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, 1997, through April 30, 1998. 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 totaled $167.8 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,
[Graphic]
Glen R. Johnson
President
June 15, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 40- to 55-day average maturity range over the
reporting period, a neutral stance, and moved within that range according to
relative value opportunities. We continued to employ a barbelled structure for
the portfolio, combining a significant position in seven-day VRDNs with
purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as Treasury
securities. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund on April 30, 1998, was 3.66% compared to
3.25% at the beginning of the reporting period.* The increase in yield was due
in large part to technical factors related to income tax payments by individuals
in April. The latest yield was the equivalent to a 6.38% taxable yield for
investors in the highest federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES SHARES
VOTED WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of the
Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E. Dowd,
Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar, Marjorie
P. Smuts
PORTFOLIO OF INVESTMENTS
ALABAMA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.4%
ALABAMA--94.6%
$ 9,995,000 (b)Alabama HFA, Variable Rate Certificates (Series 1997J) $ 9,995,000
Weekly VRDNs (Bank of America NT and SA, San Francisco LIQ)
3,000,000 Alabama State IDA Weekly VRDNs (Columbus Mills Inc. 3,000,000
Project)/(SunTrust Bank, Atlanta LOC)
1,540,000 Alabama State IDA Weekly VRDNs (Sunshine Homes
Inc.)/(Amsouth 1,540,000 Bank N.A., Birmingham LOC)
7,725,000 Alabama State IDA, IDRB (Series 1994) Weekly VRDNs (Decatur 7,725,000
Aluminum Corp.)/(Star Bank, N.A., Cincinnati LOC)
1,400,000 Alabama State IDA, IDRB Weekly VRDNs (Monarch Tile, Inc. 1,400,000
Project)/(Nationsbank of Texas, N.A. LOC)
3,250,000 Alabama State IDA, IDRB's (Series 1996) Weekly VRDNs (IMI
Cash 3,250,000 Valve Project)/(Regions Bank, Alabama LOC)
3,350,000 Alabama State IDA, Industrial Revenue Bonds Weekly VRDNs 3,350,000
(Kappler USA, Inc. Project)/(National Bank of Canada, Montreal
LOC)
4,600,000 Alabama State Public School & College Authority, 4.10% Bonds, 4,610,880
12/1/1998
5,000,000 Alabama State, UT GO Refunding Bonds, 5.70% Bonds, 9/1/1998 5,030,993
1,570,000 Ashland, AL IDB, (Series 1996) Weekly VRDNs (Tru-Wood 1,570,000
Cabinets)/(Regions Bank, Alabama LOC)
1,155,000 Auburn University, AL, 6.60% Bonds, 6/1/1998 1,157,290
1,060,000 Baldwin County, AL, School Warrants (Series C), 5.10% Bonds 1,061,157
(FSA INS), 6/1/1998
2,000,000 Birmingham, AL IDA Weekly VRDNs (Altec Industries, 2,000,000
Inc.)/(Wachovia Bank of Georgia N.A., Atlanta LOC)
1,615,000 Birmingham, AL IDA Weekly VRDNs (Glasforms, Inc.)/(Regions 1,615,000
Bank, Alabama LOC)
3,000,000 Birmingham, AL IDA, IDRB's (Series 1997) Weekly VRDNs (J. J. & 3,000,000
W, IV, Ltd.)/(Svenska Handelsbanken, Stockholm LOC)
2,335,000 Birmingham, AL IDA, Revenue Bonds (Series 1996) Weekly
VRDNs 2,335,000 (American FireLog Corp.)/(Comerica Bank,
Detroit, MI LOC)
1,050,000 Calhoun County, AL Economic Development Council Weekly VRDNs 1,050,000
(Food Ingredients Tech. Co.)/(Nationsbank, N.A., Charlotte
LOC)
1,900,000 Cullman, AL IDB, IRB's (Series 1992) Weekly VRDNs (Pressac 1,900,000
Holdings PLC)/(NBD Bank, Michigan LOC)
1,100,000 Cullman, AL IDB, Series 1989 Weekly VRDNs (Pressac Inc.)/(NBD 1,100,000
Bank, Michigan LOC)
2,900,000 Cullman, AL IDB, Variable Fixed Rate IDRB Weekly VRDNs 2,900,000
(National Bedding Co.)/(Bank of America Illinois LOC)
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
ALABAMA--CONTINUED
$ 910,000 Decatur, AL IDB, General Obligation Warrants (Series 1997), $ 910,523
4.50% Bonds (MBIA INS), 6/1/1998
1,800,000 Dothan, AL IDB, Adjustable/Fixed Rate IRD's (Series 1997)
1,800,000 Weekly VRDNs (Henderson Steel Erectors)/(Regions
Bank, Alabama LOC)
6,175,000 Fairfield, AL IDA, Variable Rate Environmental Improvement 6,175,000
Revenue Bonds (Series 1995), 3.55% TOBs (USX Corp.)/(Wachovia
Bank of NC, N.A., Winston-Salem LOC), Optional Tender
6/15/1998
1,390,000 Fort Payne, AL IDB, IDRB Weekly VRDNs (Ovalstrapping, 1,390,000
Inc.)/(U.S. Bank, N.A., Minneapolis LOC)
7,400,000 Gadsen, AL IDB, IDRB's (Series 1997) Weekly VRDNs (Chicago 7,400,000
Steel, (Alabama), LLC)/(Lasalle National Bank, Chicago LOC)
5,230,000 Geneva County, AL IDB, Adjustable Fixed Rate IDRB's (Series 5,230,000
1996) Weekly VRDNs (Brooks AG Co., Inc.)/(Regions Bank,
Alabama LOC)
4,000,000 Guntersville, AL IDB, (Series 1995) Weekly VRDNs (Hercules 4,000,000
Rubber Co. Project)/(South Trust Bank of Alabama, Birmingham
LOC)
3,405,000 Hamilton, AL IDB, Variable/Fixed Rate IDRB's Weekly VRDNs 3,405,000
(Tennessee River, Inc.)/(South Trust Bank of Alabama,
Birmingham LOC)
7,000,000 Hoover, AL Board of Education, Warrant Anticipation Notes 7,000,000
(Series 1998-A), 3.80% BANs, 2/1/1999
2,815,000 Hoover, AL IDA Weekly VRDNs (Bud's Best Cookies, 2,815,000
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC)
2,500,000 Huntsville, AL IDA Weekly VRDNs (Giles & Kendall, 2,500,000
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC)
285,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project (Huntsville, 285,000
AL))/(Regions Bank, Alabama LOC)
1,395,000 Ider, AL IDB, Industrial Development Bonds Weekly VRDNs 1,395,000
(Galbreath, Inc. Proj.)/(National Bank of Canada, Montreal
LOC)
1,500,000 Jefferson County, AL, Sewer Revenue Warrants, 7.00% Bonds, 1,515,417
9/1/1998
3,150,000 Lowndes County, AL IDB, (Series 1996) Weekly VRDNs (Warren Oil 3,150,000
Company Project)/(First Union National Bank, Charlotte, NC
LOC)
2,425,000 Mobile, AL Downtown Redevelopment Authority, (Series 1992) 2,425,000
Weekly VRDNs (Mitchell Project)/(SunTrust Bank, Atlanta LOC)
3,000,000 Mobile, AL IDB, (1994 Series A), 3.95% TOBs (International 3,000,000
Paper Co.), Optional Tender 6/1/1998
470,000 Mobile, AL, GO Warrants, 4.75% Bonds, 8/15/1998 470,911
3,000,000 Montgomery - Wynlakes Governmental Utility Services Corp., 3,000,000
Bonds (Series 1995-A) Weekly VRDNs (Vaughn Road, L.L.C.,
Project)/(Amsouth Bank N.A., Birmingham LOC)
2,565,000 Montgomery, AL IDB, (Series 1990-A) Weekly VRDNs
(Industrial 2,565,000 Partners)/(Wachovia Bank of Georgia
N.A., Atlanta LOC)
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
ALABAMA--CONTINUED
$ 3,000,000 Montgomery, AL IDB, IDRB's (Series 1996) Weekly VRDNs (CSC $ 3,000,000
Fabrication, Inc. Project)/(First Union National Bank,
Charlotte, NC LOC)
3,650,000 Montgomery, AL IDB, Industrial Development Revenue Bonds 3,650,000
(Series 1996A) Weekly VRDNs (Jobs Co., L.L.C.
Project)/(Columbus Bank and Trust Co., GA LOC)
7,000,000 Phoenix City, AL IDB, (Series 1988), 3.75% CP (Mead Coated 7,000,000
Board)/(ABN AMRO Bank N.V., Amsterdam LOC), Mandatory Tender
5/7/1998
805,000 Piedmont, AL IDB Weekly VRDNs (Industrial Partners)/(Wachovia 805,000
Bank of Georgia N.A., Atlanta LOC)
3,415,000 Prattville, AL IDB, IDR Bonds Weekly VRDNs (Kuhnash 3,415,000
Properties/Arkay Plastics Project)/(PNC Bank, Ohio, N.A. LOC)
2,700,000 Scottsboro, AL IDB, (Series 1994) Weekly VRDNs (Maples 2,700,000
Industries, Inc.)/(Amsouth Bank N.A., Birmingham LOC)
1,000,000 Scottsboro, AL IDB, IDRB (Series 1991) Weekly VRDNs (Maples 1,000,000
Industries, Inc.)/(Amsouth Bank N.A., Birmingham LOC)
5,000,000 Selma, AL IDB, Annual Tender PCR Refunding Bonds (1993 Series 5,000,000
B), 4.10% TOBs (International Paper Co.), Optional Tender
7/15/1998
1,885,000 Shelby County, AL Board of Education, Special Tax Warrants, 1,895,073
4.375% Bonds (AMBAC INS), 2/1/1999
1,000,000 Sumter County, AL IDA, Industrial Revenue Bonds (Series 1995B) 1,000,000
Weekly VRDNs (Canal Chip Project)/(Regions Bank, Alabama LOC)
1,100,000 Tallassee, AL IDB, (Series 1998) Weekly VRDNs (Milstead
Farm 1,100,000 Group, Inc.)/(Regions Bank, Alabama LOC)
2,500,000 Troy, AL IDB, (Series 1997A) Weekly VRDNs (Hudson 2,500,000
Cos.)/(Amsouth Bank N.A., Birmingham LOC)
1,500,000 Troy, AL IDB, IRB's (Series 1996A) Weekly VRDNs (Hudson
Sauces 1,500,000 & Dressings, Inc.)/ (Amsouth Bank N.A.,
Birmingham LOC)
2,000,000 Tuskegee, AL IDB, IDRB (Series 1995) Weekly VRDNs (Concrete 2,000,000
Company (The))/ (Columbus Bank and Trust Co., GA LOC)
2,245,000 Vincent, AL IDB, (Series 1993) Weekly VRDNs (Ebsco Industries, 2,245,000
Inc.)/(National Australia Bank, Ltd., Melbourne LOC)
&NBSP;&NBSP;&NBSP;&NBSP;TOTAL 158,832,244
PUERTO RICO--4.8%
2,000,000 Commonwealth of Puerto Rico, (Series 1998A), 4.50% TRANs, 2,004,792
7/30/1998
2,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (1983 2,002,275
Series A), 4.00% TOBs (Merck & Co., Inc.), Optional Tender
12/1/1998
1,000,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 1,000,000 1983A), 3.80% TOBs (Reynolds Metals
Co.)/(ABN AMRO Bank N.V., Amsterdam LOC), Optional Tender
9/1/1998
</TABLE>
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--CONTINUED
$ 3,000,000 Puerto Rico Industrial, Medical & Environmental PCA, Pollution $ 3,000,000
Control Facilities Financing Authority (Series 1983 A), 3.75%
TOBs (Schering Plough Corp.)/(Morgan Guaranty Trust Co., New
York LOC), Optional Tender 12/1/1998
TOTAL 8,007,067
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 166,839,311
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 72.4% 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 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, MIG-1, or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and
F-2 by Fitch IBCA 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, 1998, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
FIRST TIER SECOND TIER
95.2% 4.80%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted to
$9,995,000 which represents 6.0% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($167,823,234) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BAN --Bond Anticipation
Note CP --Commercial Paper FSA --Financial Security Assurance GO --General
Obligation HFA --Housing Finance Authority IDA --Industrial Development
Authority IDR --Industrial Development Revenue IDB --Industrial Development Bond
IDRB --Industrial Development Revenue Bond INS --Insured LIQ --Liquidity
Agreement LLC --Limited Liability Corporation LOC --Letter of Credit MBIA
- --Municipal Bond Investors Assurance PCA --Pollution Control Authority PCR
- --Pollution Control Revenue PLC --Public Limited Company 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)
STATEMENT OF ASSETS AND LIABILITIES
ALABAMA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 166,839,311
Cash 421,484
Income receivable 1,054,222
Prepaid expenses 3,944
Deferred organizational costs 1,458
Total assets 168,320,419
LIABILITIES:
Income distribution payable $ 490,189
Accrued expenses 6,996
Total liabilities 497,185
Net Assets for 167,823,234 shares outstanding $ 167,823,234
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$167,823,234 / 167,823,234 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
ALABAMA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,748,076
EXPENSES:
Investment advisory fee $ 497,239
Administrative personnel and services fee 75,002
Custodian fees 6,456
Transfer and dividend disbursing agent fees and expenses 14,024
Directors'/Trustees' fees 1,438
Auditing fees 6,556
Legal fees 4,073
Portfolio accounting fees 26,457
Shareholder services fee 248,619
Share registration costs 12,340
Printing and postage 7,362
Insurance premiums 1,790
Miscellaneous 11,139
Total expenses 912,495
Waivers --
Waiver of investment advisory fee $ (351,212)
Waiver of shareholder services fee (9,945)
Total waivers (361,157)
Net expenses 551,338
Net investment income $ 3,196,738
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
ALABAMA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 3,196,738 $ 7,075,588
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (3,196,738) (7,075,588)
SHARE TRANSACTIONS--
Proceeds from sale of shares 246,405,571 655,080,120
Net asset value of shares issued to shareholders in payment of 1,491,134 4,317,122
distributions declared
Cost of shares redeemed (303,720,682) (669,470,177)
Change in net assets resulting from share transactions (55,823,977) (10,072,935)
Change in net assets (55,823,977) (10,072,935)
NET ASSETS:
Beginning of period 223,647,211 233,720,146
End of period $ 167,823,234 $ 223,647,211
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED APRIL 30,
1998 1997 1996 1995 1994(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 0.04 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.04) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return(b) 1.61% 3.26% 3.22% 3.66% 2.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.55% 0.55% 0.48% 0.36%*
Net investment income 3.21%* 3.21% 3.18% 3.59% 2.67%*
Expense waiver/reimbursement(c) 0.36%* 0.36% 0.37% 0.44% 0.62%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $167,823 $223,647 $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 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)
NOTES TO FINANCIAL STATEMENTS
ALABAMA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Alabama HFA, Variable Rate
Certificates Series (1997-J) 8/14/1997 $9,995,000
DEFERRED EXPENSES
The costs incurred by the Fund with respect to registartion of its shares in its
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.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (with-out par value). At April
30, 1998, capital paid-in aggregated $167,823,234. Transactions in shares were
as follow.
SIX MONTHS ENDED
APRIL 30, 1998 OCTOBER 31, 1997
Shares sold 246,405,571 655,080,120
Shares issued to shareholders in
payment of distributi 1,491,134 4,317,123
Shares redeemed (303,720,682) (669,470,177)
Net change resulting from
share transactions (55,823,977) (10,072,934)
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, Inc. 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 sized, type, and number of accounts and tranactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintain 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 aseets for the period,
plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES
Organizational expenses of $57,711 were borne initially by the Adviser. The Fund
has reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five-year period following the Fund's effective
date. For the period ended April 30, 1998, the Fund expensed $8,673 of
organizational expenses.
INTERFUND TRANSACTION
During the period ended October 31, 1997, the Fund engaged in purchase and sale
transactions with funds that have a common investment adviser (or affliated
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 $157,470,000 and $185,139,670,
repectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 74.7% 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 7.30% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
[Graphic]
Alabama Municipal Cash Trust
Semi-Annual Report to Shareholders April 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229790
G01120-01 (6/98)
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, 1997 through April 30, 1998. 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 $317.1 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
Q. What are your comments on the economy and the interest rate environment
during the fund's six-month reporting period?
A. The economy remained robust over the reporting period, posting a rate of
growth over 3.00% in the fourth quarter of 1997 and continued its above average
growth into the first quarter of 1998 posting a 4.80% growth rate. At the same
time, overall inflationary pressures remained somewhat tame in spite of the
impressive performance from the economy and historically low unemployment
numbers. Tight labor markets with consequences of wage inflation continued to
occupy the thoughts of the Federal Reserve Board ("the Fed") throughout much of
the reporting period. However, the reporting period coincided with the
realization of an unsteady economic picture in the Pacific Rim. The Asian crisis
and unsteady world stock markets most likely eliminated any rate tightening
intentions the Fed may have had during the fourth quarter of 1997. The Fed
policy continued to remain on hold for much of the first quarter of 1998, with
economic indicators giving somewhat mixed signals. Labor markets continued to
show signs of strength with unemployment at or near historical lows. The key
concern for the Fed in the first quarter and going forward into 1998 is whether
the Asian crisis can sufficiently cool any overheating condition within the U.S.
economy. Signs that the Fed is positioned to act quickly appeared at the end of
the reporting period. The first quarter of 1998 ended with the Fed shifting bias
from a neutral to a tightening stance. The reason for the more hawkish stance is
that the Fed is clearly concerned with sustained growth in gross domestic
product in the 4.00% range. Short-term interest rates traded within a rather
narrow range during the reporting period. Movements in the 1-year Treasury bill
("T-bill")over the reporting period best reveal the market's shifting sentiment.
The 1-year T-bill traded in the 5.50% range during November and December of
1997, steadily fell to the 5.30% range by January through March of 1998, and
ended the reporting period at the 5.40% level.
In addition to economic fundamentals, short-term municipal securities were
strongly influenced by technical factors over this reporting period, notably
calendar year end and income tax payment season. Variable rate demand notes
("VRDNs"), which comprise more than 50% of the fund's assets, started the
reporting period in the 3.80% range, but moved sharply higher in December to
above the 4.00% level as supply and demand imbalances occurred. Yields then
declined in January, as coupon payments looked to reinvest and year end selling
pressures eased, VRDNs yields fell drastically ending the reporting period below
where they began, to the 3.30% range. Yields only averaged a little over 3.10%
during February and March before rising to the 4.00% range in April due to
traditional tax season selling pressures. Over the six-month reporting period,
VRDN yields averaged roughly 66% of taxable rates making them attractive for
investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 53 days. The fund remained in a 45- to 55-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continued to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, the portfolio attempted to
maximize performance through ongoing relative value analysis. Relative value
analysis included the comparison of the richness or cheapness of municipal
securities to one another as well as municipals to taxable instruments, such as
Treasury securities. This portfolio structure continued to provide a competitive
yield over time.
Q.How did the fund's yield react during the reporting period?
A. The seven-day net yield for the fund's Institutional Service Shares on April
30, 1998 was 3.56%* compared to 3.18% at the beginning of the reporting period.
The latest yield was the equivalent of a 5.89% taxable yield for investors in
the highest federal tax bracket. The seven-day net yield for the fund's
Institutional Shares on April 30, 1998 was 3.81%* compared to 3.43% at the
beginning of the reporting period. The latest yield was the equivalent of a
6.30% taxable yield for investors in the highest federal tax bracket. The
increases in yields came at the end of the reporting period due in large part to
technical factors relating to tax payment season.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second quarter of 1998, and if the drag on the
U.S. economy is not as great as once feared, expectations of a need for Fed
tightening may then resurface. In the near term, market movements will likely
reflect technical as well as fundamental factors. These supply/demand imbalances
could very well present attractive investment opportunities for the fund. We
will continue to watch, with great interest, market developments in order to
best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES SHARES
VOTED WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
CALIFORNIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.4%
CALIFORNIA--85.5%
$ 5,600,000 ABAG Finance Authority for Non-Profit Corporations, (Series $ 5,600,000
1998) Weekly VRDNs (The Harker School Foundation)/(U.S. Bank,
N.A., Minneapolis LOC)
2,500,000 California Educational Facilities Authority, (Series 1997B), 2,502,557
4.125% TOBs (University of Southern California), Mandatory
Tender 10/1/1998
9,095,000 California Educational Facilities Authority, PA-190 Weekly 9,095,000
VRDNs (Stanford University)/ (Merrill Lynch Capital Services,
Inc. LIQ)
2,300,000 California HFA, Home Mortgage (Series 1989F), 3.55% TOBs 2,300,000
(Citibank N.A., New York LIQ), Optional Tender 8/1/1998
1,100,000 California Health Facilities Financing Authority Weekly VRDNs 1,100,000
(FGIC INS)/(Morgan Guaranty Trust Co., New York LIQ)
6,000,000 California Health Facilities Financing Authority, (Series 6,000,000
1985B) Weekly VRDNs (Scripps Memorial Hospitals)/(MBIA
INS)/(Morgan Guaranty Trust Co., New York LIQ)
1,250,000 California Health Facilities Financing Authority, 7.625% 1,292,727
Bonds (United States Treasury PRF), 10/1/1998 (@102)
3,200,000 California PCFA, (Series 1984A) Weekly VRDNs (Homestate 3,200,000
Mining Co.)/(Bank of Nova Scotia, Toronto LOC)
8,000,000 California Public Capital Improvements Financing Authority, 8,000,000
Trust Receipts (Series 1996 FR-3) Weekly VRDNs (MBIA
INS)/(Bank of New York, New York LIQ)
4,285,000 California State, 4.50% RANs, 6/30/1998 4,290,331
4,900,000 California State, CDC Municipal Products, Inc. (Series 1996L) 4,900,000
Weekly VRDNs (FGIC INS)/(CDC Municipal Products, Inc. LIQ)
4,500,000 California State, GO Tax Exempt Notes, 3.60% CP (Bayerische 4,500,000
Landesbank Girozentrale, Credit Suisse First Boston,
Landesbank Hessen-Thueringen, Frankfurt, Morgan Guaranty
Trust Co., New York and Westdeutsche Landesbank Girozentrale
LIQs), Mandatory Tender 6/12/1998
5,000,000 California State, GO Tax Exempt Notes, 3.60% CP (Bayerische 5,000,000
Landesbank Girozentrale, Credit Suisse First Boston,
Landesbank Hessen-Thueringen, Frankfurt, Morgan Guaranty
Trust Co., New York and Westdeutsche Landesbank Girozentrale
LIQs), Mandatory Tender 6/18/1998
10,000,000 California State, GO Tax Exempt Notes, 3.60% CP (Bayerische 10,000,000
Landesbank Girozentrale, Credit Suisse First Boston,
Landesbank Hessen-Thueringen, Frankfurt, Morgan Guaranty
Trust Co., New York and Westdeutsche Landesbank Girozentrale
LIQs), Mandatory Tender 6/23/1998
8,000,000 California State, Tender Option Certificates (Series 1998A) 8,000,000
Weekly VRDNs (MBIA INS)/(First National Bank of Chicago LIQ)
3,000,000 California Statewide Communities Development Authority Weekly 3,000,000
VRDNs (Memorial Health Services)/(ABN AMRO Bank N.V.,
Amsterdam LIQ)
3,100,000 California Statewide Communities Development Authority, 3,100,000
(Series A) Weekly VRDNs (Barton Memorial Hospital)/(Banque
Nationale de Paris LOC)
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
CALIFORNIA--CONTINUED
$ 7,000,000 California Transit Finance Authority, VRDB's (Series 1997) $ 7,000,000
Weekly VRDNs (FSA INS)/(Credit Suisse First Boston LIQ)
5,800,000 Central Unified School District, CA, Certificates of 5,800,000
Participation (1995 Financing Project) Weekly VRDNs (Union
Bank of California LOC)
4,000,000 Central Valley Schools, CA Financing Authorithy, 4.50% TRANs, 4,007,524
8/27/1998
4,000,000 (b)Clipper CA Tax-Exempt Trust, (1996 Issue A) Weekly VRDNs 4,000,000
(California Rural Home Mortgage Finance Authority)/(MBIA
INS)/(State Street Bank and Trust Co. LIQ)
5,200,000 Contra Costa, CA Water District, (Series A), 3.50% CP 5,200,000
(Westdeutsche Landesbank Girozentrale LIQ), Mandatory Tender
5/26/1998
1,900,000 East Bay Municipal Utility District, CA, 3.50% CP 1,900,000
(Westdeutsche Landesbank Girozentrale LIQ), Mandatory Tender
5/14/1998
2,000,000 El Cerrito, CA, 4.25% TRANs, 6/30/1998 2,001,111
7,100,000 Glendale, CA, (Series 1984A) Monthly VRDNs (Reliance 7,100,000
Development Co., Inc.)/(Barclays Bank PLC, London LOC)
1,600,000 Loomis, CA Union Elementary School District, 4.45% TRANs, 1,603,083
9/10/1998
10,000,000 Los Angeles County, CA Metropolitan Transportation Authority, 10,000,000
Municipal Securities Trust Receipts (Series 1998-CMC2) Weekly
VRDNs (AMBAC INS)/(Chase Manhattan Corp. LIQ)
15,650,000 Los Angeles County, CA, 4.50% TRANs, 6/30/1998 15,666,986
1,600,000 Los Angeles, CA Department of Water & Power, 9.00% Bonds, 1,658,577
1/15/1999
12,500,000 Los Angeles, CA Department of Water & Power, Trust Receipts 12,500,000
(Series 1998 FR/RI-18) Weekly VRDNs (FGIC INS)/(Bank of New
York, New York LIQ)
4,000,000 Los Angeles, CA Wastewater System, 3.40% CP (Morgan Guaranty 4,000,000
Trust Co., New York and Union Bank of Switzerland, Zurich
LOCs), Mandatory Tender 6/10/1998
7,875,000 Los Angeles, CA Wastewater System, 3.45% CP (Morgan Guaranty 7,875,000
Trust Co., New York and Union Bank of Switzerland, Zurich
LOCs), Mandatory Tender 7/9/1998
5,060,000 Metropolitan Water District, Southern California Waterworks, 5,068,868
5.00% Bonds, 7/1/1998
5,000,000 Metropolitan Water District, Southern California Waterworks, 5,000,000
Water Revenue Bonds (Series C) Weekly VRDNs (Bank of America
NT and SA, San Francisco LIQ)
2,000,000 Monterey Peninsula, CA Water Management District Weekly VRDNs 2,000,000
(Wastewater Reclaimation)/(Sumitomo Bank Ltd., Osaka LOC)
5,000,000 Oakland, CA Unified School District, 4.25% TRANs, 10/28/1998 5,009,548
6,000,000 Oceanside, CA Community Development Commission, (Series 1985) 6,000,000
Weekly VRDNs (Shadow Way Apartments)/(Bank One, Arizona N.A.
LOC)
7,800,000 Orange County, CA Housing Authority, Variable Rate Demand 7,800,000
Apartment Development Revenue Bonds, (Series BB of 1985)
Weekly VRDNs (Costa Mesa Partners)/(Chase Manhattan Bank
N.A., New York LOC)
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
CALIFORNIA--CONTINUED
$ 7,400,000 Orange County, CA IDA, (Series 1985B - Niguel Summit II) $ 7,400,000
Weekly VRDNs (Hon Development Corp.)/(Bank of America NT and
SA, San Francisco LOC)
2,600,000 Orange County, CA Local Transportation Authority, Trust 2,600,000
Receipts (Series FR 1997-8) Weekly VRDNs (FGIC INS)/(Bank of
New York, New York LIQ)
10,330,000 (b)Oxnard Harbor District, CA, (Series 1995 II), PT-105,
10,330,000 3.85% TOBs (Asset Guaranty INS)/(Credit Suisse
First Boston LIQ), Mandatory Tender 12/10/1998
13,250,000 (b)Pitney Bowes Credit Corp. Leasetops Trust, Leasetops 13,250,000
Certificates (Series 1996A) Weekly VRDNs (San Diego County,
CA, Regional Communications System)/(Pitney Bowes Credit
Corp. LIQ)/(Bayerische Landesbank Girozentrale LOC)
1,570,000 Placer County, CA Office of Education, 4.45% TRANs,
9/10/1998 1,573,022 1,025,000 Placer Hills, CA Union Elementary
School District, 4.45% 1,026,974
TRANs, 9/10/1998
8,000,000 Regents of University of California, (Series A), 3.80% CP 8,000,000
(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 7/22/1998
747,000 Riverside County, CA, (Series A) Weekly VRDNs (Riverside, CA 747,000
Public Facility Finance)/ (Commerzbank AG, Frankfurt and
National Westminster Bank, PLC, London LOCs)
3,000,000 Riverside County, CA, 4.50% TRANs, 6/30/1998 3,002,649
900,000 Roseville, CA, Hospital Facilities Authority, (Series 1989A) 900,000
Weekly VRDNs (Toronto-Dominion Bank LOC)
1,700,000 San Bernardino County, CA, (Series 1985) Weekly VRDNs 1,700,000
(Woodview Apartments)/(Swiss Bank Corp., Basle LOC)
3,215,000 San Francisco, CA Redevelopment Finance Agency, (PT-125) 3,215,000
Weekly VRDNs (Northridge Cooperative Homes)/(MBIA
INS)/(Merrill Lynch Capital Services, Inc. LIQ)
1,500,000 San Francisco, CA Redevelopment Finance Agency, (Series B1) 1,500,000
Weekly VRDNs (Fillmore Center)/(Bank of Nova Scotia, Toronto
LOC)
4,065,000 San Francisco, CA Redevelopment Finance Agency, CDC
Municipal 4,065,000 Products, Inc. (Series 1997T) Weekly
VRDNs (Northridge Cooperative Homes)/(MBIA INS)/(CDC
Municipal Products, Inc.
