax VRDNs -- Variable Rate Demand Notes VRNs -- Variable
Rate Notes
(See Notes which are an integral part of the Financial Statements)
CALIFORNIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $
178,640,461
Cash
848,788
Income receivable
1,818,606
Receivable for shares sold
209,665
Total assets
181,517,520
LIABILITIES:
Payable for shares redeemed $ 33,055
Income distribution payable 750,856
Accrued expenses 62,079
Total liabilities
845,990
NET ASSETS for 180,671,530 shares outstanding $
180,671,530
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$153,404,124 / 153,404,124 shares
outstanding $1.00
INSTITUTIONAL SHARES:
$27,267,406 / 27,267,406 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $
3,310,025
EXPENSES:
Investment advisory fee $ 473,329
Administrative personnel and services fee 77,113
Custodian fees 6,588
Transfer and dividend disbursing agent fees and expenses 37,336
Directors'/Trustees' fees 1,805
Auditing fees 6,140
Legal fees 2,763
Portfolio accounting fees 29,787
Shareholder services fee -- Institutional Service Shares 206,687
Shareholder services fee -- Institutional Shares 32,202
Share registration costs 15,883
Printing and postage 7,497
Insurance premiums 2,522
Miscellaneous 1,068
Total expenses 900,720
Waivers --
Waiver of investment advisory fee $ (468,334)
Waiver of shareholder services fee -- Institutional Shares (32,202)
Total waivers and reimbursements (500,536)
Net expenses
400,184
Net investment income $
2,909,841
</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,
OCTOBER 31,
1997
1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 2,909,841 $
3,198,194
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Service Shares (2,485,682)
(2,906,707)
Institutional Shares (424,159)
(291,487)
Change in net assets resulting from distributions to shareholders (2,909,841)
(3,198,194)
SHARE TRANSACTIONS --
Proceeds from sale of shares 381,715,934
477,899,575
Net asset value of shares issued to shareholders in payment
of distributions declared 1,107,617
907,904
Cost of shares redeemed (354,399,455)
(423,093,903)
Change in net assets resulting from share transactions 28,424,096
55,713,576
Change in net assets 28,424,096
55,713,576
NET ASSETS:
Beginning of period 152,247,434
96,533,858
End of period $ 180,671,530 $
152,247,434
</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 PERIOD
(UNAUDITED) YEAR ENDED ENDED
APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED
SEPTEMBER 30,
1997 1996 1995 1994(A) 1994 1993 1992
1991 1990 1989(B)
<S> <C> <C> <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 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.02 0.03 0.03 0.002 0.02 0.02 0.03
0.04 0.05 0.03
Net realized
loss
on investment -- -- (0.01) -- -- -- --
- -- -- --
Total from
investment
operations 0.02 0.03 0.02 0.002 0.02 0.02 0.03
0.04 0.05 0.03
CAPITAL CONTRIBUTIONS -- -- 0.01 -- -- -- --
- -- -- --
LESS DISTRIBUTIONS
Distributions
from net
investment
income (0.02) (0.03) (0.03) (0.002) (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 $ 1.00 $ 1.00
TOTAL RETURN(C) 1.53% 3.22% 3.37% 0.23% 2.07% 2.03% 2.83%
4.30% 5.38% 2.95%
RATIOS TO AVERAGE
NET ASSETS
Expenses 0.46%* 0.49% 0.59% 0.59%* 0.58% 0.54% 0.45%
0.35% 0.38% 0.40%*
Net investment
income 3.04%* 3.17% 3.33% 2.71%* 2.03% 2.00% 2.76%
4.19% 5.27% 5.86%*
Expense waiver/
reimbursement(d) 0.49%* 0.62% 0.50% 0.44%* 0.40% 0.35% 0.58%
0.75% 0.86% 0.89%*
SUPPLEMENTAL DATA
Net assets, end
of period (000
omitted) $153,404 $132,159 $96,534 $81,563 $74,707 $104,322 $59,709
$56,754 $50,391 $36,628
</TABLE>
* Computed on an annualized basis.
(a) For the one month ended October 31, 1994. 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 EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1997 1996(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 1.66% 2.24%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.20%*
Net investment income 3.29%* 3.33%*
Expense waiver/reimbursement(c) 0.74%* 0.90%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $27,267 $20,089
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 4, 1996 (date of
initial public investment) to October 31, 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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
California Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund offers two classes of
shares: Institutional Service Shares and 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.
RESTRICTED SECURITIES -- Restricted securities are securities that
may only be resold upon registration under federal securities laws
or in transactions exempt from such registration. Many restricted
securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities
may be resold without registration upon exercise of a demand
feature. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees (the
"Trustees"). The Fund will not incur any registration costs upon
such resales. Restricted securities are valued at amortized cost in
accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at April 30,
1997 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Clipper CA Tax-Exempt Trust
(1996 Issue A) 6/28/1996 $4,079,190
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, 1997, capital
paid-in aggregated $180,671,530.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
ENDED
APRIL 30,
OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1997
1996
<S> <C> <C>
Shares sold 335,694,185
422,168,406
Shares issued to shareholders in payment of distributions declared 1,096,321
907,892
Shares redeemed (315,545,218)
(387,451,320)
Net change resulting from Institutional Service Share transactions 21,245,288
35,624,978
<CAPTION>
SIX MONTHS
ENDED YEAR
ENDED
APRIL 30,
OCTOBER 31,
INSTITUTIONAL SHARES 1997
1996(A)
<S> <C> <C>
Shares sold 46,021,749
55,731,169
Shares issued to shareholders in payment of distributions declared
11,296 12
Shares redeemed (38,854,237)
(35,642,583)
Net change resulting from Institutional Share transactions 7,178,808
20,088,598
Net change resulting from share transactions 28,424,096
55,713,576
</TABLE>
(a) For the period from March 4, 1996 (date of initial public
investment) to October 31, 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 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $129,350,000 and
$169,600,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997,
68.7% 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
percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
7.4% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229675
Cusip 314229766
0041609 (6/97)
[Graphic]
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, 1996,
through April 30, 1997. 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. At the end of
the reporting period, the fund's holdings were diversified among
issuers that use municipal bond financing for projects as varied as
health care, housing, community development, and transportation.
This tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
of $0.01 per share. The fund's net assets stood at $35.2 million at
the end of the reporting period.
Thank you for relying on Maryland Municipal Cash Trust to help your
ready cash pursue tax-free income every day. As always, we will
continue to provide you with the highest level of professional
service. We invite your questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the "Fed")
brought about the first change in monetary policy in over a year. On
March 25, 1997, the Fed, in the face of stronger than expected demand,
voted to raise the federal funds target rate from 5.25% to 5.50%. The
move was viewed as being pre-emptive against the threat of future
inflationary pressures possibly brought about by tight labor market
conditions. Until that point, movements in interest rates reflected
shifting market sentiment about the need for the Fed to move to a more
restrictive policy. As the reporting period began in November 1996,
the economy had been showing signs of slowing, thereby allaying the
market's fears about inflation. Then, in December, the market's
uneasiness was once more ignited as a string of economic statistics
showed stronger growth and Fed Chairman Alan Greenspan made cautionary
statements regarding inflation and "irrational exuberance" in the
equity market. With inflation still appearing to be benign, the market
tolerated a steady pace of growth into early 1997. However, Chairman
Greenspan's Humphrey-Hawkins testimony before Congress in late
February marked a turning point for the short-term money markets --
indeed the bond and equity markets as well -- as his relatively
hawkish statements revealed fears at the Fed that the transitory
factors that had been keeping inflation under control in the face of
fairly robust growth may be coming to an end. This statement by the
Fed caused a sharp reversal in interest rate movement and the market's
perception about future Fed policy. The ensuing weeks brought
continued evidence of persistent strength, and culminated in the Fed's
action at the Federal Open Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February.
However, short-term interest rates began to rise in late February, and
by the time of the Fed tightening in late March, had built in much of
the expectations regarding the Fed decision. In April, the financial
markets continued to focus on the likelihood of an additional
tightening move later in May, causing short-term yields to rise even
further. Yields on the six-month Treasury bill rose sharply over this
interim period, moving from a low of 5.20% in mid-February to a high
of 5.68% in late April before falling back to 5.53% by the end of
reporting period.
Q
What were your strategies for the fund during the period?
A The fund's average maturity at the beginning of the reporting period
was approximately 63 days, reflecting a neutral outlook on the
direction of interest rates. As the signs of strength in the economy
became more apparent, and as expectation of an imminent Fed tightening
grew in the first quarter of 1997, we shortened the average maturity
target range to between 45 and 55 days. We also emphasized the
purchase of shorter term fixed-rate paper while maintaining
approximately 50-55% of the portfolio in seven-day variable rate
demand notes ("VRDNs"). Seven-day VRDNs provide more portfolio
responsiveness to interest rate increases.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month Maryland
exempt fixed rate notes and bonds. This portfolio structure takes
advantage of the steepness of the yield curve and continues to pursue
a competitive yield over time.
Q
How has the fund's yield responded to this rate environment?
A The fund's yield was affected by Fed policy (interest rate
increases), 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
increased during the reporting period. For the fund, the seven-day net
yield on April 30, 1997 was 3.50%, compared to 3.10% at the beginning
of the reporting period.* For individual investors at the highest
federal, state and local brackets, the latest yield was equivalent to
a taxable yield of 6.62%.
Q
Looking through 1997, what is your outlook for short-term rates?