LIQ)
2,835,000 San Francisco, CA State Building Authority, MERLOTS (Series 2,835,000
1997E) Weekly VRDNs (San Francisco Civic Center
Complex)/(AMBAC INS)/(Corestates Bank N.A., Philadelphia, PA
LIQ)
2,500,000 Sanger, CA Unified School District, 4.00% TRANs, 1/27/1999
2,508,998 400,000 Santa Clara, CA, (Series 1985C) Weekly VRDNs
(Santa Clara, CA 400,000
Electric System)/(National Westminster Bank, PLC, London LOC)
325,000 Stockton, CA, (Series 1993) Weekly VRDNs (La Quinta Inns, 325,000
Inc.)/(Nationsbank of Texas, N.A. LOC)
2,700,000 Vallecitos, CA Water District, Water Revenue Certificates of 2,700,000
Participation Weekly VRDNs (Twin Oaks Reservoir)/(Credit
Local de France LOC)
TOTAL 271,149,955
</TABLE>
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--13.9%
$ 4,000,000 Commonwealth of Puerto Rico, (Series 1992A) P-Floats PT-140, $ 4,000,000
3.65% TOBs (FSA INS)/ (Commerzbank AG, Frankfurt LIQ),
Mandatory Tender 1/14/1999
11,000,000 Commonwealth of Puerto Rico, (Series 1998A), 4.50% TRANs, 11,026,311
7/30/1998
9,750,000 Commonwealth of Puerto Rico, Floating Rate Trust Receipts 9,750,000
(Series 1997) Weekly VRDNs (Commerzbank AG, Frankfurt
LIQ)/(Commerzbank AG, Frankfurt LOC)
2,040,000 Government Development Bank for Puerto Rico (GDB), 3.45% CP, 2,040,000
Mandatory Tender 7/9/1998
11,190,000 Puerto Rico Electric Power Authority, MERLOTS (Series 1997S) 11,190,000
Weekly VRDNs (MBIA INS)/ (Corestates Bank N.A., Philadelphia,
PA LIQ)
5,000,000 Puerto Rico Highway and Transportation Authority, (Series A) 5,000,000
Weekly VRDNs (AMBAC INS)/ (Bank of Nova Scotia, Toronto LIQ)
1,115,000 Puerto Rico Industrial, Medical & Environmental PCA, (1983 1,116,266
Series A), 4.00% TOBs (Merck & Co., Inc.), Optional Tender
12/1/1998
TOTAL 44,122,577
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 315,272,532
</TABLE>
(a) The fund may only invest in securities rated in one of the two highest
short-term rating categories 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, MIG-1 or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and F-2
by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING 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, 1998, these securities amounted to
$27,580,000 which represents 8.7% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($317,120,781) at April 30, 1998.
The following acronyms are used throughout this portfolio: AMBAC --American
Municipal Bond Assurance Corporation CP --Commercial Paper FGIC --Financial
Guaranty Insurance Company FSA --Financial Security Assurance GO --General
Obligation HFA --Housing Finance Authority IDA --Industrial Development
Authority INS --Insured LIQ --Liquidity Agreement LOCs --Letter(s) of Credit LOC
- --Letter of Credit MBIA --Municipal Bond Investors Assurance MERLOTS --Municipal
Exempt Receipts-Liquidity Option Tender Series PCA --Pollution Control Authority
PCFA --Pollution Control Finance Authority PLC --Public Limited Company PRF
- --Prerefunded RANs --Revenue Anticipation Notes TOBs --Tender Option Bonds TRANs
- --Tax and Revenue Anticipation Notes VRDB --Variable Rate Demand Bond VRDNs
- --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
CALIFORNIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 315,272,532
Income receivable 3,341,866
Prepaid expenses 8,824
Total assets 318,623,222
LIABILITIES:
Income distribution payable $ 930,995
Payable to Bank 524,622
Accrued expenses 44,324
Total liabilities 1,499,941
Net Assets for 317,123,281 shares outstanding $ 317,123,281
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$278,898,796 / 278,897,513 shares outstanding $1.00
INSTITUTIONAL SHARES:
$38,224,485 / 38,225,768 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
CALIFORNIA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 5,727,466
EXPENSES:
Investment advisory fee $ 811,327
Administrative personnel and services fee 122,371
Custodian fees 5,957
Transfer and dividend disbursing agent fees and expenses 51,303
Directors'/Trustees' fees 935
Auditing fees 6,486
Legal fees 3,589
Portfolio accounting fees 42,975
Shareholder services fee--Institutional Service Shares 352,441
Shareholder services fee--Institutional Shares 53,269
Share registration costs 17,743
Printing and postage 7,361
Insurance premiums 5,382
Miscellaneous 2,472
Total expenses 1,483,611
Waivers --
Waiver of investment advisory fee $ (665,099)
Waiver of shareholder services fee--Institutional Shares (53,268)
Total waivers (718,367)
Net expenses 765,244
Net investment income $ 4,962,222
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
CALIFORNIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 4,962,222 $ 6,655,913
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (4,261,574) (5,624,269)
Institutional Shares (700,648) (1,031,644)
Change in net assets resulting from distributions to (4,962,222) (6,655,913)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 695,760,294 905,107,252
Net asset value of shares issued to shareholders in payment of 2,078,651 3,335,040
distributions declared
Cost of shares redeemed (657,435,831) (783,969,559)
Change in net assets resulting from share transactions 40,403,114 124,472,733
Change in net assets 40,403,114 124,472,733
NET ASSETS:
Beginning of period 276,720,167 152,247,434
End of period $ 317,123,281 $ 276,720,167
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD YEAR
(UNAUDITED) ENDED ENDED
APRIL 30, YEAR ENDED OCTOBER 31, OCTOBER 31, SEPTMBER, 30
1998 1997 1996 1995 1994(A) 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.002 0.02
Net realized loss on investment -- -- -- (0.01) -- --
Total from investment operations 0.02 0.03 0.03 0.02 0.002 0.02
CAPITAL CONTRIBUTIONS -- -- -- 0.01 -- --
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.002) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.52% 3.19% 3.22% 3.37% 0.23% 2.07%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.50%* 0.46% 0.49% 0.59% 0.59%* 0.58%
Net investment income 3.02%* 3.13% 3.17% 3.33% 2.71%* 2.03%
Expense waiver/reimbursement(c) 0.41%* 0.49% 0.62% 0.50% 0.44%* 0.40%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $278,899 $234,764 $132,159 $96,534 $81,563 $74,707
</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) 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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, OCTOBER 31,
1998 1997 1996(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 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.65% 3.44% 2.24%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.25%* 0.21% 0.20%*
Net investment income 3.29%* 3.45% 3.33%*
Expense waiver/reimbursement(c) 0.66%* 0.74% 0.90%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $38,224 $41,956 $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)
NOTES TO FINANCIAL STATEMENTS
CALIFORNIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 stabiltiy of principal.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Clipper CA Tax-Exempt Trust 3/15/1996 $ 4,000,000
Oxnard Harbor District, CA 8/1/1997 10,330,000
Pitney Bowes Credit Corp. Leasetops Trust 2/3/1997 13,250,000
</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.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares.
Transactions in shares were as follows:
<TABLE>
Six-Months
Ended Year Ended
Institutional Service Shares April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 638,606,645 809,738,300
Shares issued to shareholders in payment of 2,069,926 3,272,742
distributions declared
Shares redeemed (596,543,431) (710,405,505)
Net change resulting from Institutional
Share transactions Service 44,133,140 102,605,537
<CAPTION>
Six-Months
Ended Year Ended
Institutional Shares April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 57,153,649 95,368,952
Shares issued to shareholders in payment of 8,725 62,298
distributions declared
Shares redeemed (60,892,400) (73,564,054)
Net change resulting from Institutional Share (3,730,026) 21,867,196
transactions
Net change resulting from Share transactions 40,403,114 124,472,733
</TABLE>
At April 30, 1998, capital paid-in aggregated $317,120,781.
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, Inc. 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, 1998, 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 $216,050,000 and $219,690,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 62.0% 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 14.0% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and admininstrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps willl be
sufficient to avoid any adverse impact to the fund.
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
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
Anthony R. Bosch
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.
California
Municipal
Cash Trust
Semi-Annual Report
to Shareholders
April 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229675
Cusip 314229766
0041609 (6/98)
[Graphic]
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, 1997, through April 30, 1998. 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 investment 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 total net assets totaled $299.3 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
AN INTERVIEW WITH THE FUND'S PORTFOLIO MANAGER, MIKE SIRIANNI, ASSISTANT
VICE PRESIDENT, FEDERATED MANAGEMENT
Q. What are your comments on the economy and the interest rate environment
during the fund's six-month reporting period?
A. The economy remained robust over the reporting period, posting a rate of
growth over 3.00% in the fourth quarter of 1997 and continued its above average
growth into the first quarter of 1998 posting a 4.80% growth rate. At the same
time, overall inflationary pressures remained somewhat tame in spite of the
impressive performance from the economy and historically low unemployment
numbers. Tight labor markets with consequences of wage inflation continued to
occupy the thoughts of the Federal Reserve Board (the "Fed") throughout much of
the reporting period. However, the reporting period coincided with the
realization of an unsteady economic picture in the Pacific Rim. The Asian crisis
and unsteady world stock markets most likely eliminated any rate tightening
intentions the Fed may have had during the fourth quarter of 1997. The Fed
policy continued to remain on hold for much of the first quarter of 1998, with
economic indicators giving somewhat mixed signals. Labor markets continued to
show signs of strength with unemployment at or near historical lows. The key
concern for the Fed in the first quarter and going forward into 1998 is whether
the Asian crisis can sufficiently cool any overheating condition within the U.S.
economy. Signs that the Fed is positioned to act quickly appeared at the end of
the reporting period. The first quarter of 1998 ended with the Fed shifting bias
from a neutral to a tightening stance. The reason for the more hawkish stance is
that the Fed is clearly concerned with sustained growth in gross domestic
product in the 4.00% range. Short-term interest rates traded within a rather
narrow range during the reporting period. Movements in the 1-year Treasury bill
("T-bill") over the reporting period best reveal the market's shifting
sentiment. The 1-year T-Bill traded in the 5.50% range during November and
December of 1997, steadily fell to the 5.30% range by January through March of
1998, and ended the reporting period at the 5.40% level.
In addition to economic fundamentals, short-term municipal securities were
strongly influenced by technical factors over this reporting period, notably
calendar year end and income tax payment season. Variable rate demand notes
("VRDNs"), which comprise more than 50% of the fund's assets, started the
reporting period in the 3.80% range, but moved sharply higher in December to
above the 4.00% level as supply and demand imbalances occurred. Yields then
declined in January, as coupon payments looked to reinvest and year end selling
pressures eased, VRDN yields fell drastically ending the reporting period below
where they began, to the 3.30% range. Yields only averaged a little over 3.10%
during February and March before rising to the 4.00% range in April due to
traditional tax season selling pressures. Over the six-month reporting period,
VRDN yields averaged roughly 66% of taxable rates making them attractive for
investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 56 days. The fund remained in a 55 to 60-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continued to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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. This portfolio structure continued to pursue a competitive yield
over time.
Q. How did the fund's yield react during the reporting period?
A. The seven-day net yield for the fund on April 30, 1998, was 3.38%* compared
to 3.05% at the beginning of the reporting period with the increase in yield
coming at the end of the reporting period due in large part to technical factors
relating to tax payment season. The latest yield was the equivalent of a 6.05%
taxable yield for investors in the highest federal tax bracket.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second quarter, and if the drag on the U.S.
economy is not as great as once feared, expectations of a need for Fed
tightening may then resurface. In the near term, market movements will likely
reflect technical as well as fundamental factors. These supply/demand imbalances
could very well present attractive investment opportunities for the fund. We
will continue to watch, with great interest, market developments in order to
best serve our municipal clients.
* 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. Yields quoted for money market funds most
closely reflect the fund's current earnings.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM 1: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
On February 24, 1998, the record date for shareholders of Connecticut Municipal
Trust (the "Fund") voting at the meeting, there were 328,572,491 total
outstanding shares. The following items were considered by shareholders of the
Fund and the results of their voting were as follows:
AGENDA ITEM 2: To approve or disapprove an amendment in the Fund's
fundamental investment policy on diversification of its investments.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON-VOTE
198,347,955 554,414 3,629,630 76,569
AGENDA ITEM 3: To approve or disapprove amending and changing from a fundamental
to an operating policy the Fund's ability to invest in restricted securities.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON-VOTE
197,352,874 1,011,089 4,168,037 76,568
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
CONNECTICUT MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.6%
CONNECTICUT--91.2%
$ 11,053,371 (c)Clipper Connecticut Tax Exempt Trust, (Series 1994-1) $ 11,053,371
Weekly VRDNs (State Street Bank and Trust Co. LIQ)
2,160,000 Connecticut Development Authority Weekly VRDNs (Banta 2,160,000
Associates)/(Marine Midland Bank N.A., Buffalo, NY LOC)
500,000 Connecticut Development Authority Weekly VRDNs (Capital 500,000
District Energy Center)/ (Canadian Imperial Bank of Commerce,
Toronto LOC)
3,500,000 Connecticut Development Authority Weekly VRDNs (Capital 3,500,000
District Energy Center)/ (Canadian Imperial Bank of Commerce,
Toronto LOC)
1,099,000 Connecticut Development Authority Weekly VRDNs (RSA 1,099,000
Corp.)/(Barclays Bank PLC, London LOC)
830,000 Connecticut Development Authority, (Series 1985) Weekly VRDNs 830,000
(Martin-Brower Company Project)/(ABN AMRO Bank N.V.,
Amsterdam LOC)
2,200,000 Connecticut Development Authority, (Series 1986) Weekly VRDNs 2,200,000
(United Illuminating Co.)/ (Union Bank of Switzerland, Zurich
LOC)
2,300,000 Connecticut Development Authority, (Series 1993) Weekly VRDNs 2,300,000
(Rand-Whitney Containerboard Limited Parntership)/(Chase
Manhattan Bank N.A., New York LOC)
10,500,000 Connecticut Development Authority, (Series 1996A) Weekly 10,500,000
VRDNs (Connecticut Light & Power Co.)/(AMBAC INS)/(Societe
Generale, Paris LIQ)
2,650,000 Connecticut Development Authority, (Series 1997) Weekly VRDNs 2,650,000
(Porcelen Ltd., CT LLC)/ (Star Bank, N.A., Cincinnati LOC)
7,600,000 Connecticut Development Authority, (Series 1997A) Weekly 7,600,000
VRDNs (Bradley Airport Hotel Project)/(Kredietbank N.V.,
Brussels LOC)
7,000,000 Connecticut Development Authority, (Series A) Weekly VRDNs 7,000,000
(Exeter Energy)/(Sanwa Bank Ltd., Osaka LOC)
1,000,000 Connecticut Development Authority, (Series B) Weekly VRDNs 1,000,000
(Exeter Energy)/(Sanwa Bank Ltd., Osaka LOC)
7,499,000 Connecticut Development Authority, (Series C) Weekly VRDNs 7,499,000
(Exeter Energy)/(Sanwa Bank Ltd., Osaka LOC)
5,200,000 Connecticut Development Authority, PCR (Series 1993A) Weekly 5,200,000
VRDNs (Western Mass Electric Co.)/(Union Bank of Switzerland,
Zurich LOC)
7,500,000 Connecticut Development Authority, PCR Refunding Bonds 7,500,000
(Series 1993B) Weekly VRDNs (Connecticut Light & Power
Co.)/(Union Bank of Switzerland, Zurich LOC)
2,405,000 Connecticut Development Health Care Facilities Weekly VRDNs 2,405,000
(Independence Living)/ (Chase Manhattan Bank N.A., New York
LOC)
8,900,000 Connecticut Development Health Care Facilities Weekly VRDNs 8,900,000
(Independence Living)/ (Credit Local de France LOC)
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
CONNECTICUT--CONTINUED
$ 4,500,000 Connecticut Municipal Electric Energy Cooperative, Power $ 4,500,000
Supply System Revenue Bonds (1995 Series A), 3.45% CP (Fleet
National Bank, Springfield, MA LOC), Mandatory Tender
5/20/1998
4,500,000 Connecticut Municipal Electric Energy Cooperative, Power 4,500,000
Supply System Revenue Bonds (1995 Series A), 3.45% CP (Fleet
National Bank, Springfield, MA LOC), Mandatory Tender
5/22/1998
5,600,000 Connecticut State HEFA Weekly VRDNs (Charlotte Hungerfield 5,600,000
Hospital)/(BankBoston, N.A. LOC)
3,300,000 Connecticut State HEFA, (Series A) Weekly VRDNs (Forman 3,300,000
School Issue)/(National Westminster Bank, PLC, London LOC)
1,000,000 Connecticut State HEFA, (Series B) Weekly VRDNs 1,000,000
(Edgehill)/(Banque Paribas, Paris LOC)
11,500,000 Connecticut State HEFA, (Series J) Weekly VRDNs (Hospital of 11,500,000
Saint Raphael)/ (Kredietbank N.V., Brussels LOC)
2,000,000 Connecticut State HEFA, (Series K) Weekly VRDNs (Hospital of 2,000,000
Saint Raphael)/ (Kredietbank N.V., Brussels LOC)
1,000,000 Connecticut State HEFA, Revenue Bonds (Series A) Weekly VRDNs 1,000,000
(Pomfret School Issue)/ (Credit Local de France LOC)
1,000,000 Connecticut State HEFA, Series A Weekly VRDNs (Sharon 1,000,000
Hospital)/(BankBoston, N.A. LOC)
5,000,000 Connecticut State HEFA, Series S, 3.30% CP (Yale University), 5,000,000
Mandatory Tender 6/9/1998
2,000,000 Connecticut State HEFA, Series S, 3.35% CP (Yale University), 2,000,000
Mandatory Tender 5/12/1998
5,000,000 Connecticut State HEFA, Series S, 3.50% CP (Yale University), 5,000,000
Mandatory Tender 5/21/1998
7,000,000 Connecticut State HEFA, Series S, 3.55% CP (Yale University), 7,000,000
Mandatory Tender 6/22/1998
7,025,000 Connecticut State HFA, (Series 1990C), 3.50% CP (Morgan 7,025,000
Guaranty Trust Co., New York LIQ), Mandatory Tender 7/15/1998
2,795,000 Connecticut State HFA, (Series 1990D), 3.55% CP (Morgan 2,795,000
Guaranty Trust Co., New York LIQ), Mandatory Tender 6/11/1998
3,245,000 Connecticut State HFA, (Series 1990D), 3.80% CP (Morgan 3,245,000
Guaranty Trust Co., New York LIQ), Mandatory Tender 5/15/1998
4,565,000 (c)Connecticut State HFA, PT-1003 Weekly VRDNs (Merrill Lynch 4,565,000
Capital Services, Inc. LIQ)
2,100,000 (c)Connecticut State HFA, Trust Receipts (Series 1998 2,100,000
FR/RI-A4) Weekly VRDNs (Bayerische Hypotheken-Und
Wechsel-Bank AG LIQ)
2,000,000 Connecticut State, (Series A), 6.00% Bonds, 3/1/1999 2,038,963
7,000,000 Connecticut State, Special Assessment Second Injury Fund, 7,000,000
3.45% CP (Caisse Nationale De Credit Agricole, Paris and
Credit Communal de Belgique, Brussles LIQs), Mandatory Tender
5/14/1998
8,700,000 Connecticut State, Special Assessment Second Injury Fund, 8,700,000
3.60% CP (Caisse Nationale De Credit Agricole, Paris and
Credit Communal de Belgique, Brussles LIQs), Mandatory Tender
7/23/1998
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
CONNECTICUT--CONTINUED
$ 5,000,000 Connecticut State, Special Assessment Second Injury Fund, $ 5,000,000
3.70% CP (Caisse Nationale De Credit Agricole, Paris and
Credit Communal de Belgique, Brussles LIQs), Mandatory Tender
7/13/1998
3,000,000 Connecticut State, Special Assessment Second Injury Fund, 3,000,000
3.85% CP (Caisse Nationale De Credit Agricole, Paris and
Credit Communal de Belgique, Brussles LIQs), Mandatory Tender
7/23/1998
12,000,000 Connecticut State, Special Assessment Unemployment 12,000,000
Compensation Advance Fund, Revenue Bonds (Series 1993C),
3.90% TOBs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ),
Mandatory Tender 7/1/1998
4,400,000 Connecticut State, UT GO, 4.00% Bonds, 3/15/1999 4,411,100
1,080,000 Fairfield, CT, 6.00% Bonds, 1/1/1999 1,095,854
1,805,000 Haddam, CT, 3.85% Bonds (AMBAC INS), 7/15/1998 1,805,000
8,556,000 Hamden, CT, 4.00% BANs, 8/14/1998 8,560,739
11,900,000 Hartford, CT Redevelopment Authority Weekly VRDNs
(Underwood 11,900,000 Towers)/(FSA INS)/ (Barclays Bank
PLC, London LIQ)
700,000 Hartford, CT, 4.00% BANs, 1/28/1999 701,505
6,950,000 Meriden, CT, (Lot B), 4.00% BANs, 8/12/1998 6,953,383
1,775,000 Meriden, CT, (Series A), 4.00% BANs, 8/12/1998 1,777,081
8,500,000 New Britain, CT, 3.70% BANs, 4/13/1999 8,509,609
1,500,000 New Haven, CT Weekly VRDNs (Starter Sportswear)/(Fleet Bank 1,500,000
N.A. LOC)
815,000 North Haven, CT, 5.50% Bonds, 9/1/1998 819,325
585,000 Orange, CT, UT GO, 3.80% BANs, 8/20/1998 585,172
1,800,000 Shelton, CT Housing Authority, (Series 1998) Weekly VRDNs 1,800,000
(Crosby Commons)/(First Union National Bank, North LOC)
798,000 Southeastern CT Water Authorithy, 3.70% BANs (Connecticut 798,338
State GTD), 3/18/1999
7,500,000 Stamford, CT Housing Authority, Multi-Modal Interchangeable 7,500,000
Rate Revenue Bonds (Series 1994) Weekly VRDNs (Morgan Street
Project)/(Deutsche Bank, AG LOC)
5,100,000 Thomaston, CT, 3.70% BANs, 9/23/1998 5,100,583
9,120,000 Trumbull, CT, 3.50% BANs, 8/12/1998 9,120,463
4,750,000 Watertown, CT, 3.50% BANs, 9/22/1998 4,752,183
500,000 Wolcott, CT, 4.00% BANs, 8/12/1998 500,431
Total 272,956,100
PUERTO RICO--8.4%
9,791,598 (c)Commonwealth of Puerto Rico Municipal Revenues Collection 9,791,598
Center, 1997A Lease Trust Weekly VRDNs (ABN AMRO Bank N.V.,
Amsterdam LIQ)/(State Street Bank and Trust Co. LOC)
3,000,000 (c)Commonwealth of Puerto Rico, (Series 1992A) P-Floats 3,000,000
PT-140, 3.65% TOBs (FSA INS)/ (Commerzbank AG, Frankfurt
LIQ), Mandatory Tender 1/14/1999
</TABLE>
CONNECTICUT MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
CONNECTICUT--CONTINUED
$ 5,000,000 Government Development Bank for Puerto Rico (GDB), 3.45% CP, $ 5,000,000
Mandatory Tender 7/9/1998
1,700,000 Puerto Rico Industrial, Medical & Environmental PCA, 3.50% CP 1,700,000
(Ana G. Mendez Educational Foundation)/(Banco Santander LOC),
Mandatory Tender 9/11/1998
5,685,000 Puerto Rico Municipal Finance Agency, Revenue Bonds, Series 5,690,830
A, 4.50% Bonds, 7/1/1998
Total 25,182,428
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 298,138,528
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 24% 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 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, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
FIRST TIER SECOND TIER
100% 0%
(b) Also represents cost for federal tax purposes.
(c) Denotes a restricted security which is subject to restriction on resales
under Federal Securities laws. At April 30, 1998, these securities amounted
to $30,509,969 which represents 10% of net assets.
Note: The categories of investments are shown as a percentage of net assets
($299,339,834) at April 30, 1998.
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 GTD --Guaranty HEFA
- --Health and Education Facilities Authority HFA --Housing Finance Authority INS
- --Insured LIQ --Liquidity Agreement LLC --Limited Liability Corporation LOC
- --Letter of Credit PCA --Pollution Control Authority PCR --Pollution Control
Revenue PLC --Public Limited Company TOBs --Tender Option Bonds UT --Unlimited
Tax VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
CONNECTICUT MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 298,138,528
Income receivable 2,218,583
Prepaid expenses 6,866
Total assets 300,363,977
LIABILITIES:
Income distribution payable $ 862,216
Payable to Bank 110,589
Accrued expenses 51,338
Total liabilities 1,024,143
Net Assets for 299,339,921 shares outstanding $ 299,339,834
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$299,339,834 / 299,339,921 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
CONNECTICUT MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 5,551,052
EXPENSES:
Investment advisory fee $ 775,767
Administrative personnel and services fee 117,009
Custodian fees 4,182
Transfer and dividend disbursing agent fees and expenses 23,709
Directors'/Trustees' fees 2,061
Auditing fees 6,464
Legal fees 4,656
Portfolio accounting fees 41,015
Shareholder services fee 387,883
Share registration costs 17,585
Printing and postage 6,776
Insurance premiums 3,236
Miscellaneous 3,039
Total expenses 1,393,382
Waivers --
Waiver of investment advisory fee $ (285,000)
Waiver of shareholder services fee (170,669)
Total waivers (455,669)
Net expenses 937,713
Net investment income $ 4,613,339
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
CONNECTICUT MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 4,613,339 $ 7,830,678
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (4,613,339) (7,830,678)
SHARE TRANSACTIONS--
Proceeds from sale of shares 525,971,500 889,231,384
Net asset value of shares issued to shareholders in payment of 1,259,150 2,819,845
distributions declared
Cost of shares redeemed (499,207,158) (847,823,630)
Change in net assets resulting from share transactions 28,023,492 44,227,599
Change in net assets 28,023,492 44,227,599
NET ASSETS:
Beginning of period 271,316,342 227,088,743
End of period $ 299,339,834 $ 271,316,342
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993**
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03 0.02 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.01) (0.03) (0.03) (0.02) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.49% 3.01% 3.02% 3.31% 2.12% 1.96%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.60%* 0.60% 0.60% 0.60% 0.59% 0.57%
Net investment income 2.97%* 2.97% 2.97% 3.26% 2.11% 1.95%
Expense waiver/reimbursement(b) 0.29%* 0.31% 0.32% 0.30% 0.18% 0.25%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $299,340 $271,316 $227,089 $184,718 $190,423 $140,446
</TABLE>
* Computed on an annualized basis.
** Prior to November 6, 1992, the fund provided two classes of shares.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
CONNECTICUT MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 Connecticut dividend and interest income tax consistent with stability of
principal.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Clipper Connecticut Tax Exempt Trust (Series 1994-1) 8/16/1996 - 5/20/1997
$11,053,371 Connecticut State HFA, PT-1003 11/14/1997 - 11/17/1997 4,565,000
Connecticut State HFA, Trust Receipts Series 1998 FR/RIA4 4/16/1998 2,100,000
Commonwealth of Puerto Rico Municipal Revenues 5/30/1997 - 1/8/1998 9,791,598
Collection Center, 1997A Lease TOPS Commonwealth of Puerto Rico (Series 1992A)
2/12/1998 3,000,000
</TABLE>
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
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, 1998, capital paid-in aggregated $299,339,834. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
Shares sold 525,971,500 889,231,384
Shares issued to shareholders in payment of distributions declared 1,259,150 2,819,845
Shares redeemed (499,207,158) (847,823,630)
Net change resulting from share transactions 28,023,492 44,227,599
</TABLE>
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, Inc. 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 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.
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, 1998, 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 $197,735,000 and $217,410,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 52.3% 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 7.0% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and admininstrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps willl be
sufficient to avoid any adverse impact to the fund.
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
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
Anthony R. Bosch
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.
[Graphic]FEDERATED INVESTORS
CONNECTICUT MUNICIPAL CASH TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
www.federatedinvestors.com
Cusip 314229105
0052406 (6/98)
[Graphic]
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, 1997, through April 30, 1998. 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 totaled $375.7 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 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 25- to 60-day average maturity range over the
reporting period, a neutral stance, and moved within that range according to
relative value opportunities and supply constraints. We continued to employ a
barbelled structure for the portfolio, combining a significant position in
seven-day VRDNs with purchases of longer-term securities with maturities between
six and twelve months. Once an average maturity range was targeted, we attempted
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 municipal to taxable instruments, such as
treasury securities. This portfolio structure continued to pursue a competitive
yield over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Shares on April 30,
1998, was 3.45%* compared to 3.29% at the beginning of the reporting period. The
increase in yield was due in large part to technical factors related to income
tax payments by individuals in April. The latest yield was the equivalent to a
5.72% taxable yield for investors in the highest federal tax bracket. For the
Cash II Shares, the seven-day net yield was 3.19%* on April 30, 1998, compared
to 3.02% at the beginning of the reporting period. The latest yield was
equivalent to a taxable yield of 5.28% for investors in the highest federal tax
bracket. The fund also continued to provide exemption from the State of Florida
intangibles tax levy.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters, and if the drag on
the U.S. economy does not materialize, expectations of a need for Fed rate
increase will most likely rebuild. In the near term, however, market movements
will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
returns. 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. Yields quoted for money market funds most
closely reflect the fund's current earnings.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
FLORIDA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.1%
FLORIDA--88.2%
$ 20,000,000 Brevard County, FL School District, (Series 1997), 3.95% $ 20,006,367
TANs, 6/30/1998
550,000 Brevard County, FL, Greywater Investments II, Ltd. 1997 550,000
Weekly VRDNs (Greywater Investments)/(Huntington National
Bank, Columbus, OH LOC)
3,155,000 Broward County, FL HFA, (CR-5), 3.85% TOBs (GNMA 3,155,000
COL)/(Citibank N.A., New York LIQ), Optional Tender
5/1/1998
3,700,000 Broward County, FL HFA, (Series 1997) Weekly VRDNs (Jacaranda 3,700,000
Village Apartments)/ (Marine Midland Bank N.A., Buffalo, NY
LOC)
20,000,000 Broward County, FL, (Series B), 3.40% CP, Mandatory Tender 20,000,000
5/13/1998
17,726,000 Broward County, FL, (Series B), 3.55% CP, Mandatory Tender 17,726,000
6/10/1998
7,000,000 Broward County, FL, (Series B), 3.75% CP, Mandatory Tender 7,000,000
5/11/1998
11,100,000 Broward County, FL, (Series B), 3.75% CP, Mandatory Tender 11,100,000
6/17/1998
1,130,000 Broward County, FL, IDRB (Series 1993) Weekly VRDNs (American 1,130,000
Whirlpool Products Corp. Project)/(Nationsbank, N.A.,
Charlotte LOC)
1,000,000 Broward County, FL, IDRB's (Series 1997) Weekly VRDNs (Fast 1,000,000
Real Estate Partners, Ltd.)/ (SunTrust Bank, Central Florida
LOC)
6,000,000 Charlotte County, FL School District, (Series 1997), 4.00% 6,002,054
TANs, 6/30/1998
2,000,000 Dade County, FL IDA, IDRB's (Series 1996A) Weekly VRDNs (U.S. 2,000,000
Holdings, Inc.)/(First Union National Bank of Florida LOC)
1,840,000 (b)Escambia County, FL HFA, P-Floats PA-129 Weekly VRDNs 1,840,000
(Merrill Lynch Capital Services, Inc. LIQ)
7,750,000 (b)Escambia County, FL HFA, PT 1017 Weekly VRDNs (GNMA 7,750,000
COL)/(Merrill Lynch Capital Services, Inc. LIQ)
4,335,000 (b)Escambia County, FL HFA, PT-121, 3.75% TOBs (GNMA 4,335,000
COL)/(Banco Santander LIQ), Mandatory Tender 3/11/1999
10,870,000 (b)Escambia County, FL HFA, Variable Rate Certificates, 10,870,000
(Series 1997E) Weekly VRDNs (GNMA COL)/(Bank of America, San
Francisco LIQ)
6,890,000 (b)Florida HFA, Homeowner Mortgage Revenue Bonds PT-88
6,890,000 (Series 1996-3) Weekly VRDNs (GNMA COL)/(Banco
Santander LIQ)
7,000,000 Florida HFA, Multifamily Housing Revenue Bonds (1985 Series 7,000,000
SS) Weekly VRDNs (Woodlands Apartments)/(Northern Trust Co.,
Chicago, IL LOC)
2,000,000 Florida HFA, Series NN, South Pointe Project, 3.85% TOBs 2,000,000
(South Pointe Project)/(Chase Manhattan Bank N.A., New York
LOC), Mandatory Tender 11/1/1998
4,000,000 Florida HFA, Series OO, Oaks at Mill Creek Project, 3.85%
4,000,000 TOBs (Oaks at Mills Creek)/ (Chase Manhattan
Bank N.A., New York LOC), Mandatory Tender 11/1/1998
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
FLORIDA--CONTINUED
$ 4,465,000 (b)Florida HFA, Trust Receipts, Series 1998 FR/RI-12 Weekly $ 4,465,000
VRDNs (MBIA INS)/(Bank of New York, New York LIQ)
770,000 Florida State Department of Transportation, (Alligator Alley 771,995
Revenue Bonds, Series 1997), 5.50% Bonds (FGIC INS), 7/1/1998
2,385,000 Florida State, 5.00% Bonds, 7/1/1998 2,389,849
1,375,000 Greater Orlando (FL) Aviation Authority, Adjustable Rate 1,375,000
(Series 1997), 3.90% TOBs (Signature Flight Support
Corp.)/(Bayerische Landesbank Girozentrale LOC), Mandatory
Tender 6/1/1998
5,000,000 Greater Orlando (FL) Aviation Authority, Airport Facilities 5,000,000
Subordinated CP Notes (Series B), 3.75% CP, Mandatory Tender
6/16/1998
7,000,000 Gulf Breeze, FL, Variable Rate Demand Revenue Bonds (Series 7,000,000
1995A) Weekly VRDNs (Florida Municipal Bond Fund)/(Barnett
Bank, N.A. LOC)
4,500,000 Hillsborough County, FL Aviation Authority, Bond Anticipation 4,500,000
Commercial Paper Notes, 3.45% CP (Tampa International
Airport)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 6/9/1998
3,100,000 Hillsborough County, FL Aviation Authority, Bond Anticipation 3,100,000
Commercial Paper Notes, 3.70% CP (Tampa International
Airport)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 6/8/1998
2,000,000 Hillsborough County, FL IDA Weekly VRDNs (Ringhager
Equipment 2,000,000 Co.)/(Mellon Bank N.A., Pittsburgh
LOC)
1,000,000 Hillsborough County, FL IDA, (Series 1988) Weekly VRDNs 1,000,000
(Florida Steel Corp.)/(Bankers Trust Co., New York LOC)
2,000,000 Hillsborough County, FL IDA, (Series 1992) Weekly VRDNs
2,000,000 (SIFCO Turbine Component Service)/(National City
Bank, Ohio LOC)
1,390,000 Hillsborough County, FL IDA, IDRB's (Series 1996) Weekly 1,390,000
VRDNs (VIGO Importing Company Project)/(Barnett Bank, N.A.
LOC)
1,225,000 Hillsborough County, FL IDA, Variable Rate Demand IRDB's 1,225,000
(Series 1996) Weekly VRDNs (Trident Yacht Building
Partnership Project)/(First Union National Bank of Florida
LOC)
7,000,000 Indian River County, FL Hospital District, (Series 1985) 7,000,000
Weekly VRDNs (Kredietbank N.V., Brussels LOC)
4,080,000 Indian River County, FL, IDRB's (Series 1997) Weekly VRDNs 4,080,000
(Ocean Spray Cranberries, Inc.)/ (Wachovia Bank of NC, N.A.,
Winston-Salem LOC)
1,900,000 Jacksonville, FL HFDC, Health Facilities Revenue Bonds 1,900,000
(Series 1996) Weekly VRDNs (Jacksonville Faculty Practice
Association Project)/(Nationsbank, N.A., Charlotte LOC)
6,500,000 Jacksonville, FL IDA, IDRBs (series 1996) Weekly VRDNs 6,500,000
(Portion Pac, Inc.)/ (Heinz (H.J.) Co. GTD)
800,000 Jacksonville, FL Weekly VRDNs (Metal Sales)/(National City 800,000
Bank, Kentucky LOC)
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
FLORIDA--CONTINUED
$ 3,200,000 Lee County, FL IDA, IDRB (Series 1994) Weekly VRDNs (Baader $ 3,200,000
North America Corp.)/ (Deutsche Bank, AG LOC)
3,000,000 Manatee County, FL Port Authority, (Series 1997), 4.25% BANs, 3,001,687
7/1/1998
3,400,000 Manatee County, FL, IDR Refunding Bonds (Series 1997)
Weekly 3,400,000 VRDNs (CFI Manufacturing, Inc.
Project)/(Barnett Bank, N.A.
LOC)
2,700,000 Manatee County, FL, Variable/Fixed Rate IDRB's (Series
1998) 2,700,000 Weekly VRDNs (Mader Electric,
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC)
2,400,000 Martin County, FL IDA, Tender Industrial Revenue Bonds 2,400,000
(Series 1986) Weekly VRDNs (Tampa Farm Service, Inc.
Project)/(SunTrust Banks, Inc. LOC)
12,700,000 Miami, FL Health Facilities Authority, Health Facilities 12,700,000
Revenue Bonds (Series 1996) Weekly VRDNs (Miami Jewish Home
and Hospital for the Aged, Inc.)/(SunTrust Bank, Central
Florida LOC)
2,100,000 Okeechobee County, FL, (Series 1992) Weekly VRDNs (Morgan 2,100,000
Guaranty Trust Co., New York LOC)
5,893,000 Orange County, FL HFA, (Series 1997A) Weekly VRDNs (Regal 5,893,000
Pointe Apartments Project)/ (Nationsbank, N.A., Charlotte
LOC)
11,000,000 Orange County, FL School District, (Series 1997), 4.25% TANs, 11,021,950
9/15/1998
13,400,000 Osceola County, FL HFA, Multifamily Housing Revenue Bonds 13,400,000
(Series 1998A) Weekly VRDNs (Arrow Ridge Apartments)/(Amsouth
Bank N.A., Birmingham LOC)
7,000,000 Palm Beach County, FL HFA, SFM Revenue Bonds, (Series 1997B), 7,000,000
3.95% TOBs (Bayerische Landesbank Girozentrale), Mandatory
Tender 7/1/1998
20,000,000 Palm Beach County, FL School District, (Series 1997), 4.50% 20,067,088
TANs, 10/13/1998
3,500,000 (b)Pinellas County Industry Council, FL, IDRB (Series 1994) 3,500,000
Weekly VRDNs (Genca Corporation Project)/(PNC Bank, Ohio,
N.A. LOC)
2,543,000 Pinellas County Industry Council, FL, IDRB (Series 1995) 2,543,000
Weekly VRDNs (ATR International Inc., Project)/(First Union
National Bank of Florida LOC)
7,500,000 Pinellas County, FL HFA, Single Family Housing revenue Bonds 7,500,000
(1998 Series B), 3.70% TOBs (Trinity Funding Co.), Mandatory
Tender 2/1/1999
12,000,000 Pinellas County, FL Health Facility Authority Daily VRDNs 12,000,000
(Chase Manhattan Bank N.A., New York LOC)
2,000,000 (b)Pinellas County, FL Health Facility Authority, SFM Revenue 2,000,000
Bonds (Series PA-92) Weekly VRDNs (GNMA COL)/(Merrill Lynch
Capital Services, Inc. LIQ)
4,000,000 Putnam County, FL Development Authority, Floating/Fixed Rate 4,000,000
Poll Control Revenue Bonds (Pooled Series 1984 H-4), 3.50%
TOBs (Seminole Electric Cooperative, Inc (FL))/(National
Rural Utilities Cooperative Finance Corp. LOC), Optional
Tender 9/15/1998
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
FLORIDA--CONTINUED
$ 8,150,000 Putnam County, FL Development Authority, PCR Bonds (Series $ 8,150,000
1984H) Weekly VRDNs (Seminole Electric Cooperative, Inc
(FL))/(National Rural Utilities Cooperative Finance Corp.
LOC)
1,520,000 (b)Sarasota County, FL IDRB, (Series 1994) Monthly VRDNs 1,520,000
(Resource Recovery Systems of Sarasota Project)/(Fleet
National Bank, Springfield, MA LOC)
1,100,000 Sumter County, FL IDA Weekly VRDNs (Great Southern Wood 1,100,000
Preserving Co.)/(SouthTrust Bank of Alabama, Birmingham LOC)
3,300,000 Tamarac, FL, IDRB (Series 1995) Weekly VRDNs (Arch Aluminum & 3,300,000
Glass Co., Inc. Project)/ (Mellon Bank N.A., Pittsburgh LOC)
1,575,000 Volusia County, FL IDA Weekly VRDNs (Crane Cams)/(Wells Fargo 1,575,000
Bank, Arizona LOC)
2,700,000 Wakulla County, FL IDA Weekly VRDNs (Winco Utilities, Inc. 2,700,000
Project)/(Barnett Bank, N.A. LOC)
Total 331,322,990
ALABAMA--2.8%
5,000,000 Alabama HFA, Multifamily Revenue Bonds (Series 1997) Weekly 5,000,000
VRDNs (YW Housing Partners, Ltd. Project)/(Amsouth Bank N.A.,
Birmingham LOC)
2,575,000 St. Clair County, AL IDB, (Series 1993) Weekly VRDNs (Ebsco 2,575,000
Industries, Inc.)/(National Australia Bank, Ltd., Melbourne
LOC)
1,500,000 Tallassee, AL IDB, (Series 1998) Weekly VRDNs (Milstead
Farm 1,500,000 Group, Inc.)/(Regions Bank, Alabama LOC)
1,500,000 Troy, AL IDB, IRB's (Series 1996A) Weekly VRDNs (Hudson 1,500,000
Sauces & Dressings, Inc.)/ (Amsouth Bank N.A., Birmingham
LOC)
Total 10,575,000
MISSISSIPPI--2.9%
10,700,000 Jackson County, MS Port Facility Daily VRDNs (Chevron U.S.A., 10,700,000
Inc.)
PENNSYLVANIA--4.6%
4,000,000 Pennsylvania State Higher Education Assistance Agency, 4,000,000
Student Loan Adjustable Rate Revenue Bonds (Series 1997A)
Weekly VRDNs (Student Loan Marketing Association LOC)
8,500,000 Philadelphia, PA, GO Series 1990, 4.60% CP (Fuji Bank,
Ltd., 8,500,000 Tokyo LOC), Mandatory Tender 5/19/1998
4,800,000 Philadelphia, PA, GO Series 1990, 4.60% CP (Fuji Bank,
Ltd., 4,800,000 Tokyo LOC), Mandatory Tender 5/21/1998
Total 17,300,000
</TABLE>
FLORIDA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
TENNESSEE--0.6%
$ 1,500,000 Sevier County, TN Public Building Authority, Local Government $ 1,500,000
Improvement Bonds, (Series II-G-2) Weekly VRDNs (Knoxville,
TN)/(AMBAC INS)/(Kredietbank N.V., Brussels LIQ)
900,000 Union County, TN IDB, (Series 1995) Weekly VRDNs (Cooper 900,000
Container Corporation Project)/ (SunTrust Bank, Nashville
LOC)
Total 2,400,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 372,297,990
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 57.9% 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 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, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING PERCENTAGE BASED ON TOTAL MARKET VALUE (UNAUDITED)
FIRST TIER SECOND TIER
96.43% 3.57%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted
to $43,170,000 which represents 11.5% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($375,678,172) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BANs --Bond Anticipation
Notes COL --Collateralized CP --Commercial Paper FGIC --Financial Guaranty
Insurance Company GNMA --Government National Mortgage Association GO --General
Obligation 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 INS --Insured IRB --Industrial Revenue Bond LIQ
- --Liquidity Agreement LOC --Letter of Credit MBIA --Municipal Bond Investors
Assurance PCR --Pollution Control Revenue PLC --Public Limited Company SFM
- --Single Family Mortgage TANs --Tax Anticipation Notes TOBs --Tender Option
Bonds VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
FLORIDA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 372,297,990
Cash 593,141
Income receivable 3,603,601
Prepaid expenses 16,981
Deferred organizational costs 4,163
Other assets 7,538
Total assets 376,523,414
LIABILITIES:
Income distribution payable $ 767,774
Accrued expenses 77,468
Total liabilities 845,242
NET ASSETS for 375,678,172 shares outstanding $ 375,678,172
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$276,079,378 / 276,079,378 shares outstanding $1.00
CASH II SHARES:
$99,598,794 / 99,598,794 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
FLORIDA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 12,985,778
EXPENSES:
Investment advisory fee $ 1,429,519
Administrative personnel and services fee 269,513
Custodian fees 22,949
Transfer and dividend disbursing agent fees and expenses 38,317
Directors'/Trustees' fees 3,710
Auditing fees 6,516
Legal fees 4,745
Portfolio accounting fees 71,992
Distribution services fee--Cash II Shares 178,715
Shareholder services fee--Institutional Shares 714,735
Shareholder services fee--Cash II Shares 178,715
Share registration costs 17,181
Printing and postage 10,834
Insurance premiums 3,310
Miscellaneous 5,172
Total expenses 2,955,923
Waivers--
Waiver of investment advisory fee $ (439,322)
Waiver of distribution services fee--Cash II Shares (35,743)
Waiver of shareholder services fee--Institutional (171,536)
Shares
Total waivers (646,601)
Net expenses 2,309,322
Net investment income $ 10,676,456
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
FLORIDA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 10,676,456 $ 18,019,018
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (8,647,018) (15,508,497)
Cash II Shares (2,029,438) (2,510,521)
Change in net assets resulting from distributions to (10,676,456) (18,019,018)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 1,720,131,322 1,742,878,407
Net asset value of shares issued to shareholders in payment 6,768,731 11,374,153
of distributions declared
Cost of shares redeemed (1,893,838,294) (1,744,452,792)
Change in net assets resulting from share transactions (166,938,241) 9,799,768
Change in net assets (166,938,241) 9,799,768
NET ASSETS:
Beginning of period 542,616,413 532,816,645
End of period $ 375,678,172 $ 542,616,413
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--CASH II SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
(UNAUDITED)
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997 1996(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.01) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.41% 2.94% 2.80%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.85%* 0.79% 0.65%*
Net investment income 2.84%* 2.88% 3.07%*
Expense waiver/reimbursement(c) 0.18%* 0.24% 0.43%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $99,599 $62,756 $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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
(UNAUDITED)
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994(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 0.04 0.004
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.04) (0.004)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.54% 3.20% 3.20% 3.60% 0.35%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.59%* 0.54% 0.49% 0.45% 0.28%*
Net investment income 3.02%* 3.15% 3.17% 3.58% 3.28%*
Expense waiver/reimbursement(c) 0.18%* 0.25% 0.34% 0.42% 1.03%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $276,079 $479,860 $500,993 $153,347 $53,966
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 12, 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)
NOTES TO FINANCIAL STATEMENTS
FLORIDA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 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.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SECURITY ACQUISITION DATE ACQUISITION COST
Escambia Cty, FL HFA P-Floats PA-129 12/2/1996 $ 1,840,000
Escambia Cty, FL HFA, PT 1017 4/9/1998 7,750,000
Escambia Cty, FL HFA PT-121, 3.75% TOBs 4/2/1998 4,335,000
Escambia Cty, FL HFA Variable Rate Cert. 6/5/1997 10,870,000
FL HFA HMRB PT-88 9/27/1996 6,890,000
FL HFA, Trust Receipts 2/12/1998 4,465,000
Pinellas County Industry Council, FL IDRB 11/29/1994 & 1/18/1995 3,500,000
Pinellas County FL HFA SFM Rev. Bonds 3/3/1995 2,000,000
Sarasota County FL IDRB 11/15/1994 1,520,000
</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.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited numbers of
full and fractional shares of beneficial interest (without par value) for each
claas of shares.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
(UNAUDITED)
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SHARES 1998 1997
<S> <C> <C>
Shares sold 1,237,727,905 1,408,372,551
Shares issued to shareholders in payment of distributions declared 6,680,146 11,369,710
Shares redeemed (1,448,189,173) (1,440,874,666)
Net change resulting from Institutional Share transactions (203,781,122) (21,132,405)
<CAPTION>
SIX MONTHS
(UNAUDITED)
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
CASH II SHARES 1998 1997
<S> <C> <C>
Shares sold 482,403,417 334,505,856
Shares issued to shareholders in payment of distributions declared 88,585 4,443
Shares redeemed (445,649,121) (303,578,126)
Net change resulting from Cash II Share transactions 36,842,881 30,932,173
Net change resulting from share transactions (166,938,241) 9,799,768
</TABLE>
At April 30, 1998, capital paid-in aggregated $375,678,172.
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, Inc. for the period. The
administrative fee received during the period of the Administrative Services
Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
DISTRIBUTION SERVICES FEE
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Fund will compensate Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of the
Fund to finance activities intended to result in the sale of the Fund's
Institutional Shares and Cash II Shares. The Plan provides that the Fund may
incur distribution expenses according to the following schedule annually, to
compensate FSC.
PERCENTAGE OF AVERAGE
SHARE CLASS DAILY NET ASSETS OF CLASS
Institutional Shares 0.25%
Cash II Shares 0.25%
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 ended April 30, 1998, the Institutional Shares
did not incur a distribution services fee.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services ("FSS"), the Fund will pay FSS up to 0.25% of 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 reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five-year period following effective date. For
the period ended April 30, 1998, the Fund expensed $4,720 of organizational
expenses.
INTERFUND TRANSACTIONS
During the period ended April 30, 1998, 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 $1,172,006,160 and $1,355,412,340,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 48.2% 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 3.6% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
[Graphic]FEDERATED INVESTORS
Florida Municipal Cash Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229758
Cusip 314229683
G00827-02 (6/98)
[Graphic]
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, 1997 through April 30, 1998. 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 state 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 totaled $140.4 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 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the period at close to
3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75% by the
end of the year as inflation remained friendly. Yields dropped sharply to 3.60%
in January, and to 3.50% in February due to supply constraints and fears that
the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 35- to 55-day average maturity range over the
reporting period, a neutral stance, and moved within that range according to
relative value opportunities. We continued to employ a barbelled structure for
the portfolio, combining a significant position in seven-day VRDNs with
purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to pursue a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund on April 30, 1998, was 3.76% compared to
3.37% at the beginning of the reporting period.* The increase in yield was
partly due to technical factors related to income tax payments by individuals in
April. The latest yield was the equivalent to a 6.91% taxable yield for
investors in the highest federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
GEORGIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
(A)SHORT-TERM MUNICIPALS--99.2%
GEORGIA--98.9%
$ 4,400,000 Athens-Clarke County, GA IDA, (Series 1988), 3.70% CP (Rhone $ 4,400,000
Merieux, Inc. Project)/ (Societe Generale, Paris LOC),
Mandatory Tender 7/9/1998
1,500,000 Athens-Clarke County, GA IDA, (Series 1997) Weekly VRDNs 1,500,000
(Armagh Capital Resource, LLC)/ (Wachovia Bank of Georgia
N.A., Atlanta LOC)
2,000,000 Atlanta, GA, Airport Facilities Revenue Refunding Bonds 2,018,431
(Series 1996), 5.25% Bonds (Hartsford Atlanta International
Airport)/(AMBAC INS), 1/1/1999
1,600,000 Atlanta, GA, Urban Residential Finance Authority, Multifamily 1,600,000
Housing Revenue Bonds (Series 1995) Weekly VRDNs (West End
Housing Development Project)/(First Union National Bank,
Charlotte, NC LOC)
2,120,000 Brunswick and Glynn County, GA Development Authority, 2,120,000
Multi-Mode Variable Rate IDRB's (Series 1996) Weekly VRDNs
(Daewoo Equipment Corp.)/(KeyBank, N.A. LOC)
3,800,000 Brunswick, GA, Housing Authority, (Series S93) Weekly VRDNs 3,800,000
(Island Square Apartments)/ (Columbus Bank and Trust Co., GA
LOC)
5,000,000 Burke County, GA Development Authority, (Series 1997B), 3.80% 5,000,000
Bonds (Oglethorpe Power Corp.)/(AMBAC INS), 5/28/1998
1,090,000 Carrollton, GA, (Series 1998), 3.60% Bonds, 2/1/1999
1,090,000 1,615,000 Cherokee County, GA Development Authority, IDRB
Weekly VRDNs 1,615,000
(Morrison Products, GA)/ (KeyBank, N.A. LOC)
7,000,000 Clayton County, GA Housing Authority, Multifamily Housing 7,000,000
Revenue Bonds (Series 1997) Weekly VRDNs (Hyde Park Club
Apartments)/(KeyBank, N.A. LOC)
550,000 Clayton County, GA Housing Authority, Revenue Refunding Bonds 550,000
(Series 1992) Weekly VRDNs (Oxford Townhomes Project)/(Amsouth
Bank N.A., Birmingham LOC)
2,295,000 Cobb County, GA IDA Weekly VRDNs (Atlanta RDC Co.)/(First 2,295,000
Union National Bank, Charlotte, NC LOC)
3,175,000 Cobb County, GA IDA, (Series 1997) Weekly VRDNs (Wyndham 3,175,000
Gardens)/(Bankers Trust Co., New York LOC)
1,700,000 Cobb County, GA IDA, IDRB (Series 1995) Weekly VRDNs 1,700,000
(Consolidated Engineering Company, Inc. Project)/(Nationsbank,
N.A., Charlotte LOC)
870,000 Columbia County, GA Development Authority, (Series 1991) 870,000
Weekly VRDNs (Augusta Sportswear, Inc.)/(Wachovia Bank of
Georgia N.A., Atlanta LOC)
885,000 Columbus, GA IDA, (Series 90B) Weekly VRDNs (R. P. Real 885,000
Estate, Inc.)/(Columbus Bank and Trust Co., GA LOC)
4,200,000 Conyers-Rockdale-Big Haynes, GA Impoundment Authority, (Series 4,203,558
1997), 4.00% BANs, 12/1/1998
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
GEORGIA--CONTINUED
$ 3,000,000 Coweta County, GA IDA, (Series 1995) Weekly VRDNs (Lanelco $ 3,000,000
L.L.C. Project)/(NBD Bank, Michigan LOC)
6,000,000 Crisp County, GA Development Authority, (Series B), 4.10% TOBs 6,000,000
(Masonite Corporation)/ (International Paper Co. GTD),
Optional Tender 9/1/1998
1,375,000 De Kalb County, GA Development Authority, (Series 1992) Weekly 1,375,000
VRDNs (House of Cheatham, Inc. Project)/(Nationsbank, N.A.,
Charlotte LOC)
600,000 De Kalb County, GA Development Authority, (Series 1993) Weekly 600,000
VRDNs (Pet, Inc.)/ (PNC Bank, N.A. LOC)
2,000,000 De Kalb County, GA Development Authority, (Series 1995) Weekly 2,000,000
VRDNs (Rock-Tenn Converting Co.)/(SunTrust Bank, Atlanta LOC)
1,215,000 De Kalb County, GA Development Authority, (Series 1996) Weekly 1,215,000
VRDNs (DeKalb Steel, Inc.)/ (SouthTrust Bank of Georgia,
Atlanta LOC)
4,000,000 De Kalb County, GA Multifamily Housing Authority, Multifamily 4,000,000
Housing Revenue Bonds (Series 1996) Weekly VRDNs (Bryton Hill
Apartments)/(PNC Bank, Kentucky LOC)
3,100,000 Douglas County, GA Development Authority, (Series 1997) Weekly 3,100,000
VRDNs (Austral Insulated Products, Inc.)/(Regions Bank,
Alabama LOC)
740,000 Douglas County, GA Development Authority, (Series 1997) Weekly 740,000
VRDNs (Paul B. Goble)/ (Wachovia Bank of Georgia N.A., Atlanta
LOC)
3,500,000 Douglas County, GA, 3.80% TANs, 12/30/1998 3,502,054
3,000,000 Forsyth County, GA School District, 5.50% Bonds, 2/1/1999
3,041,824 1,000,000 Forsythe County, GA Development Authority, IDRB
(Series 1995) 1,000,000
Weekly VRDNs (American BOA, Inc. Project)/(Dresdner Bank AG,
Frankfurt LOC)
2,740,000 Franklin County, GA Industrial Building Authority, (Series 2,740,000
1995) Weekly VRDNs (Bosal Industries, Inc.)/(ABN AMRO Bank
N.V., Amsterdam LOC)
3,400,000 Fulton County, GA Development Authority, (Series 1998) Weekly 3,400,000
VRDNs (Morehouse School of Medicine)/(SunTrust Bank, Atlanta
LOC)
2,200,000 Fulton County, GA IDA Weekly VRDNs (Automatic Data Processing, 2,200,000
Inc.)