A Although the Fed decided to hold short-term interest rates steady in
the March meeting, our expectations are that the Fed will find cause
to tighten monetary policy further in 1997 -- perhaps as soon as in
July. It is also anticipated that the overall tightening cycle will
not be long in terms of magnitude or duration. The pre-emptive move by
the Fed should help to preclude the need for more aggressive action
down the road by preventing the build-up of inflationary pressures. We
would look to see moderately higher short-term interest rates
throughout the course of the year, but not to the extent evidenced in
the last tightening cycle in 1994. As such, we will likely continue in
our modestly defensive stance for the portfolio until market
conditions indicate otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
MARYLAND MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- 99.1%
MARYLAND -- 95.1%
<C> <S>
<C>
$ 1,000,000 Anne Arundel County, MD, EDRB (Series 1988), 3.50% CP (Baltimore
Gas & Electric Co.), Mandatory Tender
5/21/1997 $ 1,000,000
1,000,000 Anne Arundel County, MD, EDRB (Series 1988), 3.60% CP (Baltimore
Gas & Electric Co.), Mandatory Tender
5/14/1997 1,000,000
1,000,000 Anne Arundel County, MD, EDRB (Series 1988), 3.60% CP (Baltimore
Gas & Electric Co.), Mandatory Tender
6/13/1997 1,000,000
1,475,000 Anne Arundel County, MD, Economic Development Revenue Bonds
(Series 1996) Weekly VRDNs (Atlas Container Corporation Project)/
(Mellon Bank N.A., Pittsburgh
LOC) 1,475,000
1,000,000 Baltimore County, MD IDA, (Series 1994A) Weekly VRDNs (Pitts
Realty Limited Partnership)/(PNC Bank, N.A., Delaware
LOC) 1,000,000
700,000 Baltimore County, MD Port Facility Monthly VRDNs (Occidental
Petroleum Corp.)/(Morgan Guaranty Trust Co., New York
LOC) 700,000
500,000 Baltimore County, MD, Public Improvement, 5.00% Bonds,
5/1/1997 500,000
1,400,000 Baltimore County, MD, Revenue Bonds (1994 Issue) Weekly VRDNs
(Direct Marketing Associates, Inc. Facility)/(First National Bank of
Maryland, Baltimore
LOC) 1,400,000
1,000,000 Hartford County, MD, EDRB (Series 1996) Weekly VRDNs (Citrus
and Allied Essences Ltd.)/(First National Bank of Maryland,
Baltimore
LOC) 1,000,000
3,141,000 Hartford County, MD, (Series 1989) Weekly VRDNs (Hartford
Commons Associates Facility)/(Nationsbank, N.A., Charlotte
LOC) 3,141,000
1,300,000 Howard County, MD, Consolidated Improvement Bonds (Series 1997),
4.25% Bonds,
2/15/1998 1,306,157
2,000,000 Maryland Health & Higher Educational Facilities Authority, Pooled
Loan Program Revenue Notes, 3.40% CP (John Hopkins University)/
(Sanwa Bank Ltd., Osaka LIQ), Mandatory Tender
5/20/1997 2,000,000
800,000 Maryland State Community Development Administration, (Series
1990A) Weekly VRDNs (College Estates)/(First National Bank of
Maryland, Baltimore
LOC) 800,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MARYLAND -- CONTINUED
<C> <S>
<C>
$ 2,000,000 Maryland State Community Development Administration,
Single Family Program Bonds (1996 Second Series), 4.00% TOBs,
Mandatory Tender
9/1/1997 $ 2,000,000
2,000,000 Maryland State Energy Financing Administration, Annual Tender
Solid Waste Disposal Revenue Refunding Bonds, 4.10% TOBs
(Nevamar Corp.)/(International Paper Co. GTD), Optional
Tender
9/1/1997 2,000,000
1,500,000 Maryland State Energy Financing Administration, IDRB (Series
1988) Weekly VRDNs (Morningstar Foods, Inc.)/(Nationsbank
of Texas, N.A.
LOC) 1,500,000
1,000,000 Maryland State Energy Financing Administration, Limited
Obligation Variable Rate Demand Revenue Bonds (Series 1996)
Weekly VRDNs (Keywell L.L.C.)/(Bank of America Illinois
LOC) 1,000,000
1,500,000 Maryland State IDFA, (Series 1996) Weekly VRDNs (Chesapeake
Biological Labs, Inc.)/(First Union National Bank, Charlotte,
NC
LOC) 1,500,000
1,500,000 Maryland State IDFA, Economic Development Revenue Refunding
Bonds (Series 1994) Weekly VRDNs (Johnson Controls,
Inc.) 1,500,000
1,000,000 Montgomery County, MD Housing Opportunities Commission,
(1996 Series A), 3.70% TOBs, Mandatory Tender
11/13/1997 1,000,000
1,500,000 Montgomery County, MD, EDR Weekly VRDNs (U.S.
Pharmacopeial Convention Facility)/(Chase Manhattan Bank N.A.,
New York
LOC) 1,500,000
1,000,000 Prince George's County, MD, 7.10% Bonds (United States
Treasury PRF), 9/1/1997
(@102) 1,031,590
1,100,000 Prince George's County, MD, IDRB (Series 1993), 4.10% TOBs
(International Paper Co.)/(International Paper Co. GTD), Optional
Tender
7/15/1997 1,100,000
1,500,000 University of Maryland, Series A, 6.90% Bonds,
10/1/1997 1,519,238
1,500,000 Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs (Field
Container Co. L.P.)/(Northern Trust Co., Chicago, IL
LOC) 1,500,000
Total
33,472,985
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PUERTO RICO -- 4.0%
<C> <S>
<C>
$ 1,400,000 Puerto Rico Industrial, Medical & Environmental PCA, (Series 1983A),
3.80% TOBs (Reynolds Metals Co.)/(ABN AMRO Bank N.V.,
Amsterdam LOC), Optional Tender
9/1/1997 $ 1,400,000
TOTAL INVESTMENTS (AT AMORTIZED
COST)(B) $ 34,872,985
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 64.0%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1 and F-2 by Fitch Investors
Service, Inc. Are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows application
regulations in determining whether a security is rated and whether
a security rated by multiple NRSRO's in different rating
categories should be identified as a First or Second Tier
security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
99.22% 0.78%
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($35,178,502) at April 30, 1997.
The following acronyms are used throughout this portfolio:
CP -- Commercial Paper EDR -- Economic Development Revenue EDRB --
Economic Development Revenue Bonds 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
PRF -- Prerefunded TOBs -- Tender Option Bonds VRDNs -- Variable Rate
Demand Notes
(See Notes which are an integral part of the Financial Statements)
MARYLAND MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $
34,872,985
Cash
117,628
Income receivable
265,257
Deferred expenses
21,244
Total assets
35,277,114
LIABILITIES:
Income distribution payable $ 93,809
Accrued expenses 4,803
Total liabilities
98,612
NET ASSETS for 35,178,502 shares outstanding $
35,178,502
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$35,178,502 / 35,178,502 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 888,089
EXPENSES:
Investment advisory fee $ 120,857
Administrative personnel and services fee 61,959
Custodian fees 2,976
Transfer and dividend disbursing agent fees and expenses 9,891
Directors'/Trustees' fees 754
Auditing fees 5,612
Legal fees 2,203
Portfolio accounting fees 20,604
Shareholder services fee 60,428
Share registration costs 11,071
Printing and postage 3,830
Insurance premiums 1,478
Taxes 181
Miscellaneous 6,728
Total expenses 308,572
Waivers and reimbursements --
Waiver of investment advisory fee $ (120,857)
Waiver of shareholder services fee (2,417)
Reimbursement of other operating expenses (21,919)
Total waivers and reimbursements (145,193)
Net expenses 163,379
Net investment income $ 724,710
</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 YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 724,710 $ 1,465,068
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income (724,710) (1,465,068)
SHARE TRANSACTIONS --
Proceeds from sale of shares 71,605,869 135,836,347
Net asset value of shares issued to shareholders in payment
of distributions declared 546,572 1,324,055
Cost of shares redeemed (91,259,742) (134,274,793)
Change in net assets resulting from share transactions (19,107,301) 2,885,609
Change in net assets (19,107,301) 2,885,609
NET ASSETS:
Beginning of period 54,285,803 51,400,194
End of period $ 35,178,502 $ 54,285,803
</TABLE>
(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>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1997 1996 1995
1994(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 0.01 0.03 0.03 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.01) (0.03) (0.03)
(0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.50% 3.11% 3.36%
1.30%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.68%* 0.65% 0.65%
0.46%*
Net investment income 3.00%* 3.09% 3.30%
2.68%*
Expense waiver/reimbursement(c) 0.60%* 0.65% 0.50%
0.53%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $35,179 $54,286 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Maryland Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. 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 Maryland and
Maryland municipalities 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 over a period not to exceed five years from the
Fund's commencement date.
USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimated.
OTHER -- Investment transactions are accounted for on the trade
date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue an unlimited number of full and fractional shares
of beneficial interest (without par value). At April 30, 1997, capital
paid-in aggregated $35,178,502.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER
31,
1997 1996
<S> <C> <C>
Shares sold 71,605,869
135,836,347
Shares issued to shareholders in payment of distributions declared 546,572
1,324,055
Shares redeemed (91,259,742)
(134,274,793)
Net change resulting from share transactions (19,107,301)
2,885,609
</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 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level
of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES -- Organizational and/or start-up
administrative service expenses of $45,952 were borne initially by
Adviser. The Fund has agreed to reimburse Adviser for the
organizational and/or start-up administrative expenses during the
five-year period following effective date. For the period ended
April 30, 1997, the Fund paid $5,496 pursuant to this agreement.
INTERFUND TRANSACTIONS -- During the period ended April 30, 1997,
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 $38,160,000 and
$54,015,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997,
56.2% 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
percentage of investments insured by or supported (backed) by a
letter of credit from any one institution or agency did not exceed
9.0% of total investments.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Glen R. Johnson
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
Glen R. Johnson
President
J. Christopher Donahue
Executive Vice President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
S. Elliott Cohan
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
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, 1997
[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Cusip 314229774
G01175-01 (6/97)
- --------------------------------------------------------------------------------
MICHIGAN
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
Federated Investors Logo
Cusip 314229667
Cusip 314229725
G01456-02 (6/97)
Recyled Paper Logo
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, 1996 through
April 30, 1997. 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 Institutional
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. At the end of
the reporting period, the fund's holdings were diversified among
issuers that use municipal bond financing for projects as varied as
health care, housing, community development, and transportation.
This double tax free advantage means 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 reporting period, the fund paid double tax free dividends
totaling $0.02 per share for both Institutional Service Shares and
Institutional Shares. The fund's net assets stood at $93.9 million at
the end of the reporting period.
Thank you for relying on Michigan Municipal Cash Trust to help your
ready cash pursue tax-free income every day. 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, 1997
* 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 the fund's portfolio manager, Mary Jo Ochson, CFA,
Senior Vice
President, Federated Management
Q
Can you comment on the economy and the interest rate environment
during the six-month reporting period?