2,930,000 Fulton County, GA IDA Weekly VRDNs (C.K.S. Packaging, 2,930,000
Inc.)/(SouthTrust Bank of Georgia, Atlanta LOC)
2,000,000 Fulton County, GA IDA, (Series 1997) Weekly VRDNs (In-Store 2,000,000
Media Corp.)/(SunTrust Bank, Atlanta LOC)
300,000 Gainesville, GA Redevelopment Authority, IDRB (Series 1986) 300,000
Weekly VRDNs (Hotel of Gainesville Associates
Project)/(Regions Bank, Alabama LOC)
2,000,000 Georgia Municipal Electric Authority, Series S, 7.25% Bonds 2,086,738
(United States Treasury PRF), 1/1/1999 (@102)
1,900,000 Georgia Ports Authority, (Series 1996A) Weekly VRDNs 1,900,000
(Colonel's Island Terminal)/ (SunTrust Bank, Atlanta LOC)
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
GEORGIA--CONTINUED
$ 3,135,000 Gwinnett County, GA IDA, (Series 1996) Weekly VRDNs (Sidel, $ 3,135,000
Inc. Project)/ (Nationsbank, N.A., Charlotte LOC)
630,000 Gwinnett County, GA IDA, (Series 1997) Weekly VRDNs (Virgil
R. 630,000 Williams, Jr.)/(Wachovia Bank of Georgia N.A.,
Atlanta LOC)
1,250,000 Jackson County, GA IDA, (Series 1997) Weekly VRDNs (Mullett 1,250,000
Co.)/(Wachovia Bank of Georgia N.A., Atlanta LOC)
1,500,000 Jefferson, GA Development Authority, (Series 1997) Weekly 1,500,000
VRDNs (Ringwood Containers, L.P.)/(Wachovia Bank of Georgia
N.A., Atlanta LOC)
3,180,000 La Grange, GA, Multifamily Housing Authority, Revenue Bonds, 3,180,000
4.40% TOBs (Lee's Crossing Project Phase II)/(Columbus Bank
and Trust Co., GA LOC), Optional Tender 5/1/1998
3,000,000 La Grange, GA, Multifamily Housing Authority, Revenue Bonds, 3,000,000
4.40% TOBs (Lee's Crossing Project Phase I)/(Columbus Bank and
Trust Co., GA LOC), Optional Tender 5/1/1998
2,750,000 Lowndes County Schools, GA, 4.15% TANs, 12/31/1998 2,753,554
700,000 Macon-Bibb County, GA Industrial Authority, IDRB (Series 1990) 700,000
Weekly VRDNs (Diamond Plastics Corp. Project)/(Nationsbank,
N.A., Charlotte LOC)
4,470,000 (b)Marietta, GA Housing Authority, Multifamily Housing Revenue 4,470,000
Bonds (Series 1995) Weekly VRDNs (Chalet Apartments
Project)/(General Electric Capital Corp. LOC)
565,000 Milledgeville & Baldwin County, GA Development Authority, 565,000
(Series 1997) Weekly VRDNs (Oconee Area Properties,
Inc.)/(Wachovia Bank of Georgia N.A., Atlanta LOC)
5,330,000 Monroe County, GA Development Authority IDRB, (Series 1997A), 5,330,000
3.90% TOBs (Oglethorpe Power Corp.), Optional Tender 5/28/1998
2,250,000 Monroe County, GA Development Authority IDRB, Pollution 2,250,000
Control Revenue Bonds (First Series 1997) Daily VRDNs (Georgia
Power Co.)/(Georgia Power Co. GTD)
5,435,000 Municipal Electric Authority of Georgia, (Series 1985A), 3.60% 5,435,000
CP (Bayerische Landesbank Girozentrale, Credit Suisse First
Boston and Morgan Guaranty Trust Co., New York LOCs),
Mandatory Tender 5/14/1998
3,100,000 Rockdale County, GA Development Authority, (Series 1995) 3,100,000
Weekly VRDNs (Great Southern Wood Preserving Co.)/(SunTrust
Bank, Central Florida LOC)
600,000 Rockdale County, GA Hospital Authority, Revenue Anticipation 600,000
Certificates (Series 1994) Weekly VRDNs (Rockdale
Hospital)/(SunTrust Bank, Atlanta LOC)
3,490,000 Rome, GA, 4.00% TANs, 12/31/1998 3,494,512
1,000,000 Wayne County, GA, IDA, Revenue Bonds, (Series 1995) Weekly 1,000,000
VRDNs (Harsco Corp.)/ (Nationsbank, N.A., Charlotte LOC)
3,665,000 Whitfield County, GA Development Authority Weekly VRDNs 3,665,000
(Franklin Industries Inc., Project)/(Nationsbank, N.A.,
Charlotte LOC)
1,880,000 Whitfield County, GA Development Authority, (Series 1996) 1,880,000
Weekly VRDNs (AMC International, Inc. Project)/(SouthTrust
Bank of Alabama, Birmingham LOC)
TOTAL 138,890,671
</TABLE>
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--0.3%
$ 405,387 (b)ABN AMRO Chicago Corp. 1997A LeaseTOPS Trust Weekly VRDNs $ 405,387
(Commonwealth of Puerto Rico Municipal Revenues Collection
Center)/(ABN AMRO Bank N.V., Amsterdam LIQ)/ (State Street
Bank and Trust Co. LOC)
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 139,296,058
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 57.6% 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 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, MIG-1, or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and
F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING BASED ON TOTAL MARKET VALUE (UNAUDITED)
FIRST TIER SECOND TIER
95.69% 4.31%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted to
$4,875,387 which represents 3.5% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($140,436,478) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BANs --Bond Anticipation
Notes CP --Commercial Paper GTD --Guaranty IDA --Industrial Development
Authority IDRB --Industrial Development Revenue Bond INS --Insured LIQ
- --Liquidity Agreement LLC --Limited Liability Corporation LOCs --Letters of
Credit LOC --Letter of Credit LP --Limited Partnership PRF --Prerefunded TANs
- --Tax Anticipation Notes TOBs --Tender Option Bonds VRDNs --Variable Rate Demand
Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
GEORGIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 139,296,058
Cash 313,868
Income receivable 1,124,178
Receivable for shares sold 115,000
Deferred expenses 20,593
Deferred organizational costs 8,307
Total assets 140,878,004
LIABILITIES:
Income distribution payable $ 423,667
Accrued expenses 17,859
Total liabilities 441,526
Net Assets for 140,436,478 shares outstanding $ 140,436,478
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$140,436,478 / 140,436,478 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
GEORGIA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,070,707
EXPENSES:
Investment advisory fee $ 400,189
Administrative personnel and services fee 61,987
Custodian fees 3,222
Transfer and dividend disbursing agent fees and expenses 12,218
Directors'/Trustees' fees 727
Auditing fees 5,433
Legal fees 3,406
Portfolio accounting fees 21,630
Shareholder services fee 200,095
Share registration costs 10,281
Printing and postage 4,848
Insurance premiums 2,253
Miscellaneous 4,172
Total expenses 730,461
Waivers--
Waiver of investment advisory fee $ (290,253)
Waiver of shareholder services fee (48,023)
Total waivers (338,276)
Net expenses 392,185
Net investment income $ 2,678,522
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
GEORGIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 2,678,522 $ 5,103,583
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (2,678,522) (5,103,583)
SHARE TRANSACTIONS--
Proceeds from sale of shares 345,146,509 584,493,087
Net asset value of shares issued to shareholders in payment of 1,452,517 2,937,442
distributions declared
Cost of shares redeemed (328,020,751) (588,512,359)
Change in net assets resulting from share transactions 18,578,275 (1,081,830)
Change in net assets 18,578,275 (1,081,830)
NET ASSETS:
Beginning of period 121,858,203 122,940,033
End of period $ 140,436,478 $ 121,858,203
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995(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 0.03 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.67% 3.38% 3.37% 0.73%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.49%* 0.49% 0.46% 0.25%*
Net investment income 3.35%* 3.33% 3.31% 3.81%*
Expense waiver/reimbursement(c) 0.42%* 0.43% 0.52% 0.75%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $140,436 $121,858 $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)
NOTES TO FINANCIAL STATEMENTS
GEORGIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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 uses the amortized cost method to value its portfolio securities 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 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, 1998 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Marietta, GA Housing Authority 12/9/1996-1/23/1997 $4,470,000
ABN AMRO Chicago Corp. 1/27/1998 405,387
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.
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, 1998, capital paid-in-aggregated $140,436,478.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 345,146,509 584,493,087
Shares issued to shareholders in payment of distributions declared 1,452,517 2,937,442
Shares redeemed (328,020,751) (588,512,359)
Net change resulting from share transactions 18,578,275 (1,081,830)
</TABLE>
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, Inc. 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 Adviser for these
expenses. The Fund has reimbursed the Adviser for these expenses. These expenses
have been deferred and are being amortized during the five-year period following
the Funds effective date. For the period ended April 30, 1998, the Fund paid
$2,325 pursuant to this agreement.
INTERFUND TRANSACTIONS
During the period ended April 30, 1998, the Fund engaged in purchase and sales
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 $273,219,497 and $261,606,437
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 77% of the securities in the portfolio of investments are backed
by letters of credit or bond insurance of various financial institutions and
financial guaranty assurance agencies. The percentage of investments insured by
or supported (backed) by a letter of credit from any one institution or agency
did not exceed 8% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and admininstrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps willl be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
[Graphic]
Georgia Municipal Cash Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229691
G01478-01 (6/98)
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, 1997 through April 30, 1998. 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.
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 both Institutional Service Shares and Boston 1784 Funds
Shares. The Fund's total net assets reached $353.5 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, 1998
* Income may be subject to the federal alternative minimum tax.
** An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. Although the Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
INVESTMENT REVIEW
An interview with the fund's portfolio manager, Mary Jo Ochson, CFA, Senior
Vice President, Federated Management
Q. What is your review of the economic and interest rate environment during the
Fund's six-month reporting period?
A. During the Fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, with the expectation that wage inflation
pressures could build. In March, the Fed adopted a "tightening bias" toward
monetary policy but declined to raise short-term interest rates in May, content
to wait until the economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight to quality by
investors seeking a safe haven from the turmoil overseas also drove the yields
of T-bills lower.
Reflecting aggressive demand for T-bills, yields on one year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January and to 3.50% in February due to supply constraints and fears
that the impact of the financial troubles in Asia on the domestic economy might
be worse than previously thought. Yields then rose to close the reporting period
at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the Fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors in the 35% or higher federal tax brackets.
Q. What was your strategy for the Fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 59 days. The Fund remained in a 55- to 60-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continued to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the Fund performed?
A. The seven-day net yield for the fund's Institutional Service Shares on April
30, 1998, was 3.45%* compared to 3.07% at the beginning of the reporting period.
The increase in yield was due in part to technical factors related to income tax
payments by individuals in April. The latest yield was equivalent to a 7.13%
taxable yield for investors in the highest federal and state tax brackets. For
the Boston 1784 Funds Shares, the seven-day net yield was 3.43%* on April 30,
1998, compared to 3.05% at the beginning of the reporting period. The latest
yield was equivalent to a taxable yield of 7.09% for investors in the highest
federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder
of 1998?
A. The jury is still out on the impact that the crisis in Asian economies will
have on U.S. growth. As a result, the Fed, although certain to be troubled by
persistent above-trend growth in an environment where labor markets are tight,
will likely remain on hold until the effect is better known. Much of this should
be revealed over the second and third quarters, and if the drag on the U.S.
economy does not materialize, expectations of a need for Fed rate increase will
most likely rebuild. In the near term, however, market movements will as likely
reflect technical factors as fundamental factors. These supply/demand imbalances
could very well present attractive investment opportunities for the Fund. We
will continue to watch market developments with great interest in order to best
serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
returns. 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. Yields quoted for money market funds most
closely reflect the fund's current earnings.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM 1: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
On February 24, 1998, the record date for shareholders of Massachusetts
Municipal Trust (the "Fund") voting at the meeting, there were 342,768,496 total
outstanding shares. The following items were considered by shareholders of the
Fund and the results of their voting were as follows:
AGENDA ITEM 2: To approve or disapprove an amendment in the Fund's
fundamental investment policy on diversification of its investments.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON VOTE
187,107,075 538,605 6,647,324 35,774,603
AGENDA ITEM 3: To approve or disapprove amending and changing from a fundamental
to an operating policy the Fund's ability to invest in restricted securities.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON VOTE
183,375,866 3,458,091 7,459,047 35,774,603
* The following Trustees of the Trust continued their terms: John F.
Donahue, William J. Copeland, Glen R. Johnson, James E. Dowd, Lawrence D.
Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar, Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
MASSACHUSETTS MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--100.0%
MASSACHUSETTS--96.6%
$ 5,720,000 Amherst-Pelham Regional School District, MA, 4.00% BANs, $ 5,720,943
5/21/1998
5,000,000 Amherst-Pelham Regional School District, MA, 4.25% BANs, 5,002,584
7/20/1998
8,703,000 Ashland, MA, 4.00% BANs, 12/10/1998 8,723,586
1,245,000 Attleboro, MA, 4.00% BANs, 12/22/1998 1,247,246
3,800,000 Boston, MA, UT GO, 4.50% Bonds (FGIC INS), 1/1/1999 3,822,273
1,000,000 Brockton, MA, 4.50% Bonds (MBIA INS), 4/1/1999 1,007,071
2,000,000 Canton, MA, 4.25% BANs, 9/17/1998 2,002,194
1,800,000 Central Berkshire, MA Regional School District, 4.25% BANs, 1,800,855
7/15/1998
12,944,250 Clipper, MA Tax Exempt Trust Weekly VRDNs (State Street Bank 12,944,250
and Trust Co. LIQ)
3,465,000 Clipper, MA Tax Exempt Trust, (Series 1994-1) Weekly VRDNs 3,465,000
(Massachusetts State HFA)/ (MBIA INS)/(State Street Bank and
Trust Co. LIQ)
3,000,000 Commonwealth of Massachusetts Weekly VRDNs (AMBAC 3,000,000
INS)/(Citibank N.A., New York LIQ)
23,380,000 Commonwealth of Massachusetts, (1997 Series B) Weekly VRDNs 23,380,000
(Landesbank Hessen-Thueringen, Frankfurt LIQ)
5,000,000 Everett, MA, 4.00% BANs (Fleet National Bank, Springfield, MA 5,016,973
LOC), 3/18/1999
3,780,000 Fall River, MA, 4.25% BANs (Fleet National Bank,
Springfield, 3,783,653 MA LOC), 8/14/1998
3,200,000 Framingham, MA IDA Weekly VRDNs (Perini Corp.)/(Barclays Bank 3,200,000
PLC, London LOC)
2,290,000 Framingham, MA, 4.00% BANs, 2/5/1999 2,295,894
3,125,000 Hingham, MA, 4.00% BANs, 10/30/1998 3,130,905
2,500,000 Holden, MA, 4.25% BANs, 10/1/1998 2,503,519
2,100,000 Ipswich, MA, 4.00% BANs, 11/19/1998 2,104,512
16,000,000 Massachusetts Bay Transit Authority, (Series C), 3.65% CP 16,000,000
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/27/1998
3,200,000 Massachusetts Bay Transit Authority, (Series C), 3.85% CP 3,200,000
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/21/1998
7,000,000 Massachusetts Bay Transit Authority, (Series C), 3.90% CP 7,000,000
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/26/1998
16,100,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Brigham & 16,100,000
Women's Hospital)/(Sanwa Bank Ltd., Osaka LOC)
2,000,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Endicott 2,000,000
College)/(BankBoston, N.A. LOC)
3,125,000 Massachusetts HEFA, (Series A) Weekly VRDNs (New England Home 3,125,000
For Little Wanderers)/(BankBoston, N.A. LOC)
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MASSACHUSETTS--CONTINUED
$ 2,000,000 Massachusetts HEFA, (Series B) Weekly VRDNs (Clark $ 2,000,000
University)/(Sanwa Bank Ltd., Osaka LOC)
10,000,000 Massachusetts HEFA, (Series B) Weekly VRDNs (Hallmark
Health 10,000,000 System)/(FSA INS)/(Fleet National Bank,
Springfield, MA LIQ)
2,247,000 Massachusetts HEFA, (Series E) Weekly VRDNs (Williams 2,247,000
College, MA)
8,615,000 Massachusetts HEFA, (Series F) Weekly VRDNs (Children's 8,615,000
Hospital of Boston)
6,000,000 Massachusetts HEFA, 3.50% CP (Harvard University), Mandatory 6,000,000
Tender 5/20/1998
11,000,000 Massachusetts HEFA, 3.50% CP (Harvard University), Mandatory 11,000,000
Tender 5/22/1998
1,300,000 Massachusetts IFA Weekly VRDNs (Groton School)/(National 1,300,000
Westminster Bank, PLC, London LOC)
7,190,000 Massachusetts IFA Weekly VRDNs (Kendall Square Entity)/(State 7,190,000
Street Bank and Trust Co. LOC)
1,910,000 Massachusetts IFA, (1995 Series A) Weekly VRDNs (Bradford 1,910,000
College Issue)/(BankBoston, N.A. LOC)
300,000 Massachusetts IFA, (Series 1992) Weekly VRDNs (Holyoke Water 300,000
Power Co.)/(Canadian Imperial Bank of Commerce, Toronto LOC)
3,300,000 Massachusetts IFA, (Series 1992A) Weekly VRDNs (Ogden 3,300,000
Haverhill)/(Union Bank of Switzerland, Zurich LOC)
14,100,000 Massachusetts IFA, (Series 1992B), 3.65% CP (New England 14,100,000
Power Co.), Mandatory Tender 5/28/1998
4,000,000 Massachusetts IFA, (Series 1992B), 3.70% CP (New England 4,000,000
Power Co.), Mandatory Tender 5/29/1998
5,900,000 Massachusetts IFA, (Series 1994) Weekly VRDNs (Nova Realty 5,900,000
Trust)/(Fleet National Bank, Springfield, MA LOC)
6,000,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard 6,000,000
House)/(Fleet Bank N.A. LOC)
5,800,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Whitehead 5,800,000
Institute for Biomedical Research)
7,100,000 Massachusetts IFA, (Series 1996) Weekly VRDNs (Newbury 7,100,000
College)/(BankBoston, N.A. LOC)
2,500,000 Massachusetts IFA, (Series 1997) Weekly VRDNs
(Massachusetts 2,500,000 Society for the Prevention of
Cruelty to Animals)/(Fleet National Bank, Springfield, MA
LOC)
6,000,000 Massachusetts IFA, (Series 1997) Weekly VRDNs (Mount Ida 6,000,000
College)/(Credit Local de France LOC)
1,425,000 Massachusetts IFA, (Series A) Weekly VRDNs (Hockomock 1,425,000
YMCA)/(Bank of Nova Scotia, Toronto LOC)
5,430,000 Massachusetts IFA, (Series B) Weekly VRDNs (Williston North 5,430,000
Hampton School)/(National Westminster Bank, PLC, London LOC)
5,755,000 Massachusetts IFA, Revenue Bonds (Series 1995) Weekly VRDNs 5,755,000
(Emerson College Issue)/ (BankBoston, N.A. LOC)
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MASSACHUSETTS--CONTINUED
$ 85,000 Massachusetts IFA, Revenue Bonds (Series 1995C) Weekly VRDNs $ 85,000
(Edgewood Retirement Community Project)/(Dresdner Bank AG,
Frankfurt LOC)
19,000,000 Massachusetts Municipal Wholesale Electric Company, Power 19,000,000
Supply System Revenue Bonds (1994 Series C) Weekly VRDNs
(Canadian Imperial Bank of Commerce, Toronto LOC)
3,700,000 Massachusetts State HFA, (Series 56), 3.85% TOBs, Mandatory 3,700,000
Tender 6/1/1998
2,215,000 Massachusetts Turnpike Authority, (PA-324) Weekly VRDNs (MBIA 2,215,000
INS)/(Merrill Lynch Capital Services, Inc. LIQ)
5,000,000 Massachusetts Turnpike Authority, PT-135 Weekly VRDNs (MBIA 5,000,000
INS)/(Banco Santander LIQ)
8,500,000 Massachusetts Turnpike Authority, Variable Rate Certificates 8,500,000
(Series 1997N) Weekly VRDNs (MBIA INS)/(Bank of America, San
Francisco LIQ)
8,000,000 Massachusetts Water Resources Authority, (Series 1994), 3.50% 8,000,000
CP (Morgan Guaranty Trust Co., New York LOC), Mandatory
Tender 5/22/1998
1,815,000 Middleborough, MA, 4.00% BANs, 3/5/1999 1,819,423
1,076,000 Nahant, MA, 4.20% BANs, 8/26/1998 1,076,665
3,625,000 Newburyport, MA, 4.00% BANs, 2/12/1999 3,630,491
2,600,000 Paxton, MA, 4.25% BANs, 6/19/1998 2,601,186
4,050,000 Quabbin Regional School District, MA, 4.00% BANs, 1/15/1999 4,055,533
2,000,000 Rutland, MA, 4.05% BANs, 6/26/1998 2,000,440
2,250,000 Seekonk, MA, 4.25% BANs, 8/7/1998 2,251,510
2,000,000 Springfield, MA, 4.40% BANs (Fleet National Bank, 2,001,326
Springfield, MA LOC), 6/26/1998
2,000,000 Stow, MA, 3.75% BANs, 3/31/1999 2,001,757
1,424,000 Stow, MA, 4.00% BANs, 3/31/1999 1,428,391
2,000,000 Watertown, MA, 4.25% BANs, 5/13/1998 2,000,193
1,279,000 Westfield, MA, 4.00% BANs, 5/8/1998 1,279,073
3,400,000 Westfield, MA, 4.15% BANs, 10/22/1998 3,407,064
3,600,000 Westfield, MA, 4.20% BANs, 6/26/1998 3,602,969
2,500,000 (b)Weymouth, MA, 4.25% BANs, 11/5/1998 2,502,846
Total 341,607,325
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--3.4%
$ 8,000,000 Commonwealth of Puerto Rico, (Series 1998A), 4.50% TRANs, $ 8,019,164
7/30/1998
4,000,000 Puerto Rico Electric Power Authority, MERLOTS (Series 1997S) 4,000,000
Weekly VRDNs (MBIA INS)/ (Corestates Bank N.A., Philadelphia,
PA LIQ)
Total 12,019,164
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 353,626,489
</TABLE>
(a)The Fund may only invest in securities rated in one of the two highest
short-term rating categories 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, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, 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) Represents a delayed delivery security.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($353,591,514) at April 30, 1998.
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 IDA --Industrial
Development Authority IFA --Industrial Finance Authority INS --Insured LIQ
- --Liquidity Agreement LOC --Letter of Credit MBIA --Municipal Bond Investors
Assurance MERLOTS --Municipal Exempt Receipts-Liquidity Optional Tender Series
PLC --Public Limited Company TRANs --Tax and Revenue Anticipation Notes TOBs
- --Tender Option Bonds UT --Unlimited Tax VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
MASSACHUSETTS MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 353,626,489
Income receivable 2,542,294
Prepaid expenses 7,159
Total assets 356,175,942
LIABILITIES:
Income distribution payable $ 949,309
Payable to Bank 1,621,420
Accrued expenses 13,699
Total liabilities 2,584,428
NET ASSETS for 353,591,514 shares outstanding $ 353,591,514
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$210,668,646 / 210,669,556 shares outstanding $1.00
BOSTON 1784 FUNDS SHARES:
$142,922,868 / 142,921,958 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
MASSACHUSETTS MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 5,521,748
EXPENSES:
Investment advisory fee $ 773,797
Administrative personnel and services fee 116,720
Custodian fees 7,119
Transfer and dividend disbursing agent fees and expenses 50,889
Directors'/Trustees' fees 1,810
Auditing fees 7,240
Legal fees 2,715
Portfolio accounting fees 47,850
Shareholder services fee--Institutional Service Shares 240,217
Shareholder services fee--Boston 1784 Funds Shares 146,682
Share registration costs 16,290
Printing and postage 10,679
Insurance premiums 2,172
Miscellaneous 2,715
Total expenses 1,426,895
Waivers --
Waiver of investment advisory fee $ (170,262)
Waiver of shareholder services fee--Institutional (240,217)
Service Shares
Waiver of shareholder services fee--Boston 1784 Funds (146,682)
Shares
Total waivers (557,161)
Net expenses 869,734
Net investment income $ 4,652,014
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 4,652,014 $ 6,125,532
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (2,893,920) (4,462,883)
Boston 1784 Funds Shares (1,758,094) (1,662,649)
Change in net assets resulting from distributions to (4,652,014) (6,125,532)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 575,286,808 682,162,039
Net asset value of shares issued to shareholders in payment of 1,989,005 3,135,034
distributions declared
Cost of shares redeemed (439,390,938) (643,996,755)
Change in net assets resulting from share transactions 137,884,875 41,300,318
Change in net assets 137,884,875 41,300,318
NET ASSETS:
Beginning of period 215,706,639 174,406,321
End of period $ 353,591,514 $ 215,706,639
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.51% 3.09% 3.07% 3.34% 2.14% 1.99%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.55% 0.55% 0.55% 0.55% 0.53%
Net investment income 3.01%* 3.05% 3.02% 3.30% 2.12% 1.97%
Expense waiver/reimbursement(b) 0.36%* 0.40% 0.42% 0.45% 0.35% 0.43%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $210,669 $141,869 $119,739 $99,628 $90,013 $84,524
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
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,
1998 1997 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.50% 3.07% 3.05% 3.30% 2.05% 1.25%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.57%* 0.57% 0.58% 0.60% 0.64% 0.65%*
Net investment income 3.00%* 3.03% 3.01% 3.25% 2.09% 1.85%*
Expense waiver/reimbursement(c) 0.36%* 0.39% 0.42% 0.45% 0.35% 0.43%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $142,923 $73,837 $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)
NOTES TO FINANCIAL STATEMENTS
MASSACHUSETTS MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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. 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.
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 uses the amortized cost method to value its portfolio securities 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.
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, 1998, capital paid-in
aggregated $353,591,514. Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
(unaudited) October 31,
April 30, 1998 1997
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
Shares sold 444,812,744 619,964,162
Shares issued to shareholders in payment of distributions declared 610,949 1,473,299
Shares redeemed (376,623,491) (599,306,953)
Net change resulting from Institutional Service Share transactions 68,800,202 22,130,508
<CAPTION>
Six Months
Ended Year Ended
(unaudited) October 31,
April 30, 1998 1997
<S> <C> <C>
BOSTON 1784 FUNDS SHARES
Shares sold 130,474,064 62,197,877
Shares issued to shareholders in payment of distributions declared 1,378,056 1,661,735
Shares redeemed (62,767,447) (44,689,802)
Net change resulting from Boston 1784 Funds Share transactions 69,084,673 19,169,810
Net change resulting from share transactions 137,884,875 41,300,318
</TABLE>
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, Inc. 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 BankBoston, N.A., the Fund will pay
BankBoston, 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 BankBoston, N.A., may
voluntarily choose to waive any portion of their fees. FSS and BankBoston, N.A.
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, 1998, 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 $177,210,000 and $138,400,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 49.6% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The 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.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not 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. An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
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.
[Graphic]
Massachusetts Municipal Cash Trust
Institutional Service Shares
Boston 1784 Funds Shares
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229832
Cusip 314229303
1052806 (6/98)
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, 1997 through April 30, 1998. 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.
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 both Institutional Service Shares and Boston 1784 Funds
Shares. The Fund's total net assets reached $353.5 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, 1998
* Income may be subject to the federal alternative minimum tax.
** An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. Although the Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
INVESTMENT REVIEW
An interview with the fund's portfolio manager, Mary Jo Ochson, CFA, Senior
Vice President, Federated Management
Q. What is your review of the economic and interest rate environment during the
Fund's six-month reporting period?
A. During the Fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, with the expectation that wage inflation
pressures could build. In March, the Fed adopted a "tightening bias" toward
monetary policy but declined to raise short-term interest rates in May, content
to wait until the economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight to quality by
investors seeking a safe haven from the turmoil overseas also drove the yields
of T-bills lower.
Reflecting aggressive demand for T-bills, yields on one year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January and to 3.50% in February due to supply constraints and fears
that the impact of the financial troubles in Asia on the domestic economy might
be worse than previously thought. Yields then rose to close the reporting period
at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the Fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors in the 35% or higher federal tax brackets.
Q. What was your strategy for the Fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 59 days. The Fund remained in a 55- to 60-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continued to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the Fund performed?
A. The seven-day net yield for the fund's Institutional Service Shares on April
30, 1998, was 3.45%* compared to 3.07% at the beginning of the reporting period.
The increase in yield was due in part to technical factors related to income tax
payments by individuals in April. The latest yield was equivalent to a 7.13%
taxable yield for investors in the highest federal and state tax brackets. For
the Boston 1784 Funds Shares, the seven-day net yield was 3.43%* on April 30,
1998, compared to 3.05% at the beginning of the reporting period. The latest
yield was equivalent to a taxable yield of 7.09% for investors in the highest
federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder
of 1998?
A. The jury is still out on the impact that the crisis in Asian economies will
have on U.S. growth. As a result, the Fed, although certain to be troubled by
persistent above-trend growth in an environment where labor markets are tight,
will likely remain on hold until the effect is better known. Much of this should
be revealed over the second and third quarters, and if the drag on the U.S.
economy does not materialize, expectations of a need for Fed rate increase will
most likely rebuild. In the near term, however, market movements will as likely
reflect technical factors as fundamental factors. These supply/demand imbalances
could very well present attractive investment opportunities for the Fund. We
will continue to watch market developments with great interest in order to best
serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
returns. 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. Yields quoted for money market funds most
closely reflect the fund's current earnings.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM 1: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
On February 24, 1998, the record date for shareholders of Massachusetts
Municipal Trust (the "Fund") voting at the meeting, there were 342,768,496 total
outstanding shares. The following items were considered by shareholders of the
Fund and the results of their voting were as follows:
AGENDA ITEM 2: To approve or disapprove an amendment in the Fund's
fundamental investment policy on diversification of its investments.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON VOTE
187,107,075 538,605 6,647,324 35,774,603
AGENDA ITEM 3: To approve or disapprove amending and changing from a fundamental
to an operating policy the Fund's ability to invest in restricted securities.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON VOTE
183,375,866 3,458,091 7,459,047 35,774,603
* The following Trustees of the Trust continued their terms: John F.
Donahue, William J. Copeland, Glen R. Johnson, James E. Dowd, Lawrence D.
Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar, Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
MASSACHUSETTS MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--100.0%
MASSACHUSETTS--96.6%
$ 5,720,000 Amherst-Pelham Regional School District, MA, 4.00% BANs, $ 5,720,943
5/21/1998
5,000,000 Amherst-Pelham Regional School District, MA, 4.25% BANs, 5,002,584
7/20/1998
8,703,000 Ashland, MA, 4.00% BANs, 12/10/1998 8,723,586
1,245,000 Attleboro, MA, 4.00% BANs, 12/22/1998 1,247,246
3,800,000 Boston, MA, UT GO, 4.50% Bonds (FGIC INS), 1/1/1999 3,822,273
1,000,000 Brockton, MA, 4.50% Bonds (MBIA INS), 4/1/1999 1,007,071
2,000,000 Canton, MA, 4.25% BANs, 9/17/1998 2,002,194
1,800,000 Central Berkshire, MA Regional School District, 4.25% BANs, 1,800,855
7/15/1998
12,944,250 Clipper, MA Tax Exempt Trust Weekly VRDNs (State Street Bank 12,944,250
and Trust Co. LIQ)
3,465,000 Clipper, MA Tax Exempt Trust, (Series 1994-1) Weekly VRDNs 3,465,000
(Massachusetts State HFA)/ (MBIA INS)/(State Street Bank and
Trust Co. LIQ)
3,000,000 Commonwealth of Massachusetts Weekly VRDNs (AMBAC 3,000,000
INS)/(Citibank N.A., New York LIQ)
23,380,000 Commonwealth of Massachusetts, (1997 Series B) Weekly VRDNs 23,380,000
(Landesbank Hessen-Thueringen, Frankfurt LIQ)
5,000,000 Everett, MA, 4.00% BANs (Fleet National Bank, Springfield, MA 5,016,973
LOC), 3/18/1999
3,780,000 Fall River, MA, 4.25% BANs (Fleet National Bank,
Springfield, 3,783,653 MA LOC), 8/14/1998
3,200,000 Framingham, MA IDA Weekly VRDNs (Perini Corp.)/(Barclays Bank 3,200,000
PLC, London LOC)
2,290,000 Framingham, MA, 4.00% BANs, 2/5/1999 2,295,894
3,125,000 Hingham, MA, 4.00% BANs, 10/30/1998 3,130,905
2,500,000 Holden, MA, 4.25% BANs, 10/1/1998 2,503,519
2,100,000 Ipswich, MA, 4.00% BANs, 11/19/1998 2,104,512
16,000,000 Massachusetts Bay Transit Authority, (Series C), 3.65% CP 16,000,000
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/27/1998
3,200,000 Massachusetts Bay Transit Authority, (Series C), 3.85% CP 3,200,000
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/21/1998
7,000,000 Massachusetts Bay Transit Authority, (Series C), 3.90% CP 7,000,000
(Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender
5/26/1998
16,100,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Brigham & 16,100,000
Women's Hospital)/(Sanwa Bank Ltd., Osaka LOC)
2,000,000 Massachusetts HEFA, (Series A) Weekly VRDNs (Endicott 2,000,000
College)/(BankBoston, N.A. LOC)
3,125,000 Massachusetts HEFA, (Series A) Weekly VRDNs (New England Home 3,125,000
For Little Wanderers)/(BankBoston, N.A. LOC)
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MASSACHUSETTS--CONTINUED
$ 2,000,000 Massachusetts HEFA, (Series B) Weekly VRDNs (Clark $ 2,000,000
University)/(Sanwa Bank Ltd., Osaka LOC)
10,000,000 Massachusetts HEFA, (Series B) Weekly VRDNs (Hallmark
Health 10,000,000 System)/(FSA INS)/(Fleet National Bank,
Springfield, MA LIQ)
2,247,000 Massachusetts HEFA, (Series E) Weekly VRDNs (Williams 2,247,000
College, MA)
8,615,000 Massachusetts HEFA, (Series F) Weekly VRDNs (Children's 8,615,000
Hospital of Boston)
6,000,000 Massachusetts HEFA, 3.50% CP (Harvard University), Mandatory 6,000,000
Tender 5/20/1998
11,000,000 Massachusetts HEFA, 3.50% CP (Harvard University), Mandatory 11,000,000
Tender 5/22/1998
1,300,000 Massachusetts IFA Weekly VRDNs (Groton School)/(National 1,300,000
Westminster Bank, PLC, London LOC)
7,190,000 Massachusetts IFA Weekly VRDNs (Kendall Square Entity)/(State 7,190,000
Street Bank and Trust Co. LOC)
1,910,000 Massachusetts IFA, (1995 Series A) Weekly VRDNs (Bradford 1,910,000
College Issue)/(BankBoston, N.A. LOC)
300,000 Massachusetts IFA, (Series 1992) Weekly VRDNs (Holyoke Water 300,000
Power Co.)/(Canadian Imperial Bank of Commerce, Toronto LOC)
3,300,000 Massachusetts IFA, (Series 1992A) Weekly VRDNs (Ogden 3,300,000
Haverhill)/(Union Bank of Switzerland, Zurich LOC)
14,100,000 Massachusetts IFA, (Series 1992B), 3.65% CP (New England 14,100,000
Power Co.), Mandatory Tender 5/28/1998
4,000,000 Massachusetts IFA, (Series 1992B), 3.70% CP (New England 4,000,000
Power Co.), Mandatory Tender 5/29/1998
5,900,000 Massachusetts IFA, (Series 1994) Weekly VRDNs (Nova Realty 5,900,000
Trust)/(Fleet National Bank, Springfield, MA LOC)
6,000,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard 6,000,000
House)/(Fleet Bank N.A. LOC)
5,800,000 Massachusetts IFA, (Series 1995) Weekly VRDNs (Whitehead 5,800,000
Institute for Biomedical Research)
7,100,000 Massachusetts IFA, (Series 1996) Weekly VRDNs (Newbury 7,100,000
College)/(BankBoston, N.A. LOC)
2,500,000 Massachusetts IFA, (Series 1997) Weekly VRDNs
(Massachusetts 2,500,000 Society for the Prevention of
Cruelty to Animals)/(Fleet National Bank, Springfield, MA
LOC)
6,000,000 Massachusetts IFA, (Series 1997) Weekly VRDNs (Mount Ida 6,000,000
College)/(Credit Local de France LOC)
1,425,000 Massachusetts IFA, (Series A) Weekly VRDNs (Hockomock 1,425,000
YMCA)/(Bank of Nova Scotia, Toronto LOC)
5,430,000 Massachusetts IFA, (Series B) Weekly VRDNs (Williston North 5,430,000
Hampton School)/(National Westminster Bank, PLC, London LOC)
5,755,000 Massachusetts IFA, Revenue Bonds (Series 1995) Weekly VRDNs 5,755,000
(Emerson College Issue)/ (BankBoston, N.A. LOC)
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MASSACHUSETTS--CONTINUED
$ 85,000 Massachusetts IFA, Revenue Bonds (Series 1995C) Weekly VRDNs $ 85,000
(Edgewood Retirement Community Project)/(Dresdner Bank AG,
Frankfurt LOC)
19,000,000 Massachusetts Municipal Wholesale Electric Company, Power 19,000,000
Supply System Revenue Bonds (1994 Series C) Weekly VRDNs
(Canadian Imperial Bank of Commerce, Toronto LOC)
3,700,000 Massachusetts State HFA, (Series 56), 3.85% TOBs, Mandatory 3,700,000
Tender 6/1/1998
2,215,000 Massachusetts Turnpike Authority, (PA-324) Weekly VRDNs (MBIA 2,215,000
INS)/(Merrill Lynch Capital Services, Inc. LIQ)
5,000,000 Massachusetts Turnpike Authority, PT-135 Weekly VRDNs (MBIA 5,000,000
INS)/(Banco Santander LIQ)
8,500,000 Massachusetts Turnpike Authority, Variable Rate Certificates 8,500,000
(Series 1997N) Weekly VRDNs (MBIA INS)/(Bank of America, San
Francisco LIQ)
8,000,000 Massachusetts Water Resources Authority, (Series 1994), 3.50% 8,000,000
CP (Morgan Guaranty Trust Co., New York LOC), Mandatory
Tender 5/22/1998
1,815,000 Middleborough, MA, 4.00% BANs, 3/5/1999 1,819,423
1,076,000 Nahant, MA, 4.20% BANs, 8/26/1998 1,076,665
3,625,000 Newburyport, MA, 4.00% BANs, 2/12/1999 3,630,491
2,600,000 Paxton, MA, 4.25% BANs, 6/19/1998 2,601,186
4,050,000 Quabbin Regional School District, MA, 4.00% BANs, 1/15/1999 4,055,533
2,000,000 Rutland, MA, 4.05% BANs, 6/26/1998 2,000,440
2,250,000 Seekonk, MA, 4.25% BANs, 8/7/1998 2,251,510
2,000,000 Springfield, MA, 4.40% BANs (Fleet National Bank, 2,001,326
Springfield, MA LOC), 6/26/1998
2,000,000 Stow, MA, 3.75% BANs, 3/31/1999 2,001,757
1,424,000 Stow, MA, 4.00% BANs, 3/31/1999 1,428,391
2,000,000 Watertown, MA, 4.25% BANs, 5/13/1998 2,000,193
1,279,000 Westfield, MA, 4.00% BANs, 5/8/1998 1,279,073
3,400,000 Westfield, MA, 4.15% BANs, 10/22/1998 3,407,064
3,600,000 Westfield, MA, 4.20% BANs, 6/26/1998 3,602,969
2,500,000 (b)Weymouth, MA, 4.25% BANs, 11/5/1998 2,502,846
Total 341,607,325
</TABLE>
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--3.4%
$ 8,000,000 Commonwealth of Puerto Rico, (Series 1998A), 4.50% TRANs, $ 8,019,164
7/30/1998
4,000,000 Puerto Rico Electric Power Authority, MERLOTS (Series 1997S) 4,000,000
Weekly VRDNs (MBIA INS)/ (Corestates Bank N.A., Philadelphia,
PA LIQ)
Total 12,019,164
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 353,626,489
</TABLE>
(a)The Fund may only invest in securities rated in one of the two highest
short-term rating categories 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, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, 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) Represents a delayed delivery security.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($353,591,514) at April 30, 1998.
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 IDA --Industrial
Development Authority IFA --Industrial Finance Authority INS --Insured LIQ
- --Liquidity Agreement LOC --Letter of Credit MBIA --Municipal Bond Investors
Assurance MERLOTS --Municipal Exempt Receipts-Liquidity Optional Tender Series
PLC --Public Limited Company TRANs --Tax and Revenue Anticipation Notes TOBs
- --Tender Option Bonds UT --Unlimited Tax VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
MASSACHUSETTS MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 353,626,489
Income receivable 2,542,294
Prepaid expenses 7,159
Total assets 356,175,942
LIABILITIES:
Income distribution payable $ 949,309
Payable to Bank 1,621,420
Accrued expenses 13,699
Total liabilities 2,584,428
NET ASSETS for 353,591,514 shares outstanding $ 353,591,514
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$210,668,646 / 210,669,556 shares outstanding $1.00
BOSTON 1784 FUNDS SHARES:
$142,922,868 / 142,921,958 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
MASSACHUSETTS MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 5,521,748
EXPENSES:
Investment advisory fee $ 773,797
Administrative personnel and services fee 116,720
Custodian fees 7,119
Transfer and dividend disbursing agent fees and expenses 50,889
Directors'/Trustees' fees 1,810
Auditing fees 7,240
Legal fees 2,715
Portfolio accounting fees 47,850
Shareholder services fee--Institutional Service Shares 240,217
Shareholder services fee--Boston 1784 Funds Shares 146,682
Share registration costs 16,290
Printing and postage 10,679
Insurance premiums 2,172
Miscellaneous 2,715
Total expenses 1,426,895
Waivers --
Waiver of investment advisory fee $ (170,262)
Waiver of shareholder services fee--Institutional (240,217)
Service Shares
Waiver of shareholder services fee--Boston 1784 Funds (146,682)
Shares
Total waivers (557,161)
Net expenses 869,734
Net investment income $ 4,652,014
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
MASSACHUSETTS MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 4,652,014 $ 6,125,532
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (2,893,920) (4,462,883)
Boston 1784 Funds Shares (1,758,094) (1,662,649)
Change in net assets resulting from distributions to (4,652,014) (6,125,532)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 575,286,808 682,162,039
Net asset value of shares issued to shareholders in payment of 1,989,005 3,135,034
distributions declared
Cost of shares redeemed (439,390,938) (643,996,755)
Change in net assets resulting from share transactions 137,884,875 41,300,318
Change in net assets 137,884,875 41,300,318
NET ASSETS:
Beginning of period 215,706,639 174,406,321
End of period $ 353,591,514 $ 215,706,639
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.51% 3.09% 3.07% 3.34% 2.14% 1.99%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.55%* 0.55% 0.55% 0.55% 0.55% 0.53%
Net investment income 3.01%* 3.05% 3.02% 3.30% 2.12% 1.97%
Expense waiver/reimbursement(b) 0.36%* 0.40% 0.42% 0.45% 0.35% 0.43%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $210,669 $141,869 $119,739 $99,628 $90,013 $84,524
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
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,
1998 1997 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.50% 3.07% 3.05% 3.30% 2.05% 1.25%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.57%* 0.57% 0.58% 0.60% 0.64% 0.65%*
Net investment income 3.00%* 3.03% 3.01% 3.25% 2.09% 1.85%*
Expense waiver/reimbursement(c) 0.36%* 0.39% 0.42% 0.45% 0.35% 0.43%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $142,923 $73,837 $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)
NOTES TO FINANCIAL STATEMENTS
MASSACHUSETTS MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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. 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.
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 uses the amortized cost method to value its portfolio securities 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.
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, 1998, capital paid-in
aggregated $353,591,514. Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
(unaudited) October 31,
April 30, 1998 1997
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
Shares sold 444,812,744 619,964,162
Shares issued to shareholders in payment of distributions declared 610,949 1,473,299
Shares redeemed (376,623,491) (599,306,953)
Net change resulting from Institutional Service Share transactions 68,800,202 22,130,508
<CAPTION>
Six Months
Ended Year Ended
(unaudited) October 31,
April 30, 1998 1997
<S> <C> <C>
BOSTON 1784 FUNDS SHARES
Shares sold 130,474,064 62,197,877
Shares issued to shareholders in payment of distributions declared 1,378,056 1,661,735
Shares redeemed (62,767,447) (44,689,802)
Net change resulting from Boston 1784 Funds Share transactions 69,084,673 19,169,810
Net change resulting from share transactions 137,884,875 41,300,318
</TABLE>
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, Inc. 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 BankBoston, N.A., the Fund will pay
BankBoston, 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 BankBoston, N.A., may
voluntarily choose to waive any portion of their fees. FSS and BankBoston, N.A.
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, 1998, 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 $177,210,000 and $138,400,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 49.6% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The 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.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not 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. An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
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
[Graphic]
Boston 1784 Funds
Shares
Semi-Annual Report
to Shareholders
April 30, 1998
Money Market Funds
Boston 1784 Tax-Free Money Market Fund
Boston 1784 U.S. Treasury Money Market Fund
Boston 1784 Institutional U.S. Treasury Money Market Fund
Boston 1784 Prime Money Market Fund
Boston 1784 Institutional Prime Money Market Fund
Massachusetts Municipal Cash Trust-Boston 1784 Funds Shares
Bond Funds
Boston 1784 Short-Term Income Fund
Boston 1784 Income Fund
Boston 1784 U.S. Government Medium-Term Income Fund
Tax-Exempt Income Funds
Boston 1784 Tax-Exempt Medium-Term Income Fund
Boston 1784 Connecticut Tax-Exempt Income Fund
Boston 1784 Florida Tax-Exempt Income Fund
Boston 1784 Massachusetts Tax-Exempt Income Fund
Boston 1784 Rhode Island Tax-Exempt Income Fund
Stock Funds
Boston 1784 Asset Allocation Fund
Boston 1784 Growth and Income Fund
Boston 1784 Growth Fund
Boston 1784 International Equity Fund
For more complete information about other Boston 1784 Funds, please call
1-800-BKB-1784 for a prospectus, which you should read carefully before
investing.
Boston 1784 Funds
P.O. Box 8524
Boston, MA 02266-8524
1-800-BKB-1784
www.boston1784funds.com
Federated Securities Corp. is the
distributor for this Fund.
Cusip 314229832
(Federated use only) G00191-02 (6/98)
MF-0158 (6/98)
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, 1997 through April 30, 1998. 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 $0.02
per share.
The fund's net assets reached $57.9 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
An interview with the fund's portfolio manager, Michael Sirianni, CFA, Vice
President, Federated Management
Q. What are your comments on the economy and the interest rate environment
during the fund's six-month reporting period?
A. The economy remained robust over the reporting period, posting a rate of
growth over 3.00% in the fourth quarter of 1997 and continued its above-average
growth into the first quarter of 1998 posting a 4.80% growth rate. At the same
time, overall inflationary pressures remained somewhat tame in spite of the
impressive performance from the economy and historically low unemployment
numbers. Tight labor markets with consequences of wage inflation continued to
occupy the thoughts of the Federal Reserve Board (the "Fed") throughout much of
the reporting period. However, the reporting period coincided with the
realization of an unsteady economic picture in the Pacific Rim. The Asian crisis
and unsteady world stock markets most likely eliminated any rate tightening
intentions the Fed may have had during the fourth quarter of 1997. The Fed
policy continued to remain on hold for much of the first quarter of 1998, with
economic indicators giving somewhat mixed signals. Labor markets continued to
show signs of strength with unemployment at or near historical lows. The key
concern for the Fed in the first quarter and going forward into 1998 is whether
the Asian crisis can sufficiently cool any overheating condition within the U.S.
economy. Signs that the Fed is positioned to act quickly appeared at the end of
the reporting period. The first quarter of 1998 ended with the Fed shifting bias
from a neutral to a tightening stance. The reason for the more hawkish stance is
that the Fed is clearly concerned with sustained growth in gross domestic
product in the 4.00% range. Short-term interest rates traded within a rather
narrow range during the reporting period. Movements in the 1-year Treasury bill
("T-bill") over the period best reveal the market's shifting sentiment. The
1-year T-bill traded in the 5.50% range during November and December of 1997,
steadily fell to the 5.30% range by January through March of 1998, and ended the
reporting period at the 5.40% level.
In addition to economic fundamentals, short-term municipal securities were
strongly influenced by technical factors over this reporting period, notably
calendar year end and income tax payment season. Variable rate demand notes
("VRDNs"), which comprise more than 50% of the fund's assets, started the
reporting period in the 3.80% range, but moved sharply higher in December to
above the 4.00% level as supply and demand imbalances occurred. Yields then
declined in January, as coupon payments looked to reinvest and year end selling
pressures eased, VRDNs yields fell drastically ending the reporting period below
where they began, to the 3.30% range. Yields only averaged a little over 3.10%
during February and March before rising to the 4.00% range in April due to
traditional tax season selling pressures. Over the six-month reporting period,
VRDNs yields averaged roughly 66% of taxable rates making them attractive for
investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 48 days. The fund remained in a 40- to 50-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continue to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, the portfolio attempted 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. This portfolio structure continued to provide a competitive
yield over time.
Q. How did the fund's yield react during the reporting period?
A. The seven-day net yield for the fund on April 30, 1998 was 3.51% compared to
3.18% at the beginning of the reporting period with the increase in yield coming
at the end of the reporting period due in large part to technical factors
relating to tax payment season.* The latest yield was the equivalent of a 5.81%
taxable yield for investors in the highest federal tax bracket.
Q. As we approach mid year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second quarter of 1998, and if the drag on the
U.S. economy is not as great as once feared, expectations of a need for Fed
tightening may then resurface. In the near term market movements will likely
reflect technical as well as fundamental factors. These supply/demand imbalances
could very well present attractive investment opportunities for the fund. We
will continue to watch, with great interest, market developments in order to
best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: TO ELECT TRUSTEES.*
<TABLE>
<CAPTION>
SHARED VOTED SHARES WITHHELD
FOR AUTHORITY
<S> <C> <C>
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
</TABLE>
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
MARYLAND MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
MARYLAND MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.2%
MARYLAND--96.8%
$ 2,000,000 Anne Arundel County, MD, EDRB (Series 1988), 3.65% CP $ 2,000,000
(Baltimore Gas & Electric Co.), Mandatory Tender 6/25/1998
4,175,000 Anne Arundel County, MD, Economic Development Revenue Bonds 4,175,000
(Series 1996) Weekly VRDNs (Atlas Container Corp.
Project)/(Mellon Bank N.A., Pittsburgh LOC)
2,275,000 Baltimore County, MD IDA, (Series 1994A) Weekly VRDNs (Pitts 2,275,000
Realty Limited Partnership)/ (PNC Bank, N.A., Delaware LOC)
2,000,000 Baltimore County, MD IDA, Variable Rate Demand Acquisition 2,000,000
Program (Series 1986) Weekly VRDNs (Baltimore Capital
Acquisition)/(Dai-Ichi Kangyo Bank Ltd., Tokyo LOC)
1,700,000 Baltimore County, MD Port Facility Monthly VRDNs (Occidental 1,700,000
Petroleum Corp.)/(Morgan Guaranty Trust Co., New York LOC)
2,050,000 Baltimore County, MD, Revenue Bonds (1994 Issue) Weekly VRDNs 2,050,000
(Direct Marketing Associates, Inc. Facility)/(First National
Bank of Maryland, Baltimore LOC)
1,300,000 Carroll County, MD, Variable Rate Economic Development 1,300,000
Refunding Revenue Bonds (Series 1995B) Weekly VRDNs (Evapco,
Inc. Project)/(Nationsbank of Maryland, N.A. LOC)
1,000,000 Frederick County, MD, 7.20% Bonds (United States Treasury PRF), 1,051,437
4/1/1999 (@102)
1,500,000 Frederick County, MD, Revenue Bonds (Series 1995) Weekly VRDNs 1,500,000
(Sheppard Pratt Residential Treatment Facility)/(Societe
Generale, Paris LOC)
3,141,000 Harford County, MD, (Series 1989) Weekly VRDNs (Harford Commons 3,141,000
Associates Facility)/ (Nationsbank, N.A., Charlotte LOC)
935,000 Harford County, MD, EDRB (Series 1996) Weekly VRDNs (Citrus and 935,000
Allied Essences Ltd.)/ (First National Bank of Maryland,
Baltimore LOC)
3,305,000 (b)Maryland State Community Development Administration, 3,305,000
(PA-170) Weekly VRDNs (Merrill Lynch Capital Services, Inc.
LIQ)
1,835,000 Maryland State Community Development Administration, (Series 1,835,000
1990A) Weekly VRDNs (College Estates)/(First National Bank of
Maryland, Baltimore LOC)
2,000,000 Maryland State Community Development Administration, (Series 2,000,000
1990B) Weekly VRDNs (Cherry Hill Apartment Ltd.)/(Nationsbank,
N.A., Charlotte LOC)
2,000,000 Maryland State Energy Financing Administration, Annual Tender 2,000,000
Solid Waste Disposal Revenue Refunding Bonds, 4.10% TOBs
(Nevamar Corp.)/(International Paper Co. GTD), Optional Tender
9/1/1998
3,000,000 Maryland State Energy Financing Administration, IDRB (Series 3,000,000
1988) Weekly VRDNs (Morningstar Foods, Inc.)/(First Union
National Bank, North LOC)
2,500,000 Maryland State Energy Financing Administration, Limited 2,500,000
Obligation Variable Rate Demand Revenue Bonds (Series 1996)
Weekly VRDNs (Keywell L.L.C.)/(Bank of America Illinois LOC)
3,000,000 Maryland State IDFA, (Series 1996) Weekly VRDNs (Chesapeake 3,000,000
Biological Labs, Inc.)/(First Union National Bank, Charlotte,
NC LOC)
1,000,000 Maryland State IDFA, Economic Development Revenue Bonds (Series 1,000,000
1996) Weekly VRDNs (Townsend Culinary, Inc.)/(SunTrust Bank,
Atlanta LOC)
</TABLE>
MARYLAND MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MARYLAND--CONTINUED
$ 3,300,000 (b)Maryland State IDFA, Economic Development Revenue Refunding $ 3,300,000
Bonds (Series 1994) Weekly VRDNs (Johnson Controls, Inc.)
1,000,000 Maryland State IDFA, Limited Obligation Economic Development 1,000,000
Revenue Bonds (Series 1994) Weekly VRDNs (Rock-Tenn Converting
Co.)/(SunTrust Bank, Atlanta LOC)
2,000,000 Montgomery County, MD, Consolidated CP BANs (Series 1995), 2,000,000
3.60% CP, Mandatory Tender 5/6/1998
500,000 Montgomery County, MD, EDR Weekly VRDNs (Howard Hughes Medical 500,000
Center)
1,390,000 Prince George's County, MD, 6.125% Bonds, 1/15/1999 1,413,166
1,100,000 Prince George's County, MD, IDRB (Series 1993), 4.05% TOBs 1,100,000
(International Paper Co.), Optional Tender 7/15/1998
1,000,000 Prince George's County, MD, Series A, 6.60% Bonds, 2/1/1999 1,020,812
1,000,000 Washington Suburban Sanitation District, MD, Sewer Disposal 1,004,646
(1st Series), 6.70% Bonds, 7/1/1998
4,000,000 Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs (Field 4,000,000
Container Co. L.P.)/(Northern Trust Co., Chicago, IL LOC)
TOTAL 56,106,061
PUERTO RICO--2.4%
1,400,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 1,400,000 1983A), 3.80% TOBs (Reynolds Metals
Co.)/(ABN AMRO Bank N.V., Amsterdam LOC), Optional Tender
9/1/1998
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 57,506,061
</TABLE>
Securities that are subject to Alternative Minimum Tax represents 52.5% 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 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, MIG-1, or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and
F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING BASED ON TOTAL MARKET VALUE (UNAUDITED)
FIRST TIER SECOND TIER
93.89% 6.11%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, theses securities amounted to
$3,305,000 which represents 5.7% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($57,942,838) at April 30, 1998.
The following acronyms are used throughout this portfolio:
BANs --Bond Anticipation Notes
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)
STATEMENT OF ASSETS AND LIABILITIES
MARYLAND MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 57,506,061
Cash 235,705
Income receivable 361,875
Prepaid expenses 1,200
Deferred organizational costs 6,616
Other assets 3,663
Total assets 58,115,120
LIABILITIES:
Income distribution payable $ 164,223
Accrued expenses 8,059
Total liabilities 172,282
Net Assets for 57,942,838 shares outstanding $ 57,942,838
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$57,942,838 / 57,942,838 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
MARYLAND MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 1,007,981
EXPENSES:
Investment advisory fee $ 133,973
Administrative personnel and services fee 61,987
Custodian fees 1,469
Transfer and dividend disbursing agent fees and expenses 17,103
Directors'/Trustees' fees 1,371
Auditing fees 6,426
Legal fees 2,469
Portfolio accounting fees 19,564
Shareholder services fee 66,986
Share registration costs 11,466
Printing and postage 4,862
Insurance premiums 1,461
Miscellaneous 8,453
Total expenses 337,590
Waivers and reimbursements--
Waiver of investment advisory fee $ (133,973)
Waiver of shareholder services fee (2,679)
Reimbursement of other operating expenses (12,198)
Total waivers and reimbursements (148,850)
Net expenses 188,740
Net investment income $ 819,241
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
MARYLAND MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 819,241 $ 1,396,308
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (819,241) (1,396,308)
SHARE TRANSACTIONS--
Proceeds from sale of shares 83,516,655 143,776,753
Net asset value of shares issued to shareholders in payment of
distributions declared 546,627 1,155,608
Cost of shares redeemed (71,695,207) (153,643,401)
Change in net assets resulting from share transactions 12,368,075 (8,711,040)
Change in net assets 12,368,075 (8,711,040)
NET ASSETS:
Beginning of period 45,574,763 54,285,803
End of period $ 57,942,838 $ 45,574,763
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994(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 0.03 0.01
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (0.03) (0.03) (0.01)
NET ASSET VALUE, END OF PERIOD $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.52% 3.10% 3.11% 3.36% 1.30%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.70%* 0.69% 0.65% 0.65% 0.46%*
Net investment income 3.06%* 3.05% 3.09% 3.30% 2.68%*
Expense waiver/reimbursement(c) 0.56%* 0.63% 0.65% 0.50% 0.53%*
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $57,943 $45,575 $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)
NOTES TO FINANCIAL STATEMENTS
MARYLAND MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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 uses the amortized cost method to value its portfolio securities 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 Investment Company Act of 1940.
Additional information on the restricted security held at April 30, 1998 is as
follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Maryland State Community 12/19/1997 - 4/1/1998 $ 3,305,000
Development Administration (PA-170)
</TABLE>
DEFERRED EXPENSES
The costs incurred by the Fund with respect to registration of its shares in its
first fiscal year, excluding the initial expense of registering its shares, have
been deferred and are being amortized 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.
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, 1998, capital paid-in aggregated $57,942,838. Transactions in capital stock
were as follows:
<TABLE>
<CAPTION>
SIX-MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 83,516,655 143,776,753
Shares issued to shareholders in payment of distributions 546,627 1,155,608
declared
Shares redeemed (71,695,207) (153,643,401)
Net change resulting from share transactions 12,368,075 (8,711,040)
</TABLE>
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, Inc. 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 $45,952 were borne initially by the Adviser. The Fund
has reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five-year period following the Fund's effective
date. For the six months ended April 30,1998, the Fund expensed $6,899 of
organizational expenses.