A
Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the
"Fed") brought about the first change in monetary policy in over
a year. On March 25, 1997 the Fed,
in the face of stronger than expected demand, voted to raise the
federal funds target rate from 5.25% to 5.50%. The move was viewed as
being pre-emptive against the threat of future inflationary pressures
possibly brought about by tight labor market conditions. Until that
point, movements in interest rates reflected shifting market sentiment
about the need for the Fed to move to a more restrictive policy. As
the reporting period began in November 1996, the economy had been
showing signs of slowing, thereby allaying the market's fears about
inflation. Then, in December, the market's uneasiness was once more
ignited as a string of economic statistics showed stronger growth and
Fed Chairman Alan Greenspan made cautionary statements regarding
inflation and "irrational exuberance" in the equity market. With
inflation still appearing to be benign, the market tolerated a steady
pace of growth into early 1997. However, Chairman Greenspan's
Humphrey-Hawkins testimony before Congress in late February marked a
turning point for the short-term money markets--indeed the bond and
equity markets as well--as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal in
interest rate movement and the market's perception about future Fed
policy. The ensuing weeks brought continued evidence of persistent
strength, and culminated in the Fed's action at the Federal Open
Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
- --------------------------------------------------------------------------------
Q
How has the fund's yield responded to this rate environment?
A
The yield of the fund followed the upward trend of interest
rates. The seven-day net yield for the fund's Institutional
Service Shares on April 30, 1997, was 3.68% compared to 3.22% six
months ago.* The latest yield was
equivalent to a 6.09% pre-tax yield. The average tax-exempt yield over
the reporting period was 3.11%, which is comparable to a taxable yield
of 5.15% for those investors in the highest federal tax bracket.
For the Institutional Shares, the seven-day net yield on April 30,
1997 was 3.84% compared to 3.35% six months ago.* The latest yield was
the equivalent of a 6.36% taxable rate of return for investors in the
highest federal tax bracket. Over the six month reporting period the
tax-exempt yield averaged 3.25%, which is equivalent to a pre-tax
yield of 5.38% for those same investors.
Q
What was your strategy for managing the fund over the reporting
period?
A
As signs of strength in the economy became more apparent and as
expectations of an imminent Fed tightening grew in the first
quarter of 1997, we lowered the average maturity target of the
fund to between 35 and
45 days. At the end of the reporting period, we stood at an average
maturity of 43 days. By allowing the average maturity of the portfolio
to roll inward, we were able to take advantage of higher interest
rates going forward.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as Treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day variable rate demand notes and short maturity commercial
paper with purchases of longer-term, six- to twelve-month fixed rate
notes. This portfolio structure continues to pursue a competitive
yield over time.
Q
With one rate increase behind us, what is your outlook for the
remainder of 1997?
A
Although the Fed decided to hold short-term interest rates steady
in the March meeting, our expectations are that the Fed will find
cause to tighten monetary policy further in 1997--perhaps as soon
as in July. It is also
anticipated that the overall tightening cycle will not be long in
terms of magnitude or duration. The pre-emptive move by the Fed should
help to preclude the need for more aggressive action down the road by
preventing the build-up of inflationary pressures. We would look to
see moderately higher short-term interest rates throughout the course
of the year, but not to the extent evidenced in the last tightening
cycle in 1994. As such, we will likely continue in our modestly
defensive stance for the portfolio until market conditions indicate
otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
MICHIGAN MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--99.3%
- ------------------------------------------------------------------------------------
MICHIGAN--88.5%
------------------------------------------------------------------
$4,500,000 Auburn Hills, MI EDC, Limited Obligation Multi-Option Revenue
Bonds (Series 1995) Weekly VRDNs (Suburban Tool, Inc.)/
(Huntington National Bank, Columbus, OH LOC) $ 4,500,000
------------------------------------------------------------------
1,455,000 Bedford Township, MI Economic Development Corp., EDRB (Series
1985) Weekly VRDNs (Form-Tech Steel Inc.)/(KeyBank, N.A. LOC) 1,455,000
------------------------------------------------------------------
1,610,000 Berrien County, MI Economic Development Corp., Economic
Development Refunding Revenue Bonds (Series 1992), 5.45% TOBs
(Arlington Metals Corp.)/(American National Bank, Chicago LOC),
Mandatory Tender 10/1/1997 1,621,144
------------------------------------------------------------------
1,200,000 Bruce Township, MI Hospital Finance Authority, Adjustable Rate
Tender Securities (Series 1988B), 3.65% TOBs (Sisters of Charity
Health Care System)/(MBIA Corporation INS)/(Morgan Guaranty Trust
Co., New York LIQ), Optional Tender 5/1/1997 1,200,000
------------------------------------------------------------------
750,000 Dearborn, MI Economic Development Corp, (Series 1990) Weekly VRDNs
(Exhibit Productions, Inc. Project)/(First of America
Bank--Illinois LOC) 750,000
------------------------------------------------------------------
2,500,000 Fenton Area Public Schools, MI, LT GO State Aid Notes, 4.15% RANs,
5/1/1997 2,500,000
------------------------------------------------------------------
4,500,000 Garden City, MI School District, State Aid Notes, 4.70% RANs (NBD
Bank, Michigan LOC), 4/1/1998 4,527,789
------------------------------------------------------------------
1,300,000 Melvindale, MI, 4.00% TANs, 8/15/1997 1,301,328
------------------------------------------------------------------
1,000,000 Michigan Higher Education Facilities Authority, Variable Rate
Demand Limited Obligation Revenue Bonds (Series 1997) Weekly VRDNs
(Davenport College of Business)/(Old Kent Bank & Trust Co., Grand
Rapids LOC) 1,000,000
------------------------------------------------------------------
3,100,000 Michigan Job Development Authority, Limited Obligation Revenue
Bonds Weekly VRDNs (Andersons Project)/(Credit Lyonnais, Paris
LOC) 3,100,000
------------------------------------------------------------------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
MICHIGAN--CONTINUED
------------------------------------------------------------------
$6,000,000 Michigan State Building Authority, (Series 1), 3.50% CP (Canadian
Imperial Bank of Commerce, Toronto LOC), Mandatory Tender 5/1/1997 $ 6,000,000
------------------------------------------------------------------
1,000,000 Michigan State Hospital Finance Authority, Revenue Refunding Bonds
(Series P), 4.00% Bonds (Sisters of Mercy Health
Corporation)/(MBIA Corporation INS), 8/15/1997 1,000,999
------------------------------------------------------------------
4,870,000 Michigan State Housing Development Authority, Revenue Bonds
(Series A), 3.55% CP (Credit Suisse, Zurich LOC), Mandatory Tender
6/11/1997 4,870,000
------------------------------------------------------------------
1,300,000 Michigan State, 4.50% TRANs, 9/30/1997 1,305,430
------------------------------------------------------------------
2,000,000 Michigan Strategic Fund Weekly VRDNs (Tesco Engineering)/
(Bank of Tokyo-Mitsubishi Ltd. LOC) 2,000,000
------------------------------------------------------------------
4,000,000 Michigan Strategic Fund, (Series 1989) Weekly VRDNs
(Hi-Lex Controls Inc.)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 4,000,000
------------------------------------------------------------------
5,620,000 Michigan Strategic Fund, (Series 1991) Weekly VRDNs
(AGA Gas, Inc.)/(Svenska Handelsbanken, Stockholm LOC) 5,620,000
------------------------------------------------------------------
900,000 Michigan Strategic Fund, (Series 1995) Weekly VRDNs
(Rood Industries, Inc. Project)/(NBD Bank, Michigan LOC) 900,000
------------------------------------------------------------------
2,500,000 Michigan Strategic Fund, Adjustable Rate Limited Obligation
Revenue and Revenue Refunding Bonds (Series 1996) Weekly VRDNs
(C-Tec, Inc.)/(SunTrust Bank, Atlanta LOC) 2,500,000
------------------------------------------------------------------
2,000,000 Michigan Strategic Fund, Limited Obligation PCR Bonds (Series
1993) Weekly VRDNs (Allied-Signal, Inc.) 2,000,000
------------------------------------------------------------------
3,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (Bear Lake Associates Project)/
(Old Kent Bank & Trust Co., Grand Rapids LOC) 3,000,000
------------------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (Hercules Drawn Steel Corporation
Project)/(KeyBank, N.A. LOC) 1,000,000
------------------------------------------------------------------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
MICHIGAN--CONTINUED
------------------------------------------------------------------
$4,070,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (J.R. Automation Technologies Project)/ (Old
Kent Bank & Trust Co., Grand Rapids LOC) $ 4,070,000
------------------------------------------------------------------
1,020,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (RSR Project)/(Old Kent Bank & Trust Co., Grand
Rapids LOC) 1,020,000
------------------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1995) Weekly VRDNs (United Waste Systems, Inc.)/(Bank of America
Illinois LOC) 1,000,000
------------------------------------------------------------------
900,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1996) Weekly VRDNs (ACI Properties, L.L.C. Project)/
(Comerica Bank, Detroit, MI LOC) 900,000
------------------------------------------------------------------
945,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1996) Weekly VRDNs (Akemi, Inc.)/
(Comerica Bank, Detroit, MI LOC) 945,000
------------------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1996) Weekly VRDNs (Echo Properties, L.L.C. Project)/
(Comerica Bank, Detroit, MI LOC) 1,000,000
------------------------------------------------------------------
2,700,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1996) Weekly VRDNs (G & T Real Estate Investments Co.,
L.L.C.)/(NBD Bank, Michigan LOC) 2,700,000
------------------------------------------------------------------
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series
1996) Weekly VRDNs (Inalfa-Hollandia, Inc.)/
(Comerica Bank, Detroit, MI LOC) 1,000,000
------------------------------------------------------------------
4,300,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds Weekly
VRDNs (Hess Industries, Inc.)/(Norwest Bank Minnesota, Minneapolis
LOC) 4,300,000
------------------------------------------------------------------
2,125,000 Michigan Strategic Fund, Variable Rate Demand Limited Obligation
Revenue Bonds (Series 1996) Weekly VRDNs (R.H. Wyner Associates,
Inc.)/(State Street Bank and Trust Co. LOC) 2,125,000
------------------------------------------------------------------
1,000,000 Walled Lake, MI Consolidated School District, 3.65% Bonds (MBIA
Corporation INS), 5/1/1997 1,000,000
------------------------------------------------------------------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
MICHIGAN--CONTINUED
------------------------------------------------------------------
$5,000,000 Wayne County, MI Downriver Sewage Disposal System, (1994 Series
B), 3.50% CP (Wayne County, MI) /(Comerica Bank, Detroit, MI LOC),
Mandatory Tender 6/10/1997 $ 5,000,000
------------------------------------------------------------------
1,900,000 Wayne County, MI , Airport Revenue Refunding Bonds (Series 1996A)
Weekly VRDNs (Detroit Metropolitan Wayne County Airport)/
(Bayerische Landesbank Girozentrale LOC) 1,900,000
------------------------------------------------------------------ -----------
TOTAL MICHIGAN 83,111,690
------------------------------------------------------------------ -----------
PUERTO RICO--9.7%
------------------------------------------------------------------
1,000,000 Commonwealth of Puerto Rico, Public Improvement Bonds, 7.25% Bonds
(United States Treasury PRF), 7/1/1997 (@102) 1,026,046
------------------------------------------------------------------
7,000,000 Commonwealth of Puerto Rico, Series 1997A, 4.00% TRANs, 7/30/1997 7,009,660
------------------------------------------------------------------
1,075,000 Puerto Rico Industrial, Medical & Environmental PCA, Pollution
Control Facilities Financing Authority (Series 1983A), 3.75% TOBs
(Schering Plough Corp.)/(Morgan Guaranty Trust Co., New York LOC),
Optional Tender 12/1/1997 1,075,916
------------------------------------------------------------------ -----------
TOTAL PUERTO RICO 9,111,622
------------------------------------------------------------------ -----------
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
VIRGIN ISLANDS--1.1%
------------------------------------------------------------------
$1,000,000 Virgin Islands HFA, Single Family Mortgage Revenue Refunding Bonds
(1995 Series B), 3.75% TOBs (FGIC INV), Mandatory Tender 6/1/1997 $ 1,000,000
------------------------------------------------------------------ -----------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $93,223,312
------------------------------------------------------------------ -----------
</TABLE>
At April 30, 1997, 53.3% of the total investments at market value were
subject to alternative minimum tax.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30, 1997, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
------------ -------------
<S> <C>
100% 0%
</TABLE>
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($93,931,435) at April 30, 1997.
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
CP -- Commercial Paper EDC -- Economic Development Commission EDRB --
Economic Development Revenue Bonds FGIC -- Financial Guaranty
Insurance Company GO -- General Obligation HFA -- Housing Finance
Authority INS -- Insured INV -- Investment Agreement LIQ -- Liquidity
Agreement LOC -- Letter of Credit LT -- Limited Tax MBIA -- Municipal
Bond Investors Assurance PCA -- Pollution Control Authority PCR --
Pollution Control Revenue PRF -- Prerefunded RANs -- Revenue
Anticipation Notes TANs -- Tax Anticipation Notes TOBs -- Tender
Option Bonds TRANs -- Tax and Revenue Anticipation Notes VRDNs --
Variable Rate Demand Notes </TABLE>
(See Notes which are an integral part of the Financial Statements)
MICHIGAN MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $93,223,312
- --------------------------------------------------------------------------------
Cash 238,774
- --------------------------------------------------------------------------------
Income receivable 755,330
- --------------------------------------------------------------------------------
Deferred expenses 6,160
- -------------------------------------------------------------------------------- -----------
Total assets 94,223,576
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $283,379
- ---------------------------------------------------------------------
Accrued expenses 8,762
- --------------------------------------------------------------------- --------
Total liabilities 292,141
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 93,931,435 shares outstanding $93,931,435
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES:
- --------------------------------------------------------------------------------
$84,508,366 / 84,508,366 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
INSTITUTIONAL SHARES:
- --------------------------------------------------------------------------------
$9,423,069 / 9,423,069 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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $2,148,569
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 295,106
- ----------------------------------------------------------------------
Administrative personnel and services fee 75,674
- ----------------------------------------------------------------------
Custodian fees 3,502
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 39,677
- ----------------------------------------------------------------------
Directors'/Trustees' fees 1,028
- ----------------------------------------------------------------------
Auditing fees 5,859
- ----------------------------------------------------------------------
Legal fees 2,639
- ----------------------------------------------------------------------
Portfolio accounting fees 22,838
- ----------------------------------------------------------------------
Shareholder services fee-Institutional Service Shares 132,876
- ----------------------------------------------------------------------
Shareholder services fee-Institutional Shares 14,677
- ----------------------------------------------------------------------
Share registration costs 17,651
- ----------------------------------------------------------------------
Printing and postage 8,139
- ----------------------------------------------------------------------
Insurance premiums 679
- ----------------------------------------------------------------------
Miscellaneous 1,761
- ---------------------------------------------------------------------- ---------
Total expenses 622,106
- ----------------------------------------------------------------------
Waivers--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $(245,746)
- ----------------------------------------------------------
Waiver of shareholder services fee-Institutional Service
Shares (56,868)
- ----------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares (14,677)
- ---------------------------------------------------------- ---------
Total waivers (317,291)
- ---------------------------------------------------------------------- ---------
Net expenses 304,815
- ----------------------------------------------------------------------------------- ----------
Net investment income $1,843,754
- ----------------------------------------------------------------------------------- ----------
</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
(UNAUDITED) YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 1,843,754 $ 2,173,858
- ------------------------------------------------------ ---------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income
- ------------------------------------------------------
Institutional Service Shares (1,652,754) (1,958,685)
- ------------------------------------------------------
Institutional Shares (191,000) (215,173)
- ------------------------------------------------------ ---------------- -----------------
Change in net assets resulting from distributions
to shareholders (1,843,754) (2,173,858)
- ------------------------------------------------------ ---------------- -----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 410,552,935 318,706,288
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 1,126,686 1,590,062
- ------------------------------------------------------
Cost of shares redeemed (421,637,315) (246,540,494)
- ------------------------------------------------------ ---------------- -----------------
Change in net assets resulting from share
transactions (9,957,694) 73,755,856
- ------------------------------------------------------ ---------------- -----------------
Change in net assets (9,957,694) 73,755,856
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 103,889,129 30,133,273
- ------------------------------------------------------ ---------------- -----------------
End of period $ 93,931,435 $ 103,889,129
- ------------------------------------------------------ ---------------- -----------------
</TABLE>
(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 YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, -----------------
1997 1996 1995(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% 3.26% 1.35%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 0.53%* 0.50% 0.32% *
- -------------------------------------------------------------
Net investment income 3.11%* 3.21% 3.67% *
- -------------------------------------------------------------
Expense waiver/reimbursement(c) 0.52%* 0.76% 1.63% *
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $84,508 $92,275 $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 EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, -----------
1997 1996(A)
----------- -----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------
Net investment income 0.02 0.02
- ----------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------
Distributions from net investment income (0.02) (0.02)
- ---------------------------------------------------------------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ---------------------------------------------------------------- -------- --------
TOTAL RETURN(B) 1.63% 2.19%
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 0.39%* 0.37%*
- ----------------------------------------------------------------
Net investment income 3.25%* 3.40%*
- ----------------------------------------------------------------
Expense waiver/reimbursement(c) 0.67%* 0.89%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $9,423 $11,614
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 2, 1996 (date of
initial public investment) to October 31, 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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Michigan Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund offers two classes of
shares: Institutional Service Shares and 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 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 over a period not to exceed five years
from the Fund's commencement date.
USE OF ESTIMATES--The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
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 Board of Trustees (the
"Trustees") to issue an unlimited number of full and fractional shares
of beneficial interest (without par value). At April 30, 1997, capital
paid-in aggregated $93,931,435.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1997 OCTOBER 31, 1996
- -------------------------------------------------- ----------------- --------------------
<S> <C> <C>
Shares sold 384,750,386 286,548,847
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,115,265 1,585,481
- --------------------------------------------------
Shares redeemed (393,632,742) (225,992,144)
- -------------------------------------------------- --------------- -----------------
Net change resulting from Institutional Service
Share transactions (7,767,091) 62,142,184
- -------------------------------------------------- --------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
INSTITUTIONAL SHARES APRIL 30, 1997 OCTOBER 31, 1996(A)
- -------------------------------------------------- ----------------- --------------------
<S> <C> <C>
Shares sold 25,802,549 32,157,441
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 11,421 4,581
- --------------------------------------------------
Shares redeemed (28,004,573) (20,548,350)
- -------------------------------------------------- --------------- ----------------
Net change resulting from Institutional Share
transactions (2,190,603) 11,613,672
- -------------------------------------------------- -------------- ---------------
Net change resulting from Share transactions (9,957,694) 73,755,856
- -------------------------------------------------- -------------- ---------------
</TABLE>
(a) For the period from March 2, 1996 (date of initial public
investment) to October 31, 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.
MICHIGAN 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.
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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the
level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $20,243 were
borne initially by the Adviser. The Fund has agreed to reimburse
the Adviser for the organizational expenses during the five year
period following the effective date. For the period ended April
30, 1997, the Fund paid $1,597 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1997,
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
$198,165,000 and $219,024,000 respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
MICHIGAN MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
5. 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, 1997, 82.7% 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 percentage of investments
insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 12.9% of total investments.
<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,
John E. Murray, Jr. Treasurer, and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
S. Elliott Cohan
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, 1997
Federated Investors Logo
Cusip 314229691
G01478-01 (6/97)
Recyled Paper Logo
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, 1996 through
April 30, 1997. 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 keep your ready cash 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. At the end of the reporting
period, the fund's holdings were diversified among issuers that use
municipal bond financing for projects as varied as health care,
housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share. The fund's net assets stood at $155.1
million at the end of the reporting period.
Thank you for relying on Georgia Municipal Cash Trust to help your
ready cash pursue tax-free income every day. 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, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q
Can you comment on the economy and the interest rate environment
during the six month reporting period?
A
Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the
"Fed") brought about the first change in monetary policy in over
a year. On March 25, 1997 the Fed,
in the face of stronger than expected demand, voted to raise the
federal funds target rate from 5.25% to 5.50%. The move was viewed as
being pre-emptive against the threat of future inflationary pressures
possibly brought about by tight labor market conditions. Until that
point, movements in interest rates reflected shifting market sentiment
about the need for the Fed to move to a more restrictive policy. As
the reporting period began in November 1996, the economy had been
showing signs of slowing, thereby allaying the market's fears about
inflation. Then, in December, the market's uneasiness was once more
ignited as a string of economic statistics showed stronger growth and
Fed Chairman Alan Greenspan made cautionary statements regarding
inflation and "irrational exuberance" in the equity market. With
inflation still appearing to be benign, the market tolerated a steady
pace of growth into early 1997. However, Chairman Greenspan's
Humphrey-Hawkins testimony before Congress in late February marked a
turning point for the short-term money markets--indeed the bond and
equity markets as well--as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal in
interest rate movement and the market's perception about future Fed
policy. The ensuing weeks brought continued evidence of persistent
strength, and culminated in the Fed's action at the Federal Open
Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
- --------------------------------------------------------------------------------
Q
What were your strategies for the fund during the reporting
period?