INTERFUND TRANSACTIONS
During the period ended April 30, 1998, 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 $54,860,000 and $44,190,000, respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 71.0% 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 8.9% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
Maryland Municipal Cash Trust
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
[Graphic]
Federated Investors
Federated Investors, Inc.
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229774
G01175-01 (6/98)
[Graphic]
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, 1997 through April 30, 1998. 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 $180 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 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the period, averaging over 68% of T-bills.
One-year municipal notes, for example, began the reporting period at close to
3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75% by the
end of the year as inflation remained friendly. Yields dropped sharply to 3.60%
in January, and to 3.50% in February due to supply constraints and fears that
the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 47 days. The fund remained in a 45- to 60-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continued to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, the portfolio attempted to
maximize performance through ongoing relative value analysis. Relative value
analysis included the comparison of the richness or cheapness of municipal
securities to one another as well as municipals to taxable instruments, such as
Treasury securities. This portfolio structure continued to provide a competitive
yield over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Service Shares on April
30, 1998, was 3.62% compared to 3.29% at the beginning of the reporting period.*
The latest yield was the equivalent of a 6.46% taxable yield for investors in
the highest federal and state tax brackets. The seven-day net yield for the
fund's Institutional Shares on April 30, 1998, was 3.78% compared to 3.45% at
the beginning of the reporting period.* The latest yield was the equivalent of a
6.75% taxable yield for investors in the highest federal and state tax brackets.
The increase in yields came at the end of the reporting period due in large part
to technical factors relating to tax payment season.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is
not indicative of future results. Yields will vary. Yields quoted for money
market funds closely reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM 1: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts.
PORTFOLIO OF INVESTMENTS
MICHIGAN MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.4%
MICHIGAN--94.9%
$ 4,200,000 Auburn Hills, MI EDC, Limited Obligation Multi-Option Revenue $ 4,200,000
Bonds (Series 1995) Weekly VRDNs (Suburban Tool,
Inc.)/(Huntington National Bank, Columbus, OH LOC)
209,000 Battle Creek, MI Economic Development Corporation, Limited 209,000
Obligation Economic Development Revenue Refunding Bonds
(Series 1992) Weekly VRDNs (Michigan Carton & Paperboard
Co.)/(American National Bank, Chicago LOC)
1,375,000 Bedford Township, MI Economic Development Corp., EDRB (Series 1,375,000
1985) Weekly VRDNs (Form-Tech Steel Inc.)/(KeyBank, N.A. LOC)
2,665,000 Berrien County, MI Economic Development Corp., Economic
2,665,000 Development Refunding Revenue Bonds (Series 1992)
Weekly VRDNs (Arlington Metals Corp.)/(American National
Bank, Chicago LOC)
3,000,000 Bruce Township, MI Hospital Finance Authority, Adjustable Rate 3,000,000
Tender Securities (Series 1988B), 3.70% TOBs (Sisters of
Charity Health Care System)/(MBIA INS)/(Morgan Guaranty Trust
Co., New York LIQ), Optional Tender 5/1/1998
1,000,000 Clarkston Community Schools, MI, (1997 School Building and 1,000,000
Site Bonds), 5.50% Bonds (MBIA INS), 5/1/1998
4,990,000 Davison, MI Community School District, State Aid Notes, 4.00% 4,990,376
RANs, 5/20/1998
750,000 Dearborn, MI Economic Development Corp., (Series 1990) Weekly 750,000
VRDNs (Exhibit Productions, Inc. Project)/(First of America
Bank - Illinois LOC)
2,550,000 Farmington, MI Public School District, 1997 School Building 2,550,000
and Site Refunding Bonds, 5.00% Bonds, 5/1/1998
1,655,000 Ingham County, MI Building Authority, 3.90% Bonds (AMBAC INS), 1,655,385
11/1/1998
2,455,000 Ingham County, MI Economic Development Corp., Adjustable 2,455,000
Demand Limited Obligation Revenue Bonds (Series 1995) Weekly
VRDNs (Martin Luther Memorial Home, Inc.)/(Bank One,
Indianapolis, N.A. LOC)
1,000,000 Jackson County, MI Hospital Finance Authority, Series A, 3.85% 1,000,000
Bonds (W.A. Foote Memorial Hospital, MI)/(AMBAC INS), 6/1/1998
4,500,000 Kalamazoo, MI, 3.70% TANs, 12/1/1998 4,505,302
1,425,000 Macomb County, MI Community College District, Community 1,425,000
College Bonds, (Series 1997), 4.90% Bonds, 5/1/1998
3,400,000 Michigan Higher Education Student Loan Authority, (Series 3,400,000
XII-D) Weekly VRDNs (AMBAC INS)/(Kredietbank N.V., Brussels
LIQ)
1,400,000 Michigan Higher Education Student Loan Authority, Refunding 1,400,000
Revenue Bonds (Series X11-B) Weekly VRDNs (AMBAC
INS)/(Kredietbank N.V., Brussels LIQ)
3,100,000 Michigan Job Development Authority, Limited Obligation Revenue 3,100,000
Bonds Weekly VRDNs (Andersons Project)/(Credit Lyonnais, Paris
LOC)
3,000,000 Michigan Municipal Bond Authority, (Series 1997C), 4.50% RANs, 3,006,639
9/18/1998
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MICHIGAN--CONTINUED
$ 4,500,000 Michigan State Building Authority, (Series 1), 3.80% CP $ 4,500,000
(Canadian Imperial Bank of Commerce, Toronto LOC), Mandatory
Tender 5/7/1998
4,950,000 (b)Michigan State Hospital Finance Authority, (Series 1993A) 4,950,000
PT-169, 3.80% TOBs (St. John Hospital, MI)/(AMBAC INS)/(Banco
Santander LIQ), Mandatory Tender 5/6/1999
2,300,000 Michigan State Hospital Finance Authority, Hospital Equipment 2,300,000
Loan Program Bonds (Series A) Weekly VRDNs (First of America
Bank - Michigan LOC)
3,220,000 (b)Michigan State Housing Development Authority, (Series
3,220,000 1990A) Weekly VRDNs (FSA INS)/ (CDC Municipal
Products, Inc.
LIQ)
300,000 Michigan State Housing Development Authority, (Series 1991) 300,000
Weekly VRDNs (Forest Hills Apartments)/(National Australia
Bank, Ltd., Melbourne LOC)
3,695,000 (b)Michigan State Housing Development Authority, MERLOTs 3,805,935
(Series G) Weekly VRDNs (MBIA INS)/(Corestates Bank N.A.,
Philadelphia, PA LIQ)
1,100,000 Michigan State Housing Development Authority, Revenue Bonds 1,100,000
(Series A), 3.60% CP (Landesbank Hessen-Thueringen, Frankfurt
LOC), Mandatory Tender 7/9/1998
1,800,000 Michigan State, 6.50% Bonds, 12/1/1998 1,829,780 5,000,000
Michigan State, GO UT, 4.50% TRANs, 9/30/1998 5,017,653 2,000,000
Michigan Strategic Fund Weekly VRDNs (Tesco Engineering)/(Bank
2,000,000
of Tokyo-Mitsubishi Ltd. LOC)
6,000,000 Michigan Strategic Fund, (Series 1989) Weekly VRDNs (Hi-Lex 6,000,000
Controls Inc.)/(Bank of Tokyo-Mitsubishi Ltd. LOC)
5,620,000 Michigan Strategic Fund, (Series 1991) Weekly VRDNs (AGA Gas, 5,620,000
Inc.)/(Svenska Handelsbanken, Stockholm LOC)
900,000 Michigan Strategic Fund, (Series 1995) Weekly VRDNs (Rood 900,000
Industries, Inc. Project)/(NBD Bank, Michigan LOC)
1,500,000 Michigan Strategic Fund, Adjustable Rate Demand IDRB's Weekly 1,500,000
VRDNs (Bruin Land Holdings LLC)/(Huntington National Bank,
Columbus, OH LOC)
2,500,000 Michigan Strategic Fund, Adjustable Rate Limited Obligation 2,500,000
Revenue and Revenue Refunding Bonds (Series 1996) Weekly VRDNs
(C-Tec, Inc.)/(SunTrust Bank, Atlanta LOC)
850,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 850,000
(Series 1995) Weekly VRDNs (Rowe Thomas Company
Project)/(Comerica Bank, Detroit, MI LOC)
1,600,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 1,600,000
(Series 1994) Weekly VRDNs (Wilkie Metal Products,
Inc.)/(Norwest Bank Minnesota, N.A. LOC)
4,420,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 4,420,000
(Series 1995) Weekly VRDNs (Bear Lake Associates Project)/(Old
Kent Bank & Trust Co., Grand Rapids LOC)
885,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 885,000
(Series 1995) Weekly VRDNs (Hercules Drawn Steel Corporation
Project)/(KeyBank, N.A. LOC)
3,875,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 3,875,000
(Series 1995) Weekly VRDNs (J.R. Automation Technologies
Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC)
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MICHIGAN--CONTINUED
$ 965,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds $ 965,000
(Series 1995) Weekly VRDNs (RSR Project)/(Old Kent Bank &
Trust Co., Grand Rapids LOC)
8,500,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 8,500,000
(Series 1995) Weekly VRDNs (United Waste Systems, Inc.)/(Bank
of America Illinois LOC)
4,710,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 4,710,000
(Series 1995) Weekly VRDNs (Wayne Disposal-Oakland, Inc.
Project)/(Comerica Bank, Detroit, MI LOC)
800,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 800,000
(Series 1996) Weekly VRDNs (ACI Properties, L.L.C.
Project)/(Comerica Bank, Detroit, MI LOC)
865,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 865,000
(Series 1996) Weekly VRDNs (Akemi, Inc.)/(Comerica Bank,
Detroit, MI LOC)
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 1,000,000
(Series 1996) Weekly VRDNs (Echo Properties, L.L.C.
Project)/(Comerica Bank, Detroit, MI LOC)
2,500,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 2,500,000
(Series 1996) Weekly VRDNs (G & T Real Estate Investments Co.,
L.L.C.)/(NBD Bank, Michigan LOC)
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 1,000,000
(Series 1996) Weekly VRDNs (Inalfa-Hollandia, Inc.)/(Comerica
Bank, Detroit, MI LOC)
3,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 3,000,000
(Series 1996) Weekly VRDNs (RMT Woodworth, Inc.)/(Comerica
Bank, Detroit, MI LOC)
4,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 4,000,000
(Series 1997) Weekly VRDNs (Enprotech Mechanical Services,
Inc.)/(Michigan National Bank, Farmington Hills LOC)
1,500,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 1,500,000
(Series 1997A) Weekly VRDNs (EPI Printers, Inc.)/(Comerica
Bank, Detroit, MI LOC)
5,670,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 5,670,000
Weekly VRDNs (Hess Industries, Inc.)/(Norwest Bank Minnesota,
N.A. LOC)
1,610,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds, 1,610,000
Series 1995 Weekly VRDNs (Welch Properties Project)/(Old Kent
Bank & Trust Co., Grand Rapids LOC)
2,025,000 Michigan Strategic Fund, Variable Rate Demand Limited 2,025,000
Obligation Revenue Bonds (Series 1996) Weekly VRDNs (R.H.
Wyner Associates, Inc.)/(State Street Bank and Trust Co. LOC)
2,450,000 Michigan Strategic Fund, Variable Rate Demand Limited 2,450,000
Obligation Revenue Bonds (Series 1998) Weekly VRDNs (Monroe
Publishing Co.)/(Comerica, Inc. LOC)
3,995,000 (b)Monroe County, MI Pollution Control Authority, (PT-143)
3,995,000 Weekly VRDNs (Detroit Edison Co.)/ (FGIC
INS)/(Commerzbank AG, Frankfurt LIQ)
3,480,000 (b)Monroe County, MI Pollution Control Authority, (Series 3,480,000
CDC-1997M) Weekly VRDNs (Detroit Edison Co.)/(AMBAC INS)/(CDC
Municipal Products, Inc. LIQ)
7,455,000 (b)Monroe County, MI Pollution Control Authority, PT-108 7,455,000
Weekly VRDNs (Detroit Edison Co.)/ (FGIC INS)/(Merrill Lynch
Capital Services, Inc. LIQ)
3,000,000 Oakland County, MI EDC, Limited Obligation Revenue Bonds 3,000,000
(Series 1997) Weekly VRDNs (Stone Soap Company,
Inc.)/(Michigan National Bank, Farmington Hills LOC)
</TABLE>
MICHIGAN MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MICHIGAN--CONTINUED
$ 1,000,000 Rochester, MI Community School District, 3.85% Bonds (MBIA $ 1,000,000
INS), 5/1/1998
4,975,000 Southgate Community School District, MI, State Aid Notes, 4,977,421
4.125% RANs, 6/25/1998
2,000,000 Utica, MI Community Schools, 4.10% Bonds (FGIC INS), 5/1/1998 2,000,000
4,365,000 Wayne County, MI Downriver Sewage Disposal System, (1994 4,365,000
Series B), 3.50% CP (Wayne County, MI)/(Comerica Bank,
Detroit, MI LOC), Mandatory Tender 6/16/1998
TOTAL 170,727,491
PUERTO RICO--4.5%
3,000,000 Commonwealth of Puerto Rico, (Series 1998A), 4.50% TRANs, 3,007,186
7/30/1998
2,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (1983 2,002,275
Series A), 4.00% TOBs (Merck & Co., Inc.), Optional Tender
12/1/1998
1,075,000 Puerto Rico Industrial, Medical & Environmental PCA, Pollution 1,075,000
Control Facilities Financing Authority (Series 1983 A), 3.75%
TOBs (Schering Plough Corp.)/(Morgan Guaranty Trust Co., New
York LOC), Optional Tender 12/1/1998
2,065,000 Puerto Rico Municipal Finance Agency, Revenue Bonds, Series B, 2,067,118
4.50% Bonds, 7/1/1998
TOTAL 8,151,579
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 178,879,070
</TABLE>
Securities that are subject to Alternative Minimum Tax represents 74% 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 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, MIG-1 or MIG-2 by Moody's Investors Service,
Inc., or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING 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, 1998, these securities amounted
to $26,905,935 which represents 15% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($179,984,710) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation CP --Commercial Paper EDC
- --Economic Development Commission EDRB --Economic Development Revenue Bonds FGIC
- --Financial Guaranty Insurance Company FSA --Financial Security Assurance GO
- --General Obligation IDRB --Industrial Development Revenue Bond INS --Insured
LIQ --Liquidity Agreement LLC --Limited Liability Corporation LOC --Letter of
Credit MBIA --Municipal Bond Investors Assurance MERLOTS --Municipal Exempt
Receipts--Liquidity Option Tender Series PCA --Pollution Control Authority RANs
- --Revenue Anticipation Notes TANs --Tax Anticipation Notes TOBs --Tender Option
Bonds TRANs --Tax and Revenue Anticipation Notes UT --Unlimited Tax VRDNs
- --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
MICHIGAN MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 178,879,070
Income receivable 1,653,375
Deferred expenses 5,803
Deferred organizational costs 9,218
Total assets 180,547,466
LIABILITIES:
Income distribution payable $ 516,429
Payable to Bank 2,683
Accrued expenses 43,644
Total liabilities 562,756
Net Assets for 179,984,710 shares outstanding $ 179,984,710
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$166,855,675 / 166,855,675 shares outstanding $1.00
INSTITUTIONAL SHARES:
$13,129,035 / 13,129,035 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
MICHIGAN MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,335,633
EXPENSES:
Investment advisory fee $ 441,046
Administrative personnel and services fee 75,589
Custodian fees 5,074
Transfer and dividend disbursing agent fees and expenses 58,571
Directors'/Trustees' fees 840
Auditing fees 6,360
Legal fees 3,801
Portfolio accounting fees 30,953
Shareholder services fee--Institutional Service Shares 200,649
Shareholder services fee--Institutional Shares 19,874
Share registration costs 19,398
Printing and postage 9,670
Insurance premiums 2,095
Miscellaneous 5,329
Total expenses 879,249
Waivers --
Waiver of investment advisory fee $ (302,008)
Waiver of shareholder services fee--Institutional (72,234)
Service Shares
Waiver of shareholder services fee--Institutional Shares (19,874)
Total waivers (394,116)
Net expenses 485,133
Net investment income $ 2,850,500
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
MICHIGAN MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 2,850,500 $ 4,245,771
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (2,585,080) (3,793,687)
Institutional Shares (265,420) (452,084)
Change in net assets resulting from distributions to (2,850,500) (4,245,771)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 479,498,870 843,340,942
Net asset value of shares issued to shareholders in payment of 1,743,163 2,986,927
distributions declared
Cost of shares redeemed (461,732,948) (789,741,373)
Change in net assets resulting from share transactions 19,509,085 56,586,496
Change in net assets 19,509,085 56,586,496
NET ASSETS:
Beginning of period 160,475,625 103,889,129
End of period $ 179,984,710 $ 160,475,625
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995(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 0.03 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.61% 3.27% 3.26% 1.35%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.56%* 0.55% 0.50% 0.32%*
Net investment income 3.22%* 3.22% 3.21% 3.67%*
Expense waiver/reimbursement(c) 0.43%* 0.51% 0.76% 1.63%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $166,856 $147,105 $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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997 1996(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 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.69% 3.43% 2.19%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.40%* 0.40% 0.37%*
Net investment income 3.35%* 3.39% 3.40%*
Expense waiver/reimbursement(c) 0.59%* 0.66% 0.89%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $13,129 $13,370 $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)
NOTES TO FINANCIAL STATEMENTS
MICHIGAN MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 the stability of principal and liquidity.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Michigan State Hospital Finance Authority 4/16/1998 $ 4,950,000
(Series 1993A)
Michigan State Housing Development Authority 9/4/1997 3,220,000
(Series 1990A)
Michigan State Housing Development Authority 4/1/1998 3,695,000
(Series G)
Monroe County, MI Pollution Control Authority, 11/3/1997 3,995,000
(PT-143)
Monroe County, MI Pollution Control Authority, 6/9/1997 3,480,000
(Series CDC-1997M)
Monroe County, MI Pollution Control Authority, 4/9/1998 7,455,000
PT-108
DEFERRED EXPENSES
The costs incurred by the Fund with respect to registration of its shares in its
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.
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, 1998, capital paid-in aggregated $179,984,710.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six-Months
Ended Year Ended
Institutional Service Shares April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 446,971,049 780,908,072
Shares issued to shareholders in payment of distributions declared 1,729,019 2,956,463
Shares redeemed (428,949,740) (729,034,645)
Net change resulting from Institutional Service Share transactions 19,750,328 54,829,890
<CAPTION>
Six-Months
Ended Year Ended
Institutional Shares April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 32,527,821 62,432,870
Shares issued to shareholders in payment of distributions declared 14,144 30,464
Shares redeemed (32,783,208) (60,706,728)
Net change resulting from Institutional Share transactions (241,243) 1,756,606
Net change resulting from share transactions 19,509,085 56,586,496
</TABLE>
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, Inc. 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 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 $18,618 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, 1998,
the Fund paid $2,881 pursuant to this agreement.
INTERFUND TRANSACTIONS
During the period ended April 30, 1998, 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 $203,000,000 and $236,365,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 82% 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% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not 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.
[Graphic]
Michigan Municipal Cash Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229667
Cusip 314229725
G01456-02 (6/98)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Minnesota
Municipal Cash Trust, a protfolio of Federated Municipal Trust, which covers the
six-month period from November 1, 1997 through April 30, 1998. 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 Cash Series 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 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
$0.01 per share for Cash Series Shares and $0.02 per share for Institutional
Shares. The fund's net assets surpassed the $500 million mark, reaching $544
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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities -- particularly Treasury bills
("T-bills")-- were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year, tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs")were strongly influenced by technical factors over this reporting
period, most notably calendar year-end and income tax payments in April. VRDNs,
which comprise more than 50% of the fund's assets, started the reporting period
at a yield of 3.80% but moved sharply higher in December to above 4.00% as
supply and demand imbalances occurred. Yields fell again in January and February
as strong demand fueled municipal purchases while supply remained somewhat
limited. In late March and April, cash flow redemptions due to income tax
payments moved yields higher to above 4.50%. Over the reporting period, VRDN
yields averaged 66% or more of taxable rates making them generally attractive
over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund's average maturity at the beginning of the reporting period was
approximately 33 days. The fund remained in a 30- to 60-day average maturity
range over the reporting period, a neutral stance, and moved within that range
according to relative value opportunities. We continued to emphasize a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, the portfolio attempted to
maximize performance through ongoing relative value analysis. Relative value
analysis included the comparison of the richness or cheapness of municipal
securities to one another as well as municipals to taxable instruments, such as
treasury securities. This portfolio structure continued to pursue a competitive
yield over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Cash Series Shares and Institutional
Shares on April 30, 1998, were 3.37% and 3.87% compared to 3.01% and 3.51% at
the beginning of the reporting period with the increase in yield coming at the
end of the reporting period due in large part to technical factors relating to
tax payment season.* The latest yields were the equivalent of 6.09% and 7.04%
taxable yields for Cash Series Shares and Institutional Shares, respectively,
for investors in the highest federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the funds current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: TO ELECT TRUSTEES.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts.
PORTFOLIO OF INVESTMENTS
MINNESOTA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.6%
MINNESOTA--94.9%
$ 2,300,000 Albert Lea, MN Independent School District No. 241, Tax $ 2,303,753
Anticipation Certificates, 4.00% TANs (Minnesota State GTD),
10/24/1998
5,600,000 Anoka City, MN Solid Waste Disposal Authority, 3.65% CP 5,600,000
(United Power Associates)/(National Rural Utilities
Cooperative Finance Corp. GTD), Mandatory Tender 8/12/1998
1,950,000 Anoka, MN, Multifamily Housing Revenue Bonds Weekly VRDNs 1,950,000
(Walker Plaza Project)/(U.S. Bank, N.A., Minneapolis LOC)
3,685,000 Apple Valley, MN, IDRB (Series 1995) Weekly VRDNs (AV 3,685,000
Development Co. Project)/(Firstar Bank, Minnesota LOC)
2,060,000 Baudette, MN, IDR (Series 1989) Weekly VRDNs (Reid Powell, 2,060,000
Inc.)/(Nationsbank, N.A., Charlotte LOC)
5,500,000 Becker, MN, PCR (Series 1992A), 3.55% CP (Northern States 5,500,000
Power Co.), Mandatory Tender 6/18/1998
9,900,000 Becker, MN, PCR (Series 1993-B), 3.45% CP (Northern States 9,900,000
Power Co.), Mandatory Tender 6/12/1998
6,700,000 Becker, MN, PCR (Series 1993A & B), 3.55% CP (Northern
States 6,700,000 Power Co.), Mandatory Tender 6/11/1998
9,500,000 Becker, MN, PCR (Series 1993A & B), 3.55% CP (Northern
States 9,500,000 Power Co.), Mandatory Tender 7/21/1998
5,000,000 Becker, MN, PCR (Series 1993A & B), 3.70% CP (Northern
States 5,000,000 Power Co.), Mandatory Tender 7/16/1998
4,000,000 Becker, MN, PCR (Series 1993A & B), 3.70% CP (Northern
States 4,000,000 Power Co.), Mandatory Tender 7/16/1998
500,000 Beltrami County, MN, Environmental Control Authority Daily 500,000
VRDNs (Northwood Panelboard Co.)/(Union Bank of Switzerland,
Zurich LOC)
1,400,000 Beltrami County, MN, Environmental Control Authority, (Series 1,400,000
1995) Daily VRDNs (Northwood Panelboard Co.)/(Union Bank of
Switzerland, Zurich LOC)
2,855,000 Blaine, MN, Industrial Development Revenue Bonds (Series 2,855,000
1996) Weekly VRDNs (S & S of Minnesota, LLC Project)/(Norwest
Bank Minnesota, N.A. LOC)
2,000,000 Bloomington, MN Port Authority, Special Tax Revenue Refunding 2,000,000
Bonds (Series 1996B) Weekly VRDNs (Mall of America)/(FSA
INS)/(Credit Local de France LIQ)
7,500,000 Bloomington, MN, 4.75% Bonds, 12/1/1998 7,542,741
2,900,000 Bloomington, MN, IDRB (Series 1995) Weekly VRDNs (Now 2,900,000
Technologies, Inc. Project)/(Norwest Bank Minnesota, N.A.
LOC)
5,000,000 Bloomington, MN, Multi-Family Housing Weekly VRDNs
5,000,000 (Crow/Bloomington Apartments)/(Citibank N.A.,
New York LOC)
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 8,000,000 Burnsville, MN, Variable Rate Demand Revenue Bonds (Series $ 8,000,000
1996) Weekly VRDNs (YMCA Projects)/(Norwest Bank Minnesota,
N.A. LOC)
3,740,000 Burnsville, MN, Adjustable Rate IDRB (Series 1996) Weekly 3,740,000
VRDNs (Caire, Inc. Project)/(Bank One, Wisconsin, N.A. LOC)
3,895,000 Byron, MN IDB Weekly VRDNs (Schmidt Printing)/(Norwest Bank 3,895,000
Minnesota, N.A. LOC)
1,240,000 Chanhassen, MN IDA, (Series 1995) Weekly VRDNs (Building 1,240,000
Management Group, L.L.C. Project)/(Norwest Bank Minnesota,
N.A. LOC)
5,000,000 Cloquet, MN, Industrial Facilities Revenue Bonds (Series 5,000,000
1996A) Weekly VRDNs (Potlatch Corp.)/(Credit Suisse First
Boston LOC)
2,800,000 Coon Rapids, MN Hospital Authority, (Series 1985) Weekly 2,800,000
VRDNs (Health Central System)/(U.S. Bank, N.A., Minneapolis
LOC)
3,380,000 Coon Rapids, MN, (Series 1996) Weekly VRDNs (Medical
3,380,000 Enterprise Associates Project)/(Norwest Bank
Minnesota, N.A.
LOC)
2,350,000 Cottage Grove, MN, IDR Refunding Bonds (Series 1995)
Weekly 2,350,000 VRDNs (Supervalu Inc.)/(Wachovia Bank of
Georgia N.A., Atlanta LOC)
10,745,000 (b)Dakota County & Washington County MN Housing & 10,745,000
Redevelopment Authority, MERLOTs (Series J), 4.00% TOBs
(United States Treasury COL)/(Corestates Bank N.A.,
Philadelphia, PA LIQ), Optional Tender 6/1/1998
1,865,000 Dakota County, MN Housing & Redevelopment Authority,
1,865,000 Multifamily Rental Housing Revenue Bonds (Series
1994-B) Weekly VRDNs (Westwood Ridge Senior Residence
Project)/(U.S.
Bank, N.A., Minneapolis LOC)
3,000,000 (b)Dakota County, Washington County & Anoka City, MN Housing 3,000,000
& Redevelopment Authority, MERLOTs (Series H), 4.00% TOBs
(United States Treasury COL)/(Corestates Bank N.A.,
Philadelphia, PA LIQ), Optional Tender 6/1/1998
9,000,000 Duluth, MN, Certificates of Indebtedness (Series 1998), 3.98% 9,014,529
TANs, 12/31/1998
810,000 Eden Prairie, MN IDA, #194 Weekly VRDNs (Richard W. Cohen 810,000
Project)/(Norwest Bank Minnesota, N.A. LOC)
1,255,000 Eden Prairie, MN IDA, (Series 1996) Weekly VRDNs (Challenge 1,255,000
Printing, Inc. Project)/(Norwest Bank Minnesota, N.A. LOC)
1,360,000 Eden Prairie, MN IDA, (Series 1995) Weekly VRDNs (Robert 1,360,000
Lothenbach Project)/(Norwest Bank Minnesota, N.A. LOC)
850,000 Elk River, MN Weekly VRDNs (Tescom Project)/(Norwest Bank 850,000
Minnesota, N.A. LOC)
2,500,000 Faribault, MN ISD No. 656, 3.75% TANs (Minnesota State GTD), 2,503,292
3/30/1999
2,945,000 Farmington, MN, (Series 1996) Weekly VRDNs (Lexington
2,945,000 Standard Corporation Project)/(Norwest Bank
Minnesota, N.A.
LOC)
7,200,000 Hennepin Co. MN, (Series 1995C) Weekly VRDNs 7,200,000
7,250,000 Hennepin Co. MN, (Series 1996C) Weekly VRDNs 7,250,000
7,100,000 Hubbard County, MN, Solid Waste Disposal (Series 1990) Weekly 7,100,000
VRDNs (Potlatch Corp.)/(Credit Suisse First Boston LOC)
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 5,600,000 Lino Lakes, MN, Variable Rate Demand IDRBs (Series 1997) $ 5,600,000
Weekly VRDNs (Taylor Corp.)/(Norwest Bank Minnesota, N.A.