A
The fund's average maturity at the beginning of the reporting
period was approximately 53 days, reflecting a neutral outlook on
the direction of interest rates. As signs of strength in the
economy became more apparent,
and as expectation of an imminent Fed tightening grew in the first
quarter of 1997, we shortened the average maturity target range to
between 35 and 45 days. We also emphasized the purchase of shorter
term fixed-rate paper while increasing the percentage of the portfolio
in seven-day variable rate demand notes ("VRDNs"). Seven-day VRDNs
provide more portfolio responsiveness to interest rate increases.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day VRDNs and short maturity commercial paper with purchases
of longer-term, six-to twelve-month Georgia exempt fixed rate notes
and bonds. This portfolio structure takes advantage of the steepness
of the yield curve and continues to pursue a competitive yield over
time.
Q
How has the fund's yield responded to this rate environment?
A
The fund's yield was affected by Fed policy (interest rate
increases), 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 rose over the reporting period. For the
fund, the seven-day net yield on April 30, 1997 was 3.92%, compared to
3.19% at the beginning of the reporting period.* For individual
investors at the highest federal and state tax brackets, the latest
yield was equivalent to a taxable yield of 7.21%.
Q
Looking through 1997, what is your outlook for short-term rates?
A
Although the Fed decided to hold short-term interest rates steady
in the March meeting, our expectations are that the Fed will find
cause to tighten monetary policy further in 1997 - perhaps as
soon as in July. It is also
anticipated that the overall tightening cycle will not be long in
terms of magnitude or duration. The pre-emptive move by the Fed should
help to preclude the need for more aggressive action down the road by
preventing the build-up of inflationary pressures. We would look to
see moderately higher short-term interest rates throughout the course
of the year, but not to the extent evidenced in the last tightening
cycle in 1994. As such, we will likely continue in our modestly
defensive stance for the portfolio until market conditions indicate
otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
GEORGIA MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.5%
- -----------------------------------------------------------------------------------
GEORGIA--99.5%
-----------------------------------------------------------------
$4,400,000 Athens-Clarke County, GA IDA, (Series 1988), 3.55% CP (Rhone
Merieux, Inc. Project)/(Societe Generale, Paris LOC), Mandatory
Tender 5/19/1997 $ 4,400,000
-----------------------------------------------------------------
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, N.C. LOC) 1,600,000
-----------------------------------------------------------------
4,800,000 Atlanta, GA, Urban Residential Finance Authority, Multifamily
Rental Housing Revenue Refunding Bonds (Series 1988A), 4.30% TOBs
(West Paces Club Towers Project)/(Sanwa Bank Ltd., Osaka LOC),
Optional Tender 5/1/1997 4,800,000
-----------------------------------------------------------------
2,370,000 Brunswick and Glynn County, GA Development Authority,
Multi-Mode Variable Rate IDRB's (Series 1996) Weekly VRDNs
(Daewoo Equipment Corp.)/(KeyBank, N.A. LOC) 2,370,000
-----------------------------------------------------------------
3,865,000 Brunswick, GA, Housing Authority, (Series S93) Weekly VRDNs
(Island Square Apartments)/(Columbus Bank and Trust Co., GA LOC) 3,865,000
-----------------------------------------------------------------
1,850,000 Carrolton, GA Payroll Development Authority, (Series 1993)
Weekly VRDNs (Sunox, Inc. Project)/(First Union National Bank,
Charlotte, N.C. LOC) 1,850,000
-----------------------------------------------------------------
2,000,000 Chatam County, GA Hospital Authority, (Series A), 4.15% Bonds
(Memorial Medical Center; Savannah, GA)/(AMBAC INS), 1/1/1998 2,007,142
-----------------------------------------------------------------
1,885,000 Cherokee County, GA Development Authority, IDRB Weekly VRDNs
(Morrison Products, GA)/(KeyBank, N.A. LOC) 1,885,000
-----------------------------------------------------------------
500,000 Clarke County, GA Hospital Authority, 3.90% Bonds
(Athens Medic Centr)/(MBIA INS), 1/1/1998 500,000
-----------------------------------------------------------------
3,000,000 Clayton County, GA Development Authority, (Series 1994)
Weekly VRDNs (Lear Seating Corp.)/(Chase Manhattan Bank N.A.,
New York LOC) 3,000,000
-----------------------------------------------------------------
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-----------------------------------------------------------------
$2,550,000 Clayton County, GA Housing Authority, Revenue Refunding Bonds
(Series 1992) Weekly VRDNs (Oxford Townhomes Project)/
(Amsouth Bank N.A., Birmingham LOC) $ 2,550,000
-----------------------------------------------------------------
2,955,000 Cobb County, GA IDA Weekly VRDNs (Atlanta RDC Co.)/
(First Union National Bank, Charlotte, N.C. LOC) 2,955,000
-----------------------------------------------------------------
1,800,000 Cobb County, GA IDA, IDRB (Series 1995) Weekly VRDNs
(Consolidated Engineering Company, Inc. Project)/
(NationsBank, South LOC) 1,800,000
-----------------------------------------------------------------
2,500,000 Cobb County, GA School District, 5.00% Bonds, 2/1/1998 2,525,636
-----------------------------------------------------------------
1,365,000 Cobb County, GA, Water & Sewer, 5.00% Bonds, 7/1/1997 1,367,434
-----------------------------------------------------------------
970,000 Columbia County, GA Development Authority, (Series 1991) Weekly
VRDNs (Augusta Sportswear, Inc.)/(Wachovia Bank of Georgia NA,
Atlanta LOC) 970,000
-----------------------------------------------------------------
1,070,000 Columbus, GA IDA Industrial & Port Development Commission,
(Series 1992) Weekly VRDNs (Maine Street Village Partnership)/
(Columbus Bank and Trust Co., GA LOC) 1,070,000
-----------------------------------------------------------------
1,185,000 Columbus, GA IDA, (Series 90B) Weekly VRDNs
(R. P. Real Estate, Inc.)/(Columbus Bank and Trust Co., GA LOC) 1,185,000
-----------------------------------------------------------------
2,000,000 Conyers-Rockdale-Big Haynes, GA Impoundment Authority, (Series
1997), 3.75% BANs, 12/31/1997 2,000,643
-----------------------------------------------------------------
3,000,000 Coweta County, GA IDA, (Series 1995) Weekly VRDNs
(Lanelco L.L.C. Project)/(NBD Bank, Michigan LOC) 3,000,000
-----------------------------------------------------------------
1,000,000 Coweta County, GA Residential Care Facilities for the Elderly,
First Lien Revenue Bonds (Series 1996B) Weekly VRDNs (Wesley
Woods of Newman-Peachtree City, Inc. Project)/(Banque Paribas,
Paris LOC) 1,000,000
-----------------------------------------------------------------
6,000,000 Crisp County, GA Development Authority, (Series B), 4.10% TOBs
(Masonite Corporation)/(International Paper Co. GTD), Optional
Tender 9/1/1997 6,000,000
-----------------------------------------------------------------
1,580,000 De Kalb County, GA Development Authority, (Series 1992)
Weekly VRDNs (House of Cheatham, Inc. Project)/
(NationsBank, South LOC) 1,580,000
-----------------------------------------------------------------
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-----------------------------------------------------------------
$ 600,000 De Kalb County, GA Development Authority, (Series 1993) Weekly
VRDNs (Pet, Inc.)/(PNC Bank, N.A. LOC) $ 600,000
-----------------------------------------------------------------
1,250,000 De Kalb County, GA Development Authority, (Series 1996) Weekly
VRDNs (DeKalb Steel, Inc.)/(SouthTrust Bank of Georgia, Atlanta
LOC) 1,250,000
-----------------------------------------------------------------
4,000,000 De Kalb County, GA Multi-Family Housing Authority, Multifamily
Housing Revenue Bonds (Series 1996) Weekly VRDNs (Bryton Hill
Apartments)/(PNC Bank, Kentucky LOC) 4,000,000
-----------------------------------------------------------------
1,000,000 Forsythe County, GA Development Authority, IDRB (Series 1995)
Weekly VRDNs (American BOA, Inc. Project)/(Dresdner Bank Ag,
Frankfurt LOC) 1,000,000
-----------------------------------------------------------------
6,100,000 Franklin County, GA Industrial Building Authority, (Series 1995)
Weekly VRDNs (Bosal Industries, Inc.)/(ABN AMRO Bank N.V.,
Amsterdam LOC) 6,100,000
-----------------------------------------------------------------
1,660,000 Fulton County, GA Housing Authority, (Series 1996) Weekly VRDNs
(Champions Green Apartments Project)/(SouthTrust Bank of Alabama,
Birmingham LOC) 1,660,000
-----------------------------------------------------------------
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) 2,335,000
-----------------------------------------------------------------
2,200,000 Fulton County, GA IDA Weekly VRDNs (Automatic Data Processing,
Inc.) 2,200,000
-----------------------------------------------------------------
3,300,000 Fulton County, GA IDA Weekly VRDNs (C.K.S. Packaging, Inc.)/
(SouthTrust Bank of Georgia, Atlanta LOC) 3,300,000
-----------------------------------------------------------------
1,000,000 Fulton County, GA School District, 7.625% Bonds (United States
Treasury PRF), 5/1/1997 (@103) 1,030,000
-----------------------------------------------------------------
300,000 Gainesville, GA Redevelopment Authority, IDRB (Series 1986)
Weekly VRDNs (Hotel of Gainesville Associates Project)/
(Regions Bank, Alabama LOC) 300,000
-----------------------------------------------------------------
1,750,000 Georgia Environmental Facilities Authority, (Series 1992), 6.10%
Bonds (Georgia State), 7/1/1997 1,757,178
-----------------------------------------------------------------
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-----------------------------------------------------------------
$2,000,000 Georgia Municipal Electric Authority, (Series P), 8.125% Bonds
(United States Treasury PRF), 1/1/1998 (@102) $ 2,096,634
-----------------------------------------------------------------
2,000,000 Georgia Ports Authority, (Series 1996A) Weekly VRDNs
(Colonel's Island Terminal)/(SunTrust Bank, Atlanta LOC) 2,000,000
-----------------------------------------------------------------
6,345,000 (b) Georgia State HFA, (Series 1990C), 3.70% TOBs (First National
Bank of Chicago LIQ), Optional Tender 6/1/1997 6,345,000
-----------------------------------------------------------------
5,190,000 Georgia State Municipal Gas Authority, Gas Revenue Bonds (Series
D), 3.65% CP (Wachovia Bank of NC, NA, Winston-Salem LOC),
Mandatory Tender 7/24/1997 5,190,000
-----------------------------------------------------------------
5,800,000 Gwinnett County, GA IDA Daily VRDNs (Volvo AB)/(Union Bank of
Switzerland, Zurich LOC) 5,800,000
-----------------------------------------------------------------
3,300,000 Gwinnett County, GA IDA, (Series 1996) Weekly VRDNs
(Sidel, Inc. Project)/(NationsBank, South LOC) 3,300,000
-----------------------------------------------------------------
6,750,000 Jackson County, GA IDA, (Series 1996) Weekly VRDNs (Buhler
Quality Yarns Corporation Project)/(Union Bank of Switzerland,
Zurich LOC) 6,750,000
-----------------------------------------------------------------
3,180,000 La Grange, GA, Multi-Family Housing Authority, Revenue Bonds,
4.25% TOBs (Lee's Crossing Project Phase II), Optional Tender
5/1/1997 3,180,000
-----------------------------------------------------------------
3,000,000 La Grange, GA, Multi-Family Housing Authority, Revenue Bonds,
4.25% TOBs (Lee's Crossing Project Phase I), Optional Tender
5/1/1997 3,000,000
-----------------------------------------------------------------
4,000,000 Lowndes County Schools, GA, 3.88% TANs, 12/31/1997 4,002,074
-----------------------------------------------------------------
940,000 Macon-Bibb County, GA Industrial Authority, IDRB (Series 1990)
Weekly VRDNs (Diamond Plastics Corporation Project)/
(Nationsbank, N.A., Charlotte LOC) 940,000
-----------------------------------------------------------------
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) 1,280,000
-----------------------------------------------------------------
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-----------------------------------------------------------------
$4,470,000 (b) Marietta, GA Housing Authority, Multifamily Housing Revenue Bonds
(Series 1995) Weekly VRDNs (Chalet Apartments Project)/
(General Electric Capital Corp. LOC) $ 4,470,000
-----------------------------------------------------------------
3,000,000 Municipal Electric Authority of Georgia, (Series 1985A), 3.70% CP
(Bayerische Landesbank Girozentrale, Credit Suisse, Zurich and
Morgan Guaranty Trust Co., New York LOCs), Mandatory Tender
7/25/1997 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) 1,000,000
-----------------------------------------------------------------
1,000,000 Rockdale County, GA Hospital Authority, Revenue Anticipation
Certificates (Series 1994) Weekly VRDNs (Rockdale Hospital)/
(SunTrust Bank, Atlanta LOC) 1,000,000
-----------------------------------------------------------------
3,490,000 Rome, GA, 4.25% TANs, 12/31/1997 3,497,240
-----------------------------------------------------------------
1,200,000 Roswell, GA Housing Authority, Multifamily Housing Refunding
Revenue Bonds (Series 1988A) Weekly VRDNs (Belcourt Ltd.
Project)/(Northern Trust Co., Chicago, IL LOC) 1,200,000
-----------------------------------------------------------------
3,850,000 Savannah, GA EDA, (Series 1995A) Weekly VRDNs
(Home Depot, Inc.) 3,850,000
-----------------------------------------------------------------
4,000,000 Screven County, GA IDA, (Series 1995) Weekly VRDNs (Sylvania Yarn
Systems, Inc. Project)/(SunTrust Bank, Atlanta LOC) 4,000,000
-----------------------------------------------------------------
1,000,000 Wayne County, GA, IDA, Revenue Bonds, (Series 1995) Weekly VRDNs
(Harsco Corp.)/(NationsBank, N.A., Charlotte LOC) 1,000,000
-----------------------------------------------------------------
4,000,000 Whitfield County, GA Development Authority Weekly VRDNs (Franklin
Industries Inc., Project)/(NationsBank, N.A., Charlotte LOC) 4,000,000
-----------------------------------------------------------------
2,115,000 Whitfield County, GA Development Authority, (Series 1996)
Weekly VRDNs (AMC International, Inc. Project)/
(SouthTrust Bank of Alabama, Birmingham LOC) 2,115,000
-----------------------------------------------------------------
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- -----------------------------------------------------------------------------------
GEORGIA--CONTINUED
-----------------------------------------------------------------
$1,485,000 Winder-Barrow Industrial Building Authority, (Series 1996) Weekly
VRDNs (Windor Builders Supply, Inc. Project)/(National Bank of
Canada, Montreal LOC) $ 1,485,000
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $154,313,981
----------------------------------------------------------------- ------------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 64.4%
of the portfolio as calculated based upon total portfolio market
value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories by one or more nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, ands F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At April 30 1997, the portfolio securities were rated as follows:
Tier Rating Percent Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
------------- --------------
<S> <C>
93.52% 6.48%
</TABLE>
(b) Denotes a restricted security which is subject to restrictions on
resale under Federal Securities laws. At April 30, 1997, these
securities amounted to $10,815,000 which represents 7.0% of net
assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($155,123,623) at April 30, 1997.
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation BANs -- Bond
Anticipation Notes CP -- Commercial Paper EDA -- Economic Development
Authority GTD -- Guaranty HFA -- Housing Finance Authority IDA --
Industrial Development Authority IDRB -- Industrial Development
Revenue Bond INS -- Insured LIQ -- Liquidity Agreement LOC(s) --
Letter of Credit(s) MBIA -- Municipal Bond Investors Assurance PRF --
Prerefunded 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)
GEORGIA MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $154,313,981
- -------------------------------------------------------------------------------
Cash 336,846
- -------------------------------------------------------------------------------
Income receivable 1,097,727
- -------------------------------------------------------------------------------
Deferred expenses 17,100
- ------------------------------------------------------------------------------- ------------
Total assets 155,765,654
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Payable for shares redeemed $134,000
- --------------------------------------------------------------------
Income distribution payable 464,836
- --------------------------------------------------------------------
Accrued expenses 43,195
- -------------------------------------------------------------------- --------
Total liabilities 642,031
- ------------------------------------------------------------------------------- ------------
NET ASSETS for 155,123,623 shares outstanding $155,123,623
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------
$155,123,623 / 155,123,623 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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $2,765,003
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $ 374,476
- ----------------------------------------------------------------------
Administrative personnel and services fee 62,076
- ----------------------------------------------------------------------
Custodian fees 5,282
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,792
- ----------------------------------------------------------------------
Directors'/Trustees' fees 745
- ----------------------------------------------------------------------
Auditing fees 4,819
- ----------------------------------------------------------------------
Legal fees 1,413
- ----------------------------------------------------------------------
Portfolio accounting fees 21,757
- ----------------------------------------------------------------------
Shareholder services fee 187,238
- ----------------------------------------------------------------------
Share registration costs 12,401
- ----------------------------------------------------------------------
Printing and postage 4,964
- ----------------------------------------------------------------------
Insurance premiums 1,761
- ----------------------------------------------------------------------
Miscellaneous 3,906
- ---------------------------------------------------------------------- ---------
Total expenses 694,630
- ----------------------------------------------------------------------
Waivers--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $(282,700)
- ----------------------------------------------------------
Waiver of shareholder services fee (44,937)
- ---------------------------------------------------------- ---------
Total waivers (327,637)
- ---------------------------------------------------------------------- ---------
Net expenses 366,993
- ----------------------------------------------------------------------------------- ----------
Net investment income $2,398,010
- ----------------------------------------------------------------------------------- ----------
</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, 1997 OCTOBER 31, 1996
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------
OPERATIONS--
- -----------------------------------------------------
Net investment income $ 2,398,010 $ 3,883,056
- ----------------------------------------------------- ---------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------
Distributions from net investment income (2,398,010) (3,883,056)
- ----------------------------------------------------- ---------------- -----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------
Proceeds from sale of shares 303,433,267 594,865,591
- -----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 1,131,552 2,027,740
- -----------------------------------------------------
Cost of shares redeemed (272,381,229) (585,230,921)
- ----------------------------------------------------- ---------------- -----------------
Change in net assets resulting from share
transactions 32,183,590 11,662,410
- ----------------------------------------------------- ---------------- -----------------
Change in net assets 32,183,590 11,662,410
- -----------------------------------------------------
NET ASSETS:
- -----------------------------------------------------
Beginning of period 122,940,033 111,277,623
- ----------------------------------------------------- ---------------- -----------------
End of period $ 155,123,623 $ 122,940,033
- ----------------------------------------------------- ---------------- -----------------
</TABLE>
(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) YEAR ENDED
APRIL 30, OCTOBER 31,
----------- ------------------
1997 1996 1995(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) 1.60% 3.37% 0.73%
- -----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------
Expenses 0.49%* 0.46% 0.25%*
- -----------------------------------------------------------
Net investment income 3.20%* 3.31% 3.81%*
- -----------------------------------------------------------
Expense waiver/reimbursement(c) 0.44%* 0.52% 0.75%*
- -----------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------
Net assets, end of period (000 omitted) $155,124 $122,940 $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, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Georgia Municipal Cash Trust (the "Fund"). The financial statements of
the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The 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 over a period not to exceed five years
from the Fund's commencement date.
RESTRICTED SECURITIES--Restricted securities are securities that
may only be resold upon registration under federal securities
laws or in transactions exempt from such registration. Many
restricted securities may be resold in the secondary market in
transactions exempt from registration. In some
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
cases, the restricted securities may be resold without
registration upon exercise of a demand feature. Such restricted
securities may be determined to be liquid under criteria
established by the Board of Trustees (the "Trustees"). The Fund
will not incur any registration costs upon such resales.
Restricted securities are valued at amortized cost in accordance
with Rule 2a-7 under the Act. Additional information on each
restricted security held at April 30, 1997 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Georgia State Housing Finance Authority, (Series
1990C) 12/01/96 $6,345,000
Marietta, GA Housing Authority, Multifamily
Housing Revenue Bonds (Series 1995) 12/02/96-01/02/97 4,470,000
</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, 1997, capital paid-in aggregated $155,123,623.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
----------------- -----------------
<S> <C> <C>
Shares sold 303,433,267 594,865,591
- -----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,131,552 2,027,740
- -----------------------------------------------------
Shares redeemed (272,381,229) (585,230,921)
- ----------------------------------------------------- --------------- ---------------
Net change resulting from Share transactions 32,183,590 11,662,410
- ----------------------------------------------------- --------------- ---------------
</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.
GEORGIA 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.
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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the
level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $13,648 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,
1997, the Fund paid $1,235 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1997,
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
$182,940,000 and $154,620,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
GEORGIA MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
5. 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, 1997, 76.1% 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 percentage 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.
<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,
John E. Murray, Jr. Treasurer, and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
S. Elliott Cohan
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.