LOC)
1,000,000 (b)MN Insured Municipal Securities Trust, Series 1996A, 1,000,000
Floating Rate Certificates Weekly VRDNs (Eden Prairie MN, ISD
272)/(MBIA INS) / (Norwest Bank Minnesota, N.A. LIQ)
1,125,000 (b)MN Insured Municipal Securities Trust, Series 1996B, 1,125,000
Floating Rate Certificates Weekly VRDNs (Eden Prairie MN, ISD
272)/(MBIA INS) /(Norwest Bank Minnesota, N.A. LIQ)
2,500,000 (b)MN Insured Municipal Securities Trust, Series 1996H, 2,500,000
Floating Rate Certificates Weekly VRDNs (St. Louis Park, MN
Health Care Facilities)/(AMBAC INS)/(Norwest Bank Minnesota,
N.A. LIQ)
2,250,000 (b)MN Municipal Securities Trust, Series 1996D, Floating Rate 2,250,000
Certificates Weekly VRDNs (North St. Paul-Maplewood, MN ISD
622)/(Norwest Bank Minnesota, N.A. LIQ)
5,000,000 (b)MN Municipal Securities Trust, Series 1996F, Floating Rate 5,000,000
Certificates Weekly VRDNs (Benedictine Health System)
/(Connie Lee INS)/(Norwest Bank Minnesota, N.A. LIQ)
4,000,000 (b)MN Municipal Securities Trust, Series 1996H, Floating Rate 4,000,000
Certificates Weekly VRDNs (Rosemount, MN ISD 196)/(FSA
INS)/(Norwest Bank Minnesota, N.A. LIQ)
3,900,000 Maple Grove, MN IDA, (Series 1991A) Weekly VRDNs (Eagle 3,900,000
Ridge, MN Apartments)/(Sumitomo Bank Ltd., Osaka LOC)
3,000,000 Maple Grove, MN IDA, (Series 1991B) Weekly VRDNs (Eagle 3,000,000
Ridge, MN Apartments)/(Sumitomo Bank Ltd., Osaka LOC)
3,600,000 Maple Grove, MN, Variable Rate Demand IDRBs (Series 1998) 3,600,000
Weekly VRDNs (Spancrete Midwest Co.)/(Norwest Bank Minnesota,
N.A. LOC)
1,000,000 Maplewood, MN, (Series 1997) Weekly VRDNs (Camada Ltd. 1,000,000
Partnership)/(Norwest Bank Minnesota, N.A. LOC)
2,025,000 Maplewood, MN, Multi-Family Housing (Series 1993) Weekly 2,025,000
VRDNs (Silver Ridge Project)/(Federal Home Loan Bank of
Chicago LOC)
2,580,000 Mendota Heights, MN, Multi-Family Revenue Bonds Weekly VRDNs 2,580,000
(Lexington Heights Apartments)/(Sumitomo Bank Ltd., Osaka
LOC)
5,500,000 Minneapolis CDA, Refunding Revenue Bonds Weekly VRDNs 5,500,000
(Riverplace Project (The Pinnacle Apartments))/(Sumitomo Bank
Ltd., Osaka LOC)
680,000 Minneapolis, MN IDA Weekly VRDNs (JTJ Co.)/(U.S. Bank, N.A., 680,000
Minneapolis LOC)
4,500,000 Minneapolis, MN, (Series 1993) Weekly VRDNs (Market Square 4,500,000
Real Estate, Inc.)/(Norwest Bank Minnesota, N.A. LOC)
6,000,000 Minneapolis, MN, (Series 1995B) Weekly VRDNs 6,000,000
3,330,000 Minneapolis, MN, (Series 1998), 4.50% Bonds, 3/1/1999 3,353,267
13,500,000 Minneapolis, MN, Housing Development Revenue Refunding Bonds 13,500,000
(Series 1988) Weekly VRDNs (Symphony Place) / (Citibank N.A.,
New York LOC)
900,000 Minneapolis, MN, Variable Rate Demand Commercial Development 900,000
Revenue Refunding Bonds (Series 1996) Weekly VRDNs (WNB &
Company Project)/(U.S. Bank, N.A., Minneapolis LOC)
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 10,165,000 Minneapolis, MN, Variable Rate Housing Revenue Bonds Weekly $ 10,165,000
VRDNs (One Ten Grant Project)/(U.S. Bank, N.A., Minneapolis
LOC)
9,570,000 Minneapolis, MN, Various Purpose Bonds (Series 1996) Weekly 9,570,000
VRDNs (Bayerische Vereinsbank AG, Munich LIQ)
4,900,000 Minneapolis, MN, Various Purpose Bonds (Series 1997B) Weekly 4,900,000
VRDNs (Bayerische Vereinsbank AG, Munich LIQ)
3,520,000 (b)Minneapolis/St. Paul MN Housing Finance Board, SFM
Revenue 3,520,000 Bonds, MERLOTs (Series D), 4.10% TOBs
(GNMA COL)/(Corestates Bank N.A., Philadelphia, PA LIQ),
Optional Tender 7/1/1998
8,000,000 Minnesota Agricultural and Economic Development Board, 8,000,000
(Series 1996) Weekly VRDNs (Evangelical Lutheran Good
Samaritan Society)/(Rabobank Nederland, Utrecht LOC)
8,000,000 Minnesota State Commissioner of Iron Range Resources & 8,000,000
Rehabilitation, (Series 1991) Weekly VRDNs (Louisiana-Pacific
Corp.)/(Wachovia Bank of NC, N.A., Winston-Salem LOC)
5,000,000 Minnesota State HFA, Convertible Single Family Mortgage 5,000,000
(Series M), 3.80% TOBs, Mandatory Tender 12/10/1998
615,000 Minnesota State HFA, Convertible Single Family Mortgage Bonds 615,000
(Series N), 3.90% TOBs, Mandatory Tender 12/10/1998
3,800,000 Minnesota State Higher Education Coordinating Board, (Series 3,800,000
1992A) Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ)
7,000,000 Minnesota State Higher Education Coordinating Board, 1992 7,000,000
(Series B) Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ)
12,700,000 Minnesota State Higher Education Coordinating Board, 1992 12,700,000
(Series C) Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ)
6,500,000 Minnesota State Higher Education Coordinating Board, 1992 6,500,000
(Series C) Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ)
10,000,000 Minnesota State, (Series A), 5.00% Bonds (AMBAC INS), 10,019,622
6/30/1998
11,705,000 Minnesota State, 4.625% Bonds, 8/1/1998 11,729,175
1,860,000 Minnesota State, 4.70% Bonds, 8/1/1998 1,864,149
1,000,000 Minnesota State, 4.80% Bonds, 8/1/1998 1,002,903
1,500,000 Minnesota State, 4.90% Bonds, 8/1/1998 1,504,047
1,500,000 Minnesota State, 5.00% Bonds, 11/1/1998 1,508,579
5,000,000 Minnesota State, 5.50% Bonds, 8/1/1998 5,020,042
2,400,000 Minnesota State, 7.00% Bonds (United States Treasury PRF), 2,418,879
8/1/1998 (@100)
5,000,000 Minnesota Tax and Aid Anticipation Borrowing Program, (Series 5,000,000
1997B), 3.85% TANs (Minnesota State GTD), 9/3/1998
7,145,000 Minnesota Tax and Aid Anticipation Borrowing Program, (Series 7,145,000
1998A), 3.65% TANs (Minnesota State GTD), 2/9/1999
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 10,000,000 Minnesota Tax and Aid Anticipation Borrowing Program, (Series $ 10,028,429
1998B), 3.90% TANs (Minnesota State GTD), 3/4/1999
1,085,000 Minnetonka, MN, IDRB (Series 1996) Weekly VRDNs (PGI Cos., 1,085,000
Inc.)/(Norwest Bank Minnesota, N.A. LOC)
5,900,000 Minnetonka, MN, Multifamily Housing Revenue Refunding Bonds 5,900,000
(Series 1995) Weekly VRDNs (Southampton Apartments Project
(MN))/(National Bank of Canada, Montreal LOC)
1,300,000 New Brighton, MN, IDR Weekly VRDNs (Unicare Homes, 1,300,000
Inc.)/(Banque Paribas, Paris LOC)
1,000,000 New Hope, MN IDRB, (Series 1994) Weekly VRDNs (Gaines and 1,000,000
Hanson Printing Co.)/(Norwest Bank Minnesota, N.A. LOC)
3,290,000 New Hope, MN Weekly VRDNs (Paddock Labs)/(U.S. Bank, N.A., 3,290,000
Minneapolis LOC)
5,150,000 Olmsted County, MN Building Authority, Certificates of 5,150,000
Participation Weekly VRDNs (Human Services
Infrastructure)/(Toronto-Dominion Bank LOC)
900,000 Perham, MN IDA Weekly VRDNs (Land O' Lakes, Inc.)/(Rabobank 900,000
Nederland, Utrecht LOC)
1,250,000 Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Norwest Bank 1,250,000
Minnesota, N.A. LOC)
3,500,000 Plymouth, MN, IDRB (Series 1994) Weekly VRDNs (Olympic
Steel, 3,500,000 Inc.)/(National City Bank, Ohio LOC)
1,200,000 Port Authority of Saint Paul, MN, (Series 1998A) Weekly VRDNs 1,200,000
(Bix Fruit Co.)/(Firstar Bank, Milwaukee LOC)
2,500,000 Port Authority of Saint Paul, MN, Variable Rate Demand
IDRBs 2,500,000 (Series 1998A) Weekly VRDNs (National
Checking Co.)/(U.S.
Bank, N.A., Minneapolis LOC)
925,000 Port of Austin, MN Weekly VRDNs (Mower House Color)/(Norwest 925,000
Bank Minnesota, N.A. LOC)
2,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs 2,000,000
(Mayo Foundation)/(Rabobank Nederland, Utrecht LIQ)
1,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs 1,000,000
(Mayo Foundation)/(Rabobank Nederland, Utrecht LIQ)
500,000 Rogers, MN IDA Weekly VRDNs (Metal Sales Manufacturing 500,000
Corp.)/(KeyBank, N.A. LOC)
2,625,000 Rogers, MN IDA, IDRB Weekly VRDNs (DAC Development, LLC 2,625,000
Project)/(Norwest Bank Minnesota, N.A. LOC)
21,950,000 Rosemount, MN, PCR (Series 1984) Weekly VRDNs (Koch Refining 21,950,000
Co.)
8,000,000 Shakopee, MN Hospital Finance Authority Weekly VRDNs (St. 8,000,000
Francis Regional Medical Center)/(Citibank N.A., New York
LOC)
940,000 Southern Minnesota Municipal Power Agency, (Series 1991A), 948,886
5.10% Bonds (FGIC INS), 1/1/1999
6,500,000 Southern Minnesota Municipal Power Agency, 3.50% CP, 6,500,000
Mandatory Tender 5/8/1998
5,000,000 Southern Minnesota Municipal Power Agency, 3.65% CP, 5,000,000
Mandatory Tender 5/8/1998
5,500,000 Southern Minnesota Municipal Power Agency, 3.80% CP, 5,500,000
Mandatory Tender 8/11/1998
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 1,245,000 St. Cloud, MN Housing & Redevelopment Authority, Revenue $ 1,245,000
Refunding Bonds (Series 1994A) Weekly VRDNs (Coborn's
Incorporated Project)/(Norwest Bank Minnesota, N.A. LOC)
2,400,000 St. Cloud, MN Housing & Redevelopment Authority, Revenue 2,400,000
Refunding Bonds (Series 1994B) Weekly VRDNs (Coborn's
Incorporated Project)/(Norwest Bank Minnesota, N.A. LOC)
5,800,000 St. Cloud, MN, (Series 1997-A) Weekly VRDNs (The Saint Cloud 5,800,000
Hospital)/(Rabobank Nederland, Utrecht LOC)
7,400,000 St. Louis Park, MN Health Care Facilities, Floating Rate 7,400,000
Monthly Demand IDRB's (Series 1984) Weekly VRDNs (Unicare
Homes, Inc.)/(Banque Paribas, Paris LOC)
4,600,000 St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs 4,600,000
(District Cooling St. Paul, Inc.)/(Credit Local de France
LOC)
400,000 St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs 400,000
(United Way)/ (U.S. Bank, N.A., Minneapolis LOC)
100,000 St. Paul, MN Housing & Redevelopment Authority, (Series 1994) 100,000
Weekly VRDNs (Minnesota Children's Museum)/(U.S. Bank, N.A.,
Minneapolis LOC)
2,000,000 St. Paul, MN Housing & Redevelopment Authority, District 2,000,000
Cooling Revenue Bonds (1995 Series I) Weekly VRDNs (Credit
Local de France LOC)
5,000,000 St. Paul, MN Port Authority, (Series 1991) Weekly VRDNs (West 5,000,000
Gate Office)/(U.S. Bank, N.A., Minneapolis LOC)
1,000,000 Steele County, MN, IDRB (Series 1994) Weekly VRDNs
(Blount, 1,000,000 Inc.)/(Nationsbank, N.A., Charlotte
LOC)
10,000,000 (b)VRDC/IVRC Trust, Tax-Exempt Variable Rate Demand 10,000,000
Certificates (Series 1997A) Weekly VRDNs (Regents of
University of Minnesota)/(Citibank N.A., New York LIQ)
3,300,000 Victoria, MN, IDRB, (Series 1996A) Weekly VRDNs (HEI, Inc. 3,300,000
Project)/(Norwest Bank Minnesota, N.A. LOC)
1,235,000 Victoria, MN, Industrial Development Revenue Bonds, (Series 1,235,000
1996B) Weekly VRDNs (HEI, Inc. Project)/(Norwest Bank
Minnesota, N.A. LOC)
5,500,000 Washington County, MN Housing & Redevelopment Authority, 5,500,000
(Series 90) Weekly VRDNs (Granada Pond Apartments)/(Sumitomo
Bank Ltd., Osaka LOC)
2,100,000 Wells, MN, 4.125% TOBs (Stokely, Inc.)/(Corestates Bank
N.A., 2,100,000 Philadelphia, PA LOC), Optional Tender
6/1/1998
1,000,000 Western Minnesota Municipal Power Agency, MN, 10.25% Bonds 1,042,423
(United States Treasury PRF), 1/1/1999 (@100)
2,500,000 Western Minnesota Municipal Power Agency, MN, Transmission 2,500,000
Project (Series 1997 A), 4.25% BANs, 1/1/1999
</TABLE>
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 975,000 White Bear, MN Weekly VRDNs (Thermoform Plastic, $ 975,000
Inc.)/(Norwest Bank Minnesota, N.A. LOC)
2,025,000 White Bear, MN, Variable Rate Demand Industrial Revenue Bonds 2,025,000
Weekly VRDNs (N.A. Ternes Project)/(Firstar Bank, Minnesota
LOC)
2,000,000 Winsted, MN IDA Weekly VRDNs (Sterner Lighting 2,000,000
Systems)/(Fleet National Bank, Springfield, MA LOC)
&NBSP;&NBSP;&NBSP;&NBSP;TOTAL 516,369,716
PUERTO RICO--4.7%
3,197,694 (b)ABN AMRO Chicago Corp. 1997A LeaseTOPS Trust, Weekly VRDNs 3,197,694
(ABN AMRO Bank N.V., Amsterdam LIQ)/(State Street Bank and
Trust Co. LOC)
5,000,000 (b)Commonwealth of Puerto Rico, (Series 1992A) P-Floats
5,000,000 PT-140, 3.65% TOBs (FSA INS)/(Commerzbank AG,
Frankfurt LIQ), Mandatory Tender 1/14/1999
6,000,000 Commonwealth of Puerto Rico, (Series 1998A), 4.50% TRANs, 6,014,374
7/30/1998
11,290,000 (b)Commonwealth of Puerto Rico, Municipal Securities Trust 11,290,000
Receipts, (Series 1998-CMC4) Weekly VRDNs (MBIA INS) / (Chase
Manhattan Corp. LIQ)
TOTAL 25,502,068
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 541,871,784
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 27.4% 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 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, MIG-1 or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and F-2
by Fitch IBCA, 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, 1998, these securities amounted to
$62,627,694 which represents 11.5% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($544,037,983) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BANs --Bond Anticipation
Notes CDA --Community Development Administration COL --Collateralized CP
- --Commercial Paper FGIC --Financial Guaranty Insurance Company FSA --Financial
Security Assurance GNMA --Government National Mortgage Association GTD
- --Guaranty HFA --Housing Finance Authority IDA --Industrial Development
Authority IDB --Industrial Development Bond IDR --Industrial Development Revenue
IDRB --Industrial Development Revenue Bond INS --Insured ISD --Independent
School District LIQ --Liquidity Agreement LLC --Limited Liability Corporation
LOC --Letter of Credit MBIA --Municipal Bond Investors Assurance MERLOTS
- --Municipal Exempt Receipts Liquidity Optional Tender Series PCR --Pollution
Control Revenue PRF --Prerefunded SFM --Single Family Mortgage 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)
STATEMENT OF ASSETS AND LIABILITIES
MINNESOTA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 541,871,784
Cash 267,592
Income receivable 3,617,734
Prepaid expenses 13,090
Total assets 545,770,200
LIABILITIES:
Income distribution payable $ 1,595,839
Accrued expenses 136,378
Total liabilities 1,732,217
Net Assets for 544,037,983 shares outstanding $ 544,037,983
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$312,217,852 / 312,217,852 shares outstanding $1.00
CASH SERIES SHARES:
$231,820,131 / 231,820,131, shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
MINNESOTA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 10,133,089
EXPENSES:
Investment advisory fee $ 1,088,121
Administrative personnel and services fee 205,148
Custodian fees 16,496
Transfer and dividend disbursing agent fees and 90,608
expenses
Directors'/Trustees' fees 2,510
Auditing fees 6,770
Legal fees 5,177
Portfolio accounting fees 62,696
Distribution services fee--Cash Series Shares 632,515
Shareholder services fee--Institutional Shares 363,854
Shareholder services fee--Cash Series Shares 316,257
Share registration costs 15,466
Printing and postage 9,449
Insurance premiums 3,487
Miscellaneous 3,018
Total expenses 2,821,572
Waivers--
Waiver of investment advisory fee $ (684,658)
Waiver of distribution services fee--Cash Series Shares (316,257)
Waiver of shareholder services fee--Institutional (363,854)
Shares
Total waivers (1,364,769)
Net expenses 1,456,803
Net investment income $ 8,676,286
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
MINNESOTA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 8,676,286 $ 14,244,131
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (4,974,051) (7,772,322)
Cash Series Shares (3,702,235) (6,471,809)
Change in net assets resulting from distributions to (8,676,286) (14,244,131)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 801,839,790 1,220,304,237
Net asset value of shares issued to shareholders in payment 3,158,569 6,706,186
of distributions declared
Cost of shares redeemed (690,552,794) (1,250,475,198)
Change in net assets resulting from share transactions 114,445,565 (23,464,775)
Change in net assets 114,445,565 (23,464,775)
NET ASSETS:
Beginning of period 429,592,418 453,057,193
End of period $ 544,037,983 $ 429,592,418
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--CASH SERIES SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.01) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.46% 2.97% 2.97% 3.41% 2.17% 2.02%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.80%* 0.80% 0.80% 0.70% 0.71% 0.71%
Net investment income 2.93%* 2.92% 2.93% 3.37% 2.15% 2.01%
Expense waiver/reimbursement(b) 0.50%* 0.51% 0.51% 0.62% 0.61% 0.44%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $231,820 $221,227 $235,614 $131,471 $94,335 $67,521
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.04 0.03 0.02
LESS DISTRIBUTIONS
Distributions from net investment (0.02) (0.03) (0.03) (0.04) (0.03) (0.02)
income
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.72% 3.48% 3.49% 3.82% 2.58% 2.43%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30%* 0.30% 0.30% 0.30% 0.31% 0.31%
Net investment income 3.42%* 3.42% 3.43% 3.77% 2.55% 2.40%
Expense waiver/reimbursement(b) 0.50%* 0.51% 0.51% 0.52% 0.34% 0.34%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $312,218 $208,365 $217,443 $212,392 $159,704 $165,865
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
MINNESOTA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 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.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
ACQUISITION ACQUISITION
SECURITY DATE COST
Dakota County & Washington County MN Housing &
Redevelopment Authority, MERLOTS (Series J) 3/1/98 10,745,000
Dakota County, Washington County, & Anoka City, MN
Housing & Redevelopment Authority MERLOTS (Series H) 3/1/98 3,000,000
MN Insured Municipal Securities Trust Series 1996A 6/11/96 1,000,000
MN Insured Municipal Securities Trust, Series 1996B 6/11/96 1,250,000
MN Insured Municipal Securities Trust, Series 1996H 5/1/96 2,500,000
MN Municipal Securities Trust, Series 1996D 6/11/98 2,250,000
MN Municipal Securities Trust, Series 1996F 11/6/96 5,000,000
MN Municipal Securities Trust, Series 1996H 5/1/96 4,000,000
Minneapolis/St. Paul MN Housing Finance Board,
SFM Revenue Bonds 4/1/98 3,520,000
VRDC/IVRC Trust, Tax Exempt Variable Rate Demand Certicates 11/30/97 10,000,000
ABN AMRO Chicago Corp. 1997A Lease TOPS Trust 11/15/97 3,197,694
Commonwealth of Puerto Rico, Municipal Securities Trust Receipts 1/8/98 3,197,694
Commonwealth of Puerto Rico, (Series 1992A) 1/28/98 5,000,000
Commonwealth of Puerto Rico, Municipal Securities 4/15/98 11,290,000
Trust Receipts
</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.
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, 1998, capital paid-in aggregated $544,037,983.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SHARES 1998 1997
<S> <C> <C>
Shares sold 431,356,846 596,921,325
Shares issued to shareholders in payment of distributions 173,024 323,548
declared
Shares redeemed (327,677,511) (606,322,424)
Net change resulting from Institutional Share 103,852,359 (9,077,551)
transactions
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
CASH SERIES SHARES 1998 1997
<S> <C> <C>
Shares sold 370,482,944 623,382,912
Shares issued to shareholders in payment of distributions 2,985,545 6,382,638
declared
Shares redeemed (362,875,283) (644,152,774)
Net change resulting from Cash Series Share 10,593,206 (14,387,224)
transactions
Net change resulting from share transactions 114,445,565 (23,464,775)
</TABLE>
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, Inc. 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
according 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 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.
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, 1998, the Fund engaged in purchase and sales
transactions with funds that have a common investment adviser (or affiliated
advisers), common Directors/Trustees, and/or common Officers. These purchases
and sale transactions were made at current market value pursuant to Rule 17a-7
under the Act amounting to $457,517,340 and $407,292,340, respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 55.0% 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 14.0% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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
[Graphic]
Federated Investors
Minnesota Municipal Cash Trust
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
314229873
314229402
1052807 (6/98)
[Graphic]
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, 1997 through April 30, 1998. The report begins
with a discussion with the fund's portfolio manager, followed by a complete
listing of the fund's holdings and its financial statements. Financial
highlights tables are provided for the fund's Institutional Shares and
Institutional Service Shares.
The fund is a convenient way to put your ready cash to work pursuing double
tax-free income -- free from federal regular income tax and New Jersey personal
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.
The fund's 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 both Institutional Shares and Institutional Service Shares. Its
net assets totaled $220 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 on a daily basis. 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities -- particularly Treasury bills
("T-bills") -- were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 50- to 70-day average maturity range over the
reporting period, a neutral to positive stance, and moved within that range
according to relative value opportunities. We continued to employ a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Shares on April 30,
1998, was 3.46% compared to 3.20% at the beginning of the reporting period.* The
increase in yield was due in large part to technical factors related to income
tax payments by individuals in April. The latest yield was the equivalent to a
6.40% taxable yield for investors in the highest federal and state tax brackets.
For the Institutional Service Shares, the seven-day net yield was 3.36% on April
30, 1998, compared to 3.10% at the beginning of the reporting period.* The
latest yield was equivalent to a taxable yield of 6.22% for investors in the
highest federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yields will vary. Yields quoted for money market funds most closely
reflect the funds current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: TO ELECT TRUSTEES*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
NEW JERSEY MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.4%
NEW JERSEY--91.7%
$ 700,000 Atlantic County, NJ Improvement Authority Weekly VRDNs $ 700,000
(Marine Midland Bank N.A., Buffalo, NY LOC)
2,400,000 Berlin Township, NJ, 4.125% BANs, 6/25/1998 2,400,781
3,756,000 Bloomingdale Borough, NJ, 3.85% BANs, 3/12/1999 3,760,668
1,830,000 Bordentown, NJ, 4.00% BANs, 6/1/1998 1,830,385
3,285,000 Burlington, NJ, (Series 1997), 4.25% BANs, 10/20/1998 3,289,455
1,645,000 Camden County, NJ Improvement Authority, (Series 1995) Weekly 1,645,000
VRDNs (Jewish Federation of Southern Jersey, Inc.)/(National
Westminster Bank, PLC, London LOC)
4,900,000 (b)Camden County, NJ Improvement Authority, (Series 1996) 4,900,000
Weekly VRDNs (Parkview Redevelopment Housing
Project)/(General Electric Capital Corp. LOC)
4,620,000 (b)Clipper New Jersey Tax-Exempt Trust, (Series 1996-2) 4,620,000
Weekly VRDNs (New Jersey Housing & Mortgage Financing
Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ)
1,078,010 Franklin Township, NJ, 4.25% BANs, 8/19/1998 1,079,101
1,581,598 Haddonfield, NJ, 4.45% BANs, 6/5/1998 1,582,298
1,000,000 Harrison, NJ, 4.25% BANs, 5/28/1998 1,000,212
3,844,018 High Bridge Borough, NJ, 4.375% BANs, 9/4/1998 3,848,795
2,302,650 Hopatcong, NJ, 4.25% BANs, 6/12/1998 2,303,558
1,200,000 Jackson Township, NJ, 4.25% BANs, 12/15/1998 1,202,668
3,172,788 Lakewood Township, NJ, 3.875% BANs, 4/15/1999 3,177,885
3,000,000 Lakewood Township, NJ, 4.00% BANs, 1/22/1999 3,006,314
3,003,750 Lavallette Borough, NJ, 4.00% BANs, 2/26/1999 3,010,904
2,000,000 Longport, NJ, 3.95% BANs, 8/28/1998 2,001,280
3,040,000 Lumberton Township, NJ, (Series A), 3.83% BANs, 9/25/1998 3,041,540
2,185,593 Maple Shade Township, NJ, 4.25% BANs, 5/8/1998 2,185,736
900,000 Mercer County, NJ Improvement Authority Weekly VRDNs (Mercer 900,000
County, NJ Pooled Governmental Loan Program)/(Credit Suisse
First Boston LOC)
1,500,000 Middlesex County, NJ PCFA Weekly VRDNs (FMC Gold 1,500,000
Co.)/(Wachovia Bank of NC, N.A., Winston-Salem LOC)
2,885,616 Monroe Township, NJ, 3.80% BANs, 2/23/1999 2,889,018
3,912,887 Monroe Township, NJ, 4.00% BANs, 5/15/1998 3,913,261
2,220,000 Monroe Township, NJ, 4.375% BANs, 7/30/1998 2,221,976
1,900,000 Montclair Township, NJ, 4.00% BANs, 1/22/1999 1,905,345
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NEW JERSEY--CONTINUED
$ 5,373,000 New Jersey EDA Weekly VRDNs (Meridan Health Care)/(First $ 5,373,000
National Bank of Maryland, Baltimore LOC)
4,170,000 New Jersey EDA Weekly VRDNs (Molins Machines)/(Nationsbank, 4,170,000
N.A., Charlotte LOC)
915,000 New Jersey EDA Weekly VRDNs (Nash Group)/(Chase Manhattan 915,000
Bank N.A., New York LOC)
1,980,000 New Jersey EDA, (1994 Series A), 4.30% TOBs (A.F.L.