- --------------------------------------------------------------------------------
TENNESSEE
- --------------------------------------------------------------------------------
MUNICIPAL
- --------------------------------------------------------------------------------
CASH
- --------------------------------------------------------------------------------
TRUST
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1997
Federated Investors Logo
Cusip 314229634
Cusip 314229632
G01865-02 (6/97)
Recyled Paper Logo
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of
Tennessee Municipal Cash Trust, a portfolio of Federated Municipal
Trust, which covers the six-month period from November 1, 1996 through
April 30, 1997. 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 keep your ready cash pursuing double
tax-free income--free from federal regular income tax* and Tennessee
state income tax--through a portfolio concentrated in high-quality,
short-term Tennessee municipal securities. At the end of the reporting
period, the fund's holdings were diversified among issuers that use
municipal bond financing for projects as varied as health care,
housing, community development, and transportation.
This double tax-free advantage means 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 reporting period, the fund paid double tax-free dividends
totaling $0.02 per share for both Institutional Shares and
Institutional Service Shares. The fund's net assets stood at more than
$30 million at the end of the reporting period.
Thank you for relying on Tennessee Municipal Cash Trust to help your
ready cash pursue tax-free income every day. 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, 1997
* 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 the fund's portfolio manager, Jeff A. Kozemchak, CFA, Vice
President, Federated Management
Q
Can you comment on the economy and the interest rate environment
during the six month reporting period?
A
Although it did not occur until near the end of the fund's
semi-annual reporting period, the Federal Reserve Board (the
"Fed") brought about the first change in monetary policy in over
a year. On March 25, 1997 the Fed,
in the face of stronger than expected demand, voted to raise the
federal funds target rate from 5.25% to 5.50%. The move was viewed as
being pre-emptive against the threat of future inflationary pressures
possibly brought about by tight labor market conditions. Until that
point, movements in interest rates reflected shifting market sentiment
about the need for the Fed to move to a more restrictive policy. As
the reporting period began in November 1996, the economy had been
showing signs of slowing, thereby allaying the market's fears about
inflation. Then, in December, the market's uneasiness was once more
ignited as a string of economic statistics showed stronger growth and
Fed Chairman Alan Greenspan made cautionary statements regarding
inflation and "irrational exuberance" in the equity market. With
inflation still appearing to be benign, the market tolerated a steady
pace of growth into early 1997. However, Chairman Greenspan's
Humphrey-Hawkins testimony before Congress in late February marked a
turning point for the short-term money markets--indeed the bond and
equity markets as well--as his relatively hawkish statements revealed
fears at the Fed that the transitory factors that had been keeping
inflation under control in the face of fairly robust growth may be
coming to an end. This statement by the Fed caused a sharp reversal in
interest rate movement and the market's perception about future Fed
policy. The ensuing weeks brought continued evidence of persistent
strength, and culminated in the Fed's action at the Federal Open
Market Committee in late March.
For the first three months of the reporting period, short-term
interest rates traded in a relatively narrow range as the continued
friendly inflation picture provided some comfort to market
participants. The yield on the six-month Treasury bill, for example,
moved in a range between 5.20% and 5.35% from the beginning of
November through early February. However, short-term interest rates
began to rise in late February, and by the time of the Fed tightening
in late March, had built in much of the expectations regarding the Fed
decision. In April, the financial markets continued to focus on the
likelihood of an additional tightening move later in May, causing
short-term yields to rise even further. Yields on the six-month
Treasury bill rose sharply over this interim period, moving from a low
of 5.20% in mid-February to a high of 5.68% in late April before
falling back to 5.53% by the end of reporting period.
Q
What were your strategies for the fund during the reporting
period?
A
The fund's average maturity at the beginning of the period was
approximately 60 days, reflecting a neutral outlook on the
direction of interest rates. As signs of strength in the economy
became more apparent,
and as expectation of an imminent Fed tightening grew in the first
quarter of 1997 we emphasized the purchase of shorter term fixed-rate
paper while maintaining approximately 60%-70% of
- --------------------------------------------------------------------------------
the portfolio in seven-day variable rate demand notes ("VRDNs").
Seven-day VRDNs provide more portfolio responsiveness to interest rate
increases. We are now targeting an average maturity range between 50
and 60 days.
Once an average maturity range is targeted, the portfolio attempts to
maximize performance through ongoing relative value analysis. Relative
value analysis includes the comparison of the richness or cheapness of
municipal securities to one another as well as municipals to taxable
instruments, such as treasury securities. The fund's portfolio
remained barbelled in structure, which combined a significant portion
in seven-day VRDNs and short maturity commercial paper with purchases
of longer-term, one year Tennessee fixed rate bonds. This portfolio
structure takes advantage of the steepness of the yield curve and
continues to purse a competitive yield over time.
Q
How has the fund's yield responded to this rate environment?
A
The fund's yield was affected by Fed policy (interest rate
increases), 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 rose over the reporting period. For the
fund, the seven-day net yield of Institutional Shares on April 30,
1997 was 3.79%, compared to 3.30% at the beginning of the reporting
period*. For the Institutional Service Shares, the seven-day net yield
was 3.54% at the end of the reporting period compared to 3.05% six
months ago*.
Q
Looking through 1997, what is your outlook for short-term rates?
A
Although the Fed decided to hold short-term interest rates steady
in the March meeting, our expectations are that the Fed will find
cause to tighten monetary policy further in 1997--perhaps as soon
as in July. It is also
anticipated that the overall tightening cycle will not be long in
terms of magnitude or duration. The pre-emptive move by the Fed should
help to preclude the need for more aggressive action down the road by
preventing the build-up of inflationary pressures. We would look to
see moderately higher short-term interest rates throughout the course
of the year, but not to the extent evidenced in the last tightening
cycle in 1994. As such, we will likely continue in our modestly
defensive stance for the portfolio until market conditions indicate
otherwise.
* Performance quoted represents past performance and is not indicative
of future results. Yield will vary. The seven-day net yield is
calculated daily, based on the income dividends for the seven days
ending on the date of calculation and then compounded and
annualized.
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--98.8%
- ------------------------------------------------------------------------------------
TENNESSEE--92.2%
------------------------------------------------------------------
$1,000,000 Benton County TN IDB, (Series 1996) Weekly VRDNs (Jones Plastic
and Engineering Corp.)/(National City Bank, Kentucky LOC) $ 1,000,000
------------------------------------------------------------------
1,000,000 Chattanooga, TN IDB, Revenue Bonds (Series 1997) Weekly VRDNs (TB
Wood's Inc. Project)/(PNC Bank, N.A. LOC) 1,000,000
------------------------------------------------------------------
1,500,000 Chattanooga-Hamilton County, TN Hospital Authority Daily VRDNs
(Erlanger Medical Center)/(Morgan Guaranty Trust Co., New York
LIQ) 1,500,000
------------------------------------------------------------------
1,000,000 Chattanooga-Hamilton County, TN Hospital Authority, Hospital
Revenue and Refunding Bonds (Series 1993), 4.40% Bonds (Erlanger
Medical Center)/(FSA INS), 10/1/1997 1,003,256
------------------------------------------------------------------
800,000 Collierville, TN IDB, Industrial Development Revenue Bonds (Series
1994) Weekly VRDNs (Ardco, Inc.)/(Harris Trust & Savings Bank,
Chicago LOC) 800,000
------------------------------------------------------------------
250,000 Greenfield, TN IDB, (Series 1995) Weekly VRDNs (Plastic Products
Company Project)/(Norwest Bank Minnesota, Minneapolis LOC) 250,000
------------------------------------------------------------------
1,200,000 Hawkins County, TN IDB, (Series 1995) Weekly VRDNs (Sekisui Ta
Industries, Inc. Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 1,200,000
------------------------------------------------------------------
900,000 Hendersonville, TN IDB, (Series 1996) Weekly VRDNs (Betty Machine
Co. Project)/(First Union National Bank, Charlotte, N.C. LOC) 900,000
------------------------------------------------------------------
880,000 Jackson, TN, Electric System Revenue Refunding and Improvement
Bonds (Series 1997), 3.70% Bonds (MBIA Corporation INS), 2/1/1998 880,000
------------------------------------------------------------------
400,000 Knox County, TN IDB, (Series 1996) Weekly VRDNs (Health Ventures,
Inc. Project)/(SunTrust Bank, Nashville LOC) 400,000
------------------------------------------------------------------
1,000,000 McMinn County, TN IDB, Industrial Development Bonds (Series 1995)
Weekly VRDNs (Creative Fabrication Corp.)/(NBD Bank, Michigan LOC) 1,000,000
------------------------------------------------------------------
770,000 Memphis, TN, (Series 1996), 5.00% Bonds, 7/1/1997 771,373
------------------------------------------------------------------
1,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Hospital Revenue Bonds, (Series 1992), 3.55% CP (Baptist Hospital,
Inc. (TN))/(NationsBank, South LIQ), Mandatory Tender 5/1/1997 1,000,000
------------------------------------------------------------------
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
TENNESSEE--CONTINUED
------------------------------------------------------------------
$1,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Revenue Bonds (Series 1985A), 3.65% TOBs (Vanderbilt University)
1/15/1998 $ 1,000,000
------------------------------------------------------------------
1,500,000 Metropolitan Government Nashville & Davidson County, TN IDB,
(Series 1994) Weekly VRDNs (Shoney's Inn)/(First Union National
Bank,Charlotte, N.C. LOC) 1,500,000
------------------------------------------------------------------
300,000 Paris, TN, IDB Weekly VRDNs (Plumley--Marugo Limited)/
(PNC Bank, Kentucky LOC) 300,000
------------------------------------------------------------------
700,000 Roane, TN IDB, (Series 1982) Monthly VRDNs (Fortafil Fibers, Inc.
Project)/(ABN AMRO Bank N.V., Amsterdam LOC) 700,000
------------------------------------------------------------------
1,000,000 Shelby County, TN Health Education & Housing Facilities Board,
4.05% TOBs (Methodist Health System, Inc.)/(MBIA Corporation INS)/
(Sanwa Bank Ltd, Osaka LIQ), Optional Tender 8/1/1997 1,000,000
------------------------------------------------------------------
1,130,000 Shelby County, TN Health Education & Housing Facilities Board,
9.625% Bonds (Lebonheur Children's Medical Center)/(United States
Treasury PRF), 7/1/1997 (@100) 1,140,938
------------------------------------------------------------------
1,000,000 Shelby County, TN Health Education & Housing Facilities Board,
Multifamily Housing Revenue Bonds (Series 1988) Weekly VRDNs
(Arbor Lake Project)/(PNC Bank, N.A. LOC) 1,000,000
------------------------------------------------------------------
1,575,000 Shelby County, TN, 6.50% Bonds (United States Treasury PRF),
8/1/1997 (@101.75) 1,613,977
------------------------------------------------------------------
1,000,000 South Pittsburg, TN IDB, (Series 1996) Weekly VRDNs (Lodge
Manufacturing Co. Project)/(SunTrust Bank, Nashville LOC) 1,000,000
------------------------------------------------------------------
1,000,000 Tennessee Housing Development Agency, (Series 1996-5), 4.00% TOBs,
Mandatory Tender 8/21/1997 1,000,000
------------------------------------------------------------------
1,500,000 Tennessee Housing Development Agency, Homeownership Program Bonds
(Issue 1996-3), 3.85% TOBs, Optional Tender 5/29/1997 1,500,000
------------------------------------------------------------------
2,385,000 Tennessee State School Board Authority, (Series 1996 B), 5.00%
Bonds, 5/1/1997 2,385,000
------------------------------------------------------------------
1,000,000 Tennessee State, (Series A), 5.50% Bonds, 3/1/1998 1,014,575
------------------------------------------------------------------
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
TENNESSEE--CONTINUED
------------------------------------------------------------------
$ 300,000 Union County, TN IDB, (Series 1995) Weekly VRDNs (Cooper Container
Corporation Project)/(SunTrust Bank, Nashville LOC) $ 300,000
------------------------------------------------------------------
735,000 Williamson County,TN, General Obligation Capital Outlay Notes
(Series 1996), 4.60% Bonds, 10/1/1997 737,541
------------------------------------------------------------------ -----------
Total 27,896,660
------------------------------------------------------------------ -----------
PUERTO RICO--3.3%
------------------------------------------------------------------
1,000,000 Puerto Rico Industrial, Tourist, Education, Medical &
Environmental Control Finance Authority, (Series 1994A), 3.80% CP
(Inter American University of Puerto Rico)/(Banque Paribas, Paris
LOC), Mandatory Tender 6/11/1997 1,000,000
------------------------------------------------------------------ -----------
GUAM--3.3%
------------------------------------------------------------------
1,000,000 Guam Water System Revenue Bonds, (Series 1989), 6.70% Bonds
(Capital Guaranty Corp. INS), 7/1/1997 1,004,596
------------------------------------------------------------------ -----------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $29,901,256
------------------------------------------------------------------ -----------
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 44.0%
of the portfolio as calculated based upon total market value.
(a) The fund may only invest in securities rated in one of the two
highest short-term rating categories one or more by nationally
recognized statistical rating organizations ("NRSROs") or unrated
securities of comparable quality. An NRSRO's two highest rating
categories are determined without regard for sub-categories and
gradations. For example, securities rated SP-1+, SP-1 or SP-2 by
Standard & Poor's Rating Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., or F-1+, F-1, and F-2 by Fitch Investors
Service, Inc. are all considered rated in one of the two highest
short-term rating categories.
Securities rated in the highest short-term rating category (and
unrated securities of comparable quality) are identified as First
Tier securities. Securities rated in the second highest short-term
rating category (and unrated securities of comparable quality) are
identified as Second Tier securities. The fund follows applicable
regulations in determining whether a security is rated and whether
a security rated by multiple NRSROs in different rating categories
should be identified as a First or Second Tier security.
At January 31, 1997, the portfolio securities were rated as
follows:
Tier Rating Percent Based on Total Market Value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
------------- --------------
<S> <C>
100% 0%
</TABLE>
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($30,252,350) at April 30, 1997.
TENNESSEE MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
CP -- Commercial Paper
FSA -- Financial Security Assurance
HEFA -- Health and Education Facilities Authority IDB -- Industrial
Development Bond INS -- Insured LIQ -- Liquidity Agreement LOC --
Letter of Credit MBIA -- Municipal Bond Investors Assurance PRF --
Prerefunded TOBs -- Tender Option Bonds VRDNs -- Variable Rate Demand
Notes </TABLE>
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $29,901,256
- --------------------------------------------------------------------------------
Cash 130,212
- --------------------------------------------------------------------------------
Income receivable 330,980
- -------------------------------------------------------------------------------- -----------
Total assets 30,362,448
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable 110,098
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 30,252,350 shares outstanding $30,252,350
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- --------------------------------------------------------------------------------
$15,310,667 / 15,310,667 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
INSTITUTIONAL SERVICE SHARES:
- --------------------------------------------------------------------------------
$14,941,683 / 14,941,683 shares outstanding $1.00
- -------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $822,338
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 112,520
- ------------------------------------------------------------------------
Administrative personnel and services fee 76,811
- ------------------------------------------------------------------------
Custodian fees 11,509
- ------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 14,822
- ------------------------------------------------------------------------
Directors'/Trustees' fees 1,488
- ------------------------------------------------------------------------
Auditing fees 8,634
- ------------------------------------------------------------------------
Legal fees 1,756
- ------------------------------------------------------------------------
Portfolio accounting fees 29,812
- ------------------------------------------------------------------------
Shareholder services fee-Institutional Shares 18,493
- ------------------------------------------------------------------------
Shareholder services fee-Institutional Service Shares 37,679
- ------------------------------------------------------------------------
Share registration costs 17,345
- ------------------------------------------------------------------------
Printing and postage 5,289
- ------------------------------------------------------------------------
Insurance premiums 1,254
- ------------------------------------------------------------------------
Miscellaneous 2,366
- ------------------------------------------------------------------------ ---------
Total expenses 339,778
- ------------------------------------------------------------------------
Waivers and reimbursements--
- ------------------------------------------------------------------------
Waiver of investment advisory fee $(112,520)
- ------------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares (18,493)
- ------------------------------------------------------------
Reimbursement of other operating expenses (91,555)
- ------------------------------------------------------------ ---------
Total waivers and reimbursements (222,568)
- ------------------------------------------------------------------------ ---------
Net expenses 117,210
- ------------------------------------------------------------------------------------- --------
Net investment income $705,128
- ------------------------------------------------------------------------------------- --------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) PERIOD ENDED
APRIL 30, 1997 OCTOBER 31, 1996
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------
Net investment income $ 705,128 $ 487,901
- ------------------------------------------------------ ---------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------
Distributions from net investment income
- ------------------------------------------------------
Institutional Shares (244,655) (226,076)
- ------------------------------------------------------
Institutional Service Shares (460,473) (261,825)
- ------------------------------------------------------ ---------------- -----------------
Change in net assets resulting from distributions
to shareholders (705,128) (487,901)
- ------------------------------------------------------ ---------------- -----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------
Proceeds from sale of shares 72,184,431 165,734,867
- ------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 282,274 209,339
- ------------------------------------------------------
Cost of shares redeemed (89,862,061) (118,296,500)
- ------------------------------------------------------ ---------------- -----------------
Change in net assets resulting from share
transactions (17,395,356) 47,647,706
- ------------------------------------------------------ ---------------- -----------------
Change in net assets (17,395,356) 47,647,706
- ------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------
Beginning of period 47,647,706 --
- ------------------------------------------------------ ---------------- -----------------
End of period $ 30,252,350 $ 47,647,706
- ------------------------------------------------------ ---------------- -----------------
</TABLE>
* For the period from May 22, 1996 (date of initial public investment)
to October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
(UNAUDITED) ENDED
APRIL 30, OCTOBER 31,
1997 1996(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) 1.67% 1.59%
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 0.35%* 0.10%*
- ----------------------------------------------------------------
Net investment income 3.31%* 3.57%*
- ----------------------------------------------------------------
Expense waiver/reimbursement(c) 1.16%* 1.62%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $15,310 $17,824
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 22, 1996 (date of
initial public investment) to October 31, 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)
TENNESSEE MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
(UNAUDITED) ENDED
APRIL 30, OCTOBER 31,
1997 1996(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) 1.53% 1.48%
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 0.60%* 0.39%*
- ----------------------------------------------------------------
Net investment income 3.05%* 3.26%*
- ----------------------------------------------------------------
Expense waiver/reimbursement(c) 0.91%* 1.33%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $14,942 $29,824
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 22, 1996 (date of
initial public investment) to October 31, 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)
TENNESSEE MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (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 sixteen
portfolios. The financial statements included herein are only those of
Tennessee Municipal Cash Trust (the "Fund"). The financial statements
of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to
the portfolio in which shares are held. The Fund offers two classes of
shares: Institutional Shares and Institutional Service Shares. 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 Tennessee 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.
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.
TENNESSEE MUNICIPAL CASH TRUST
- --------------------------------------------------------------------------------
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue an unlimited number of full and fractional shares
of beneficial interest (without par value) for each class of shares.
At April 30, 1997, capital paid-in aggregated $30,252,350.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
INSTITUTIONAL SHARES APRIL 30, 1997 OCTOBER 31, 1996(A)
- -------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
Shares sold 35,936,962 34,644,791
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 2,077 3,455
- --------------------------------------------------
Shares redeemed (38,452,175) (16,824,443)
- -------------------------------------------------- --------------- ----------------
Net change resulting from Institutional Share
transactions (2,513,136) 17,823,803
- -------------------------------------------------- --------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1997 OCTOBER 31, 1996(A)
- -------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
Shares sold 36,247,469 131,090,076
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 280,197 205,884
- --------------------------------------------------
Shares redeemed (51,409,886) (101,472,057)
- -------------------------------------------------- --------------- -----------------
Net change resulting from Institutional Service
Share transactions (14,882,220) 29,823,903
- -------------------------------------------------- --------------- -----------------
Net change resulting from Share transactions (17,395,356) 47,647,706
- -------------------------------------------------- --------------- -----------------
</TABLE>
(a) For the period from May 22, 1996 (date of initial public
investment) to October 31, 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
TENNESSEE 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 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
("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting
records for which it receives a fee. The fee is based on the
level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $24,645 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,
1997, the Fund paid $2,328 pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended April 30, 1997,
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
$35,700,000 and $56,535,000, respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are
Officers and Directors or Trustees of the above companies.
5. 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, 1997, 54.3% of the
securities in the portfolio of investments are backed by letters of
credit or bond insurance of various financial institutions and
financial guaranty assurance agencies. The percentage of investments
insured by or supported (backed) by a letter of credit from any one
institution or agency did not exceed 8.0% of total investments.
<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,
John E. Murray, Jr. Treasurer, and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
S. Elliott Cohan
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.
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