Quality, 1,980,000 Inc.)/(Fleet Bank N.A. LOC), Optional
Tender 6/24/1998
440,000 New Jersey EDA, (1994 Series B), 4.30% TOBs (Two Univac, 440,000
L.L.C.)/(Fleet Bank N.A. LOC), Optional Tender 6/24/1998
4,100,000 New Jersey EDA, (Series 1985) Weekly VRDNs (Seton Co.)/(First 4,100,000
Union National Bank, Charlotte, NC LOC)
3,900,000 New Jersey EDA, (Series 1986) Weekly VRDNs (Ridgefield 3,900,000
Associates)/(Bank of Tokyo- Mitsubishi Ltd. LOC)
300,000 (b)New Jersey EDA, (Series 1987G) Weekly VRDNs (W.Y. Urban 300,000
Renewal)/(National Westminster Bank, PLC, London LOC)
1,950,000 New Jersey EDA, (Series 1988-F) Weekly VRDNs (Lamington 1,950,000
Corners Associates)/ (First Union National Bank, North LOC)
1,000,000 New Jersey EDA, (Series 1992D-1) Weekly VRDNs (Danlin 1,000,000
Corp.)/(Banque Nationale de Paris LOC)
2,725,000 New Jersey EDA, (Series 1992L) Weekly VRDNs (Kent Place 2,725,000
School)/(Banque Nationale de Paris LOC)
1,401,000 New Jersey EDA, (Series 1995) Weekly VRDNs (Filtra 1,401,000
Corporation Project)/ (Chase Manhattan Bank N.A., New York
LOC)
2,580,000 New Jersey EDA, (Series 1995) Weekly VRDNs (International 2,580,000
Vitamin Corporation Project)/ (National Westminster Bank,
PLC, London LOC)
4,605,000 New Jersey EDA, (Series 1996) Weekly VRDNs (R. Realty 4,605,000
Company)/(First Union National Bank, Charlotte, NC LOC)
2,325,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Lauffer Building 2,325,000
Associates, Ltd.)/(Credit Suisse First Boston LOC)
1,775,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Building 1,775,000
Associates, Ltd.)/(Credit Suisse First Boston LOC)
1,800,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland 1,800,000
Industrial Associates, Ltd.)/(Credit Suisse First Boston LOC)
2,500,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Okner Parkway 2,500,000
Associates Ltd. Partnership)/ (Credit Suisse First Boston
LOC)
3,500,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Phoenix Realty 3,500,000
Partners)/(Corestates Bank N.A., Philadelphia, PA LOC)
1,700,000 (b)New Jersey EDA, (Series 1997) Weekly VRDNs (UJA
Federation 1,700,000 of Bergan County and North Hudson,
Inc.)/(Bank of New York, New York LOC)
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NEW JERSEY--CONTINUED
$ 2,500,000 New Jersey EDA, (Series 1997) Weekly VRDNs (Wood Hollow $ 2,500,000
Associates, L.L.C.)/ (Corestates Bank N.A., Philadelphia, PA
LOC)
2,000,000 New Jersey EDA, (Series 1998) Weekly VRDNs (Job Haines 2,000,000
Home)/(PNC Bank, N.A. LOC)
1,300,000 New Jersey EDA, (Series 1998) Weekly VRDNs (St. James 1,300,000
Preparatory School & St. James Social Service Corp.)/(First
Union National Bank, North LOC)
1,500,000 New Jersey EDA, (Series 1998B) Weekly VRDNs (New Jersey 1,500,000
Natural Gas Co.)/ (AMBAC INS)/(Bank of New York, New York
LIQ)
1,160,000 New Jersey EDA, (Series A) Weekly VRDNs (325 Midland Avenue, 1,160,000
LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York
LOC)
505,000 New Jersey EDA, (Series B) Weekly VRDNs (325 Midland Avenue, 505,000
LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York
LOC)
920,000 New Jersey EDA, (Series B) Weekly VRDNs (Greater Trenton 920,000
CMHC, Inc.)/(Corestates N.J. National Bank, Ewing Township
LOC)
900,000 New Jersey EDA, (Series D-1) Weekly VRDNs (The Hibbert 900,000
Company)/(Corestates N.J. National Bank, Ewing Township LOC)
680,000 New Jersey EDA, (Series W) Weekly VRDNs (Datatec Industries, 680,000
Inc.)/(Banque Nationale de Paris LOC)
2,815,000 New Jersey EDA, Economic Development Bonds Weekly VRDNs 2,815,000
(Atlantic States Cast Iron Pipe Co.)/(Amsouth Bank N.A.,
Birmingham LOC)
3,000,000 New Jersey EDA, Newark Recycling & Composting Co. (Series 3,000,000
1997), 3.95% TOBs (Societe Generale, Paris), Mandatory Tender
12/15/1998
4,800,000 New Jersey EDA, Port Facility Revenue Bonds (Series 1983) 4,800,000
Weekly VRDNs (Trailer Marine Transport Corp.)/(Chase
Manhattan Bank N.A., New York LOC)
2,400,000 (b)New Jersey EDA, Trust Receipts (Series 1998 FR/RI-34) 2,400,000
Weekly VRDNs (New Jersey- American Water Co., Inc.)/(FGIC
INS)/(Bank of New York, New York LIQ)
3,100,000 New Jersey Health Care Facilities Financing Authority, 3,100,000
(Series 1997) Weekly VRDNs (Christian Health Care
Center)/(Valley National Bank, Passaic, NJ LOC)
10,650,000 (b)New Jersey Housing & Mortgage Financing Authority, CDC 10,650,000
Municipal Products Class A Certificates (Series 1996B) Weekly
VRDNs (MBIA INS)/(CDC Municipal Products, Inc. LIQ)
1,500,000 (b)New Jersey State Transportation Trust Fund Agency, Trust 1,500,000
Receipts (Series 1996-1) Weekly VRDNs (MBIA INS)/(Bank of New
York, New York LIQ)
3,980,000 (b)New Jersey State, (CDC Series 1997L) Weekly VRDNs (CDC 3,980,000
Municipal Products, Inc. LIQ)
4,100,000 New Jersey State, (Series Fiscal 1998A), 3.45% CP (Bank of 4,100,000
Nova Scotia, Toronto and Commerzbank AG, Frankfurt LIQs),
Mandatory Tender 6/15/1998
7,500,000 New Jersey State, (Series Fiscal 1998A), 3.63% CP (Bank of 7,500,000
Nova Scotia, Toronto and Commerzbank AG, Frankfurt LIQs),
Mandatory Tender 6/9/1998
3,000,000 New Jersey State, (Series Fiscal 1998A), 3.65% CP (Bank of 3,000,000
Nova Scotia, Toronto and Commerzbank AG, Frankfurt LIQs),
Mandatory Tender 5/26/1998
2,203,300 Pine Hill Borough, NJ, (Series B), 3.96% BANs, 8/7/1998 2,203,638
</TABLE>
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NEW JERSEY--CONTINUED
$ 1,018,953 Point Pleasant, NJ, 4.375% BANs, 8/6/1998 $ 1,019,935
1,021,244 Point Pleasant, NJ, 4.375% BANs, 9/17/1998 1,022,647
1,111,738 Point Pleasant, NJ, 4.375% BANs, 9/17/1998 1,114,513
10,000,000 Port Authority of New York and New Jersey, (Series 1991-4) 10,000,000
Weekly VRDNs
1,685,000 Seaside Heights Borough, NJ, (Series B), 4.25% BANs, 1,688,806
11/5/1998
2,100,000 Stafford Township, NJ, 4.125% BANs, 5/15/1998 2,100,219
1,500,000 Stafford Township, NJ, 4.375% BANs, 5/15/1998 1,500,152
4,100,000 Wall Township, NJ, 4.00% BANs, 3/19/1999 4,110,113
4,421,802 Washington Borough, NJ, 4.25% BANs, 12/11/1998 4,430,918
1,400,000 Washington Township, NJ, 4.10% BANs, 8/6/1998 1,400,713
TOTAL 201,856,834
GUAM--1.4%
3,000,000 (b)Guam Power Authority, MERLOTS (Revenue Bonds, Series F) 3,000,000
Weekly VRDNs (AMBAC INS)/(Corestates Bank N.A., Philadelphia,
PA LIQ)
PUERTO RICO--6.3%
8,794,758 (b)Commonwealth of Puerto Rico Municipal Revenues Collection 8,794,758
Center, 1997A LeaseTOPS Trust Weekly VRDNs (ABN AMRO Bank
N.V., Amsterdam LIQ)/(State Street Bank and Trust Co. LOC)
5,000,000 Government Development Bank for Puerto Rico (GDB), 3.45% CP, 5,000,000
Mandatory Tender 7/9/1998
TOTAL 13,794,758
TOTAL INVESTMENTS (AT AMORTIZED $ 218,651,592
COST)(C)
</TABLE>
Securities that are subject to Alternative Minimum Tax represents 25.1% of the
portfolio 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 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, MIG-1, or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and
F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (unaudited)
FIRST TIER SECOND TIER
96.90% 3.40%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted to
$41,844,758 which represents 19.0% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($220,096,034) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BANs --Bond Anticipation
Notes CP --Commercial Paper EDA --Economic Development Authority FGIC
- --Financial Guaranty Insurance Company INS --Insured LIQ --Liquidity Agreement
LLC --Limited Liability Corporation LOC --Letter of Credit MBIA --Municipal Bond
Investors Assurance
MERLOTS --Municipal Exempt Receipt - Liquidity Optional Tender Series
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)
STATEMENT OF ASSETS AND LIABILITIES
NEW JERSEY MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 218,651,592
Income receivable 2,577,212
Prepaid expenses 4,677
Total assets 221,233,481
LIABILITIES:
Income distribution payable $ 602,649
Payable to Bank 519,556
Accrued expenses 15,242
Total liabilities 1,137,447
Net Assets for 220,096,034 shares outstanding $ 220,096,034
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$149,639,882 / 149,639,732 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$70,456,152 / 70,456,302 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
NEW JERSEY MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,915,335
EXPENSES:
Investment advisory fee $ 423,986
Administrative personnel and services fee 78,120
Custodian fees 5,519
Transfer and dividend disbursing agent fees and expenses 26,718
Directors'/Trustees' fees 1,242
Auditing fees 6,491
Legal fees 4,575
Portfolio accounting fees 36,191
Distribution services fee--Institutional Service Shares 30,151
Shareholder services fee--Institutional Shares 189,615
Shareholder services fee--Institutional Service Shares 75,376
Share registration costs 13,379
Printing and postage 6,903
Insurance premiums 3,235
Taxes 1,293
Miscellaneous 2,665
Total expenses 905,459
Waivers --
Waiver of investment advisory fee $ (75,670)
Waiver of distribution services fee--Institutional (30,151)
Service Shares
Waiver of shareholder services fee--Institutional Shares (151,692)
Waiver of shareholder services fee--Institutional (30,151)
Service Shares
Total waivers (287,664)
Net expenses 617,795
Net investment income $ 3,297,540
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
NEW JERSEY MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 3,297,540 $ 5,218,833
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (2,380,051) (4,020,737)
Institutional Service Shares (917,489) (1,198,096)
Change in net assets resulting from distributions to (3,297,540) (5,218,833)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 406,838,759 561,976,671
Net asset value of shares issued to shareholders in payment of 567,686 1,135,725
distributions declared
Cost of shares redeemed (354,255,550) (540,696,148)
Change in net assets resulting from share transactions 53,150,895 22,416,248
Change in net assets 53,150,895 22,416,248
NET ASSETS:
Beginning of period 166,945,139 144,528,891
End of period $ 220,096,034 $ 166,945,139
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR
APRIL 30, ENDED
OCTOBER 31,
1998 1997 1996 1995 1994 1993**
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.57% 3.18% 3.17% 3.46% 2.26% 2.22%
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.55%* 0.55% 0.55% 0.55% 0.54% 0.46%
Net investment income 3.14%* 3.13% 3.13% 3.41% 2.22% 2.19%
Expense
waiver/reimbursement(b) 0.27%* 0.31% 0.37% 0.41% 0.39% 0.45%
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $149,640 $112,407 $115,722 $86,944 $62,984 $66,346
</TABLE>
* Computed on an annualized basis.
** Prior to October 6, 1993, the fund provided three classes of shares.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993**
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.52% 3.08% 3.07% 3.36% 2.16% 2.12%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.65%* 0.65% 0.65% 0.65% 0.65% 0.56%
Net investment income 3.04%* 3.08% 3.03% 3.28% 2.19% 2.08%
Expense waiver/reimbursement(b) 0.27%* 0.31% 0.37% 0.41% 0.41% 0.45%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $70,456 $54,538 $28,807 $29,817 $36,704 $21,005
</TABLE>
* Computed on an annualized basis.
** Prior to October 6, 1993, the fund provided three classes of shares.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
NEW JERSEY MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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 uses the amortized cost method to value its portfolio securities 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 Investment Company Act of 1940.
Additional information on each restricted security held at April 30, 1998, is as
follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Guam Power Authority, MERLOTS (Revenue 12/8/1997 $3,000,000
Bond, Series F)
Camden County, NJ Improvement 7/11/1996 4,900,000
Authority, (Series 1996)
Clipper New Jersey Tax-Exempt Trust, 4/19/1996 4,620,000
(Series 1996-2)
New Jersey EDA, Trust Receipts (Series 6/30/1997 - 2,400,000
1998) 7/1/1997
New Jersey EDA, (Series 1988-F) 6/3/1991 300,000
New Jersey EDA, (Series 1997) 7/3/1997 1,700,000
New Jersey Housing & Mortgage Finance 4/1/1997 10,650,000
Authority
New Jersey State Transportation Trust 6/15/1997 1,500,000
Fund Agency, Trust Receipts (Series
1996-1)
New Jersey State, (CDC Series 1997L) 5/22/1997 3,980,000
Commonwealth of Puerto Rico Municipal 10/15/1997 - 8,794,758
Revenues Collection Center, 1997A 10/17/1997
LeaseTOPS Trust
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
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, 1998, capital paid-in aggregated $220,096,034.
Transactions in shares were as follows:
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SHARES 1998 1997
Shares sold 283,744,541 385,242,860
Shares issued to shareholders in
payment of distributions declared 17,173 321,415
Shares redeemed (246,528,723) (388,879,537)
Net change resulting from
Institutional Share transactions 37,232,991 (3,315,262)
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INSTITUTIONAL SERVICE SHARES 1998 1997
Shares sold 123,094,218 176,733,811
Shares issued to shareholders in
payment of distributions declared 550,512 814,310
Shares redeemed (107,726,826) (151,816,611)
Net change resulting from
Institutional Service Share
transactions 15,917,904 25,731,510
Net change resulting from share
transactions 53,150,895 22,416,248
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, Inc. for the period. The
administrative fee received during the period of the Administrative Services
Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
DISTRIBUTION SERVICES FEE
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Fund will compensate Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of the
Fund to finance activities intended to result in the sale of the Fund's
Institutional Service Shares. The Plan provides that the Fund may incur
distribution expenses up to 0.10% of the average daily net assets of the
Institutional Service 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 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.
PORTFOLIO ACCOUNTING FEES
FServ maintains the 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, 1998, 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 $152,376,098 and $152,500,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 50.7% 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 7.67% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
[Graphic]
Federated Investors
New Jersey Municipal Cash Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS APRIL 30, 1998
[Graphic]
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229600
Cusip 314229709
2052902 (6/98)
[Graphic]
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, 1997, through April 30, 1998. 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 $0.02 per share for Cash II Shares.
The fund's net assets totaled $523.9 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 40- to 55-day average maturity range over the
reporting period, a neutral to positive stance, and moved within that range
according to relative value opportunities. We continued to employ a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to pursue a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Service Shares on April
30, 1998, was 3.60%* compared to 3.22% at the beginning of the reporting period.
The increase in yield was due in part to technical factors related to income tax
payments by individuals in April. The latest yield was the equivalent to a 6.72%
taxable yield for investors in the highest federal, state, and city tax
brackets. For the Cash II Shares, the seven-day net yield was 3.44%* on April
30, 1998, compared to 3.04% at the beginning of the reporting period. The latest
yield was equivalent to a taxable yield of 6.42% for investors in the highest
federal, state, and city tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
returns. 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. Yields quoted for money market funds most
closely reflect the fund's current earnings.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
NEW YORK MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.2%
NEW YORK--94.9%
$ 4,760,000 Albany City School District, NY, 4.00% TANs, 11/30/1998 $ 4,770,742
9,195,000 (b)Albany County Airport Authority, NY, Trust Receipts 9,195,000
(Series 1997 FR/RI-7) Weekly VRDNs (FSA INS)/(Bank of New
York, New York LIQ)
5,000,000 Allegany-Limestone, NY Central School District, 4.05% BANs, 5,004,161
12/30/1998
9,000,000 Broadalbin-Perth, NY Central School District, 3.80% BANs, 9,010,617
2/24/1999
3,500,000 Buffalo, NY, 4.40% RANs (Landesbank Hessen-Thueringen, 3,505,209
Frankfurt LOC), 8/5/1998
1,425,000 Cattaraugus County, NY IDA, (Series 1996A) Weekly VRDNs 1,425,000
(Gier's Farm Service, Inc. Project)/ (KeyBank, N.A. LOC)
1,800,000 Chautauqua County, NY IDA Weekly VRDNs (Cliffstar 1,800,000
Corp.)/(KeyBank, N.A. LOC)
3,900,000 Chautauqua County, NY IDA Weekly VRDNs (Mogen David Wine 3,900,000
Corp.)/(Wells Fargo Bank, N.A. LOC)
900,000 Colonie, NY IDA Weekly VRDNs (Herbert S. Ellis)/(Marine 900,000
Midland Bank N.A., Buffalo, NY LOC)
655,000 Colonie, NY IDA, (Series 1988) Weekly VRDNs (Specialty 655,000
Retailers, Inc.)/(Marine Midland Bank N.A., Buffalo, NY LOC)
3,100,000 Colonie, NY IDA, 4.00% TOBs (800 North Pearl 3,100,000
Associates)/(Fleet Bank N.A. LOC), Optional Tender
12/1/1998
4,720,000 Corinth, NY IDA, Solid Waste Disposal Revenue Bonds (Series 4,720,000
A), 3.80% TOBs (International Paper Co.), Optional Tender
3/1/1999
1,300,000 Dutchess County, NY IDA, Series 1995 Weekly VRDNs (Laerdal 1,300,000
Medical Corp.)/(Bank of New York, New York LOC)
2,250,000 Erie County, NY IDA, (Series A) Weekly VRDNs
(Gemcor)/(Marine 2,250,000 Midland Bank N.A., Buffalo, NY
LOC)
5,000,000 Erie County, NY IDA, IDRB (Series 1994) Weekly VRDNs 5,000,000
(Servotronics, Inc. Project)/(Fleet Bank N.A. LOC)
6,000,000 Farmingdale, NY Union Free School District, 4.25% TANs, 6,003,280
6/29/1998
1,800,000 Franklin County, NY IDA, (Series 1991A) Weekly VRDNs (KES 1,800,000
Chateaugay)/(Bank of Tokyo-Mitsubishi Ltd. LOC)
725,000 Fulton County, NY IDA, 4.05% TOBs (Gates Mills Inc.)/(Fleet 725,000
Bank N.A. LOC), Optional Tender 12/1/1998
1,400,000 Guilderland, NY IDA, (Series 1993A) Weekly VRDNs 1,400,000
(Northeastern Industrial Park, Inc.)/ (Fleet Bank N.A. LOC)
4,080,000 Herkimer County, NY IDA, 1994 IDRB Weekly VRDNs (Granny's 4,080,000
Kitchen)/(Bank of New York, New York LOC)
6,985,000 Livonia, NY Central School District, 3.75% BANs, 3/30/1999 6,991,755
4,000,000 Lowville, NY Central School District, (Bond Anticipation 4,002,958
Notes, 1997), 4.10% BANs, 9/18/1998
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NEW YORK--CONTINUED
$ 1,745,000 Madison County, NY IDA, (Series 1989A) Weekly VRDNs (Madison, $ 1,745,000
NY Upstate Metals)/ (Fleet Bank N.A. LOC)
4,500,000 Madison County, NY IDA, (Series A) Weekly VRDNs (Owl Wire and 4,500,000
Cable)/(KeyBank, N.A. LOC)
4,525,000 Malone, NY Central School District, 4.00% RANs, 6/26/1998 4,525,806
15,000,000 Marine Midland, NY, Premium Tax-Exempt Bond & Loan Trust 15,000,000
Weekly VRDNs (Marine Midland New York Trust)/(Marine Midland
Bank N.A., Buffalo, NY LOC)
5,000,000 (b)Metropolitan Transportation Authority, New York,
MERLOTS 5,000,000 (Series 1997 C-2) Weekly VRDNs
(Corestates Bank N.A., Philadelphia, PA LIQ)/(FGIC LOC)
3,300,000 (b)Monroe County, NY Airport Authority, (PT-98) Weekly VRDNs 3,300,000
(Greater Rochester International Airport)/(MBIA
INS)/(Bayerische Hypotheken-Und Wechsel-Bank AG LIQ)
9,000,000 Nassau County, NY, (Series 1998A), 4.25% BANs, 8/17/1998 9,017,673
4,100,000 New York City Housing Development Corp., (1995 Series A-2) 4,100,000
Weekly VRDNs (400 West 59th Street Development)/(Bayerische
Hypotheken-Und Wechsel-Bank AG LOC)
12,400,000 New York City Housing Development Corp., Multifamily Mortgage 12,400,000
Revenue Bonds (1995 Series A-1) Weekly VRDNs (400 West 59th
Street Development)/(Bayerische Hypotheken-Und Wechsel-Bank
AG LOC)
4,900,000 (b)New York City Housing Development Corp., Municipal 4,900,000
Securities Trust Receipts (Series 1996-CMC1A) Weekly VRDNs
(Chase Manhattan Corp. LIQ)
4,900,000 (b)New York City Housing Development Corp., Municipal 4,900,000
Securities Trust Receipts (Series 1996-CMC1B) Weekly VRDNs
(Chase Manhattan Corp. LIQ)
10,000,000 New York City Municipal Water Finance Authority, 3.60% CP 10,000,000
(Canadian Imperial Bank of Commerce, Toronto LOC), Mandatory
Tender 5/7/1998
10,435,000 (b)New York City Municipal Water Finance Authority, MERLOTS 10,435,000
(Series 1997AA) Weekly VRDNs (AMBAC INS)/(Corestates Bank
N.A., Philadelphia, PA LIQ)
122,223 New York City, NY IDA Weekly VRDNs (David Rosen Bakers 122,223
Supply)/(Ford Motor Credit Corp. LIQ)/(Chase Manhattan Bank
N.A., New York LOC)
7,075,000 (b)New York City, NY IDA, CDC Municipal Products, Inc. LIQ 7,075,000
(Series 1997H) - Class A Certificates Weekly VRDNs (Japan
Airlines Co.)/(FSA INS)/(CDC Municipal Products, Inc. LIQ)
3,500,000 (b)New York City, NY IDA, CDC Municipal Products, Inc. 3,500,000
(Series 1996H) Weekly VRDNs (Japan Airlines Co.)/(FSA
INS)/(CDC Municipal Products, Inc. LIQ)
9,010,000 (b)New York City, NY IDA, Class A Certificates (Series 9,010,000
CDC-1997E) Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC
Municipal Products, Inc. LIQ)
10,300,000 (b)New York City, NY, (PA-156) Weekly VRDNs (Merrill Lynch 10,300,000
Capital Services, Inc. LIQ)/ (Merrill Lynch Capital Services,
Inc. LOC)
7,000,000 New York City, NY, (Series G), 4.25% Bonds, 8/1/1998 7,010,328
5,400,000 New York City, NY, Subseries E-2 Daily VRDNs (Morgan Guaranty 5,400,000
Trust Co., New York LOC)
4,500,000 New York City, NY, UT GO, 4.50% Bonds, 8/1/1998 4,506,080
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NEW YORK--CONTINUED
$ 5,475,000 (b)New York State Dormitory Authority, PA-60 (Series 1993) $ 5,475,000
Weekly VRDNs (Rochester General Hospital)/(FHA INS)/(Merrill
Lynch Capital Services, Inc. LIQ)
6,245,000 (b)New York State Dormitory Authority, PT-128 (Series 1997), 6,245,000
3.90% TOBs (Rosalind & Joseph Gurwin Jewish Geriatric Center
of Long Island, Inc.)/(AMBAC INS)/(Credit Suisse First Boston
LIQ), Mandatory Tender 9/3/1998
6,000,000 (b)New York State Dormitory Authority, PT-130 (Series 1997), 6,000,000
3.90% TOBs (United Health Services Hospitals, Inc.)/(AMBAC
INS)/(Credit Suisse First Boston LIQ), Mandatory Tender
10/1/1998
5,445,000 (b)New York State Energy Research & Development Authority, 5,445,000
(PA-144) Weekly VRDNs (Long Island Lighting Co.)/(Merrill
Lynch Capital Services, Inc. LIQ)/(Merrill Lynch Capital
Services, Inc. LOC)
10,000,000 New York State Energy Research & Development Authority, 10,000,000
(Series 1985A), 3.58% TOBs (Long Island Lighting
Co.)/(Deutsche Bank, AG LOC), Optional Tender 3/1/1999
3,000,000 New York State Energy Research & Development Authority, 3,000,000
(Series 1993A) Weekly VRDNs (Long Island Lighting
Co.)/(Toronto-Dominion Bank LOC)
8,700,000 (b)New York State Environmental Facilities Corp., Trust 8,700,000
Receipts (Series 1997 FR/RI-4) Weekly VRDNs (New York City
Municipal Water Finance Authority)/(Bank of New York, New
York LIQ)
2,500,000 (b)New York State HFA, Health Facilities Revenue Bonds 2,500,000
(PA-143) Weekly VRDNs (New York City, NY)/(Merrill Lynch
Capital Services, Inc. LIQ)/(Merrill Lynch Capital Services,
Inc. LOC)
3,420,000 New York State Job Development Authority Weekly VRDNs (New 3,420,000
York State GTD)/ (Bayerische Landesbank Girozentrale and
Morgan Guaranty Trust Co., New York LOCs)
870,000 New York State Job Development Authority Weekly VRDNs (New 870,000
York State GTD)/ (Bayerische Landesbank Girozentrale and
Morgan Guaranty Trust Co., New York LOCs)
2,575,000 New York State Job Development Authority, (Series C-1) 2,575,000
Monthly VRDNs (New York State GTD)/(Bayerische Landesbank
Girozentrale and Morgan Guaranty Trust Co., New York LOCs)
730,000 New York State Job Development Authority, (Series D-1) 730,000
Monthly VRDNs (New York State GTD)/(Bayerische Landesbank
Girozentrale and Morgan Guaranty Trust Co., New York LOCs)
3,215,000 New York State Job Development Authority, (Series E-1) 3,215,000
Monthly VRDNs (New York State GTD)/(Bayerische Landesbank
Girozentrale and Morgan Guaranty Trust Co., New York LOCs)
4,460,000 (b)New York State Medical Care Facilities Finance Agency, 4,460,000
Hospital & Nursing Home Mortgage Revenue Bonds (1994 Series
C) (PA-89) Weekly VRDNs (FHA INS)/(Merrill Lynch Capital
Services, Inc. LIQ)
3,160,000 (b)New York State Medical Care Facilities Finance Agency, 3,160,000
Hospital Insured Mortgage Revenue Bonds (PT-154) Weekly VRDNs
(FHA INS)/(Banco Santander LIQ)
3,700,000 (b)New York State Mortgage Agency, (Series PA-29) Weekly 3,700,000
VRDNs (Merrill Lynch Capital Services, Inc. LIQ)
3,800,000 (b)New York State Mortgage Agency, Homeowner Mortgage Revenue 3,800,000
Bonds (PA-87) Weekly VRDNs (Merrill Lynch Capital Services,
Inc. LIQ)
4,355,000 (b)New York State Mortgage Agency, Homeowner Mortgage Revenue 4,355,000
Bonds (Series PT-15B) Weekly VRDNs (Commerzbank AG, Frankfurt
LIQ)
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
NEW YORK--CONTINUED
$ 5,000,000 (b)New York State Mortgage Agency, PT-164, 3.675% TOBs $ 5,000,000
(Banque Nationale de Paris LIQ), Optional Tender 3/18/1999
5,000,000 New York State Power Authority, (Series 2), 3.70% CP (Bank of 5,000,000
Nova Scotia, Toronto, Commerzbank AG, Frankfurt, Credit Local
de France, Landesbank Hessen-Thueringen, Frankfurt, Morgan
Guaranty Trust Co., New York and Toronto-Dominion Bank LOCs),
Mandatory Tender 5/6/1998
6,500,000 (b)New York State Thruway Authority, (PA-172) Weekly VRDNs 6,500,000
(Merrill Lynch Capital Services, Inc. LIQ)/(Merrill Lynch
Capital Services, Inc. LOC)
8,400,000 (b)New York State Urban Development Corp., Municipal 8,400,000
Securities Trust Receipts (Series 1996-CMC6) Weekly VRDNs
(Chase Manhattan Corp. LIQ)
6,500,000 Niagara County, NY IDA Weekly VRDNs (Allegheny Ludlum 6,500,000
Corp.)/(PNC Bank, N.A. LOC)
3,200,000 Niagara County, NY IDA, Solid Waste Disposal Facility Revenue 3,200,000
Bonds (Series 1994C) Weekly VRDNs (American Ref-Fuel
Co.)/(Wachovia Bank of NC, N.A., Winston-Salem LOC)
6,500,000 North Warren, NY Central School District, 4.40% BANs, 6,503,616
6/17/1998
190,000 Onondaga County, NY IDA Weekly VRDNs (Beverage
Corp.)/(Marine 190,000 Midland Bank N.A., Buffalo, NY LOC)
1,240,000 Onondaga County, NY IDA, (Series 1997) Weekly VRDNs (General 1,240,000
Super Plating Co., Inc.)/ (KeyBank, N.A. LOC)
1,725,000 Onondaga County, NY Weekly VRDNs (Grainger (W.W.), Inc.) 1,725,000
1,400,000 Ontario, NY IDA Weekly VRDNs (Hillcrest Enterprises/Buckeye 1,400,000
Corrugated)/(National City Bank, Ohio LOC)
5,700,000 Oswego County, NY IDA Weekly VRDNs (Copperweld
Corp.)/(Credit 5,700,000 Lyonnais, Paris LOC)
15,000,000 Port Authority of New York and New Jersey Weekly VRDNs 15,000,000
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 1,000,000
Industrial Park)/ (Fleet Bank N.A. LOC)
11,000,000 Sachem, NY Central School District at Holbrook, 4.25% TANs, 11,005,583
6/25/1998
253,150 Schenectady, NY IDA Weekly VRDNs (McClellan Street 253,150
Associates)/(Ford Motor Credit Corp. LIQ)/(Chase Manhattan
Bank N.A., New York LOC)
1,485,000 Schenectady, NY IDA, IDRB (Series 1995A) Weekly VRDNs 1,485,000
(Fortitech Holding Corporation Project)/(Fleet Bank N.A. LOC)
1,500,000 Shelter Island, NY Union Free School District, 4.25% TANs, 1,500,589
6/29/1998
7,510,000 Sherburne-Earlville Central School District, NY, 3.75% BANs, 7,517,001
3/18/1999
5,000,000 South Country Central School District, NY, 4.15% TANs, 5,001,808
6/25/1998
2,880,000 Southeast, NY IDA, IDRB (Series 1995) Weekly VRDNs (Dairy 2,880,000
Conveyor Corp. Project)/(Chase Manhattan Bank N.A., New York
LOC)
3,700,000 Southeast, NY IDA, Variable Rate IDRB 1996 Weekly VRDNs
(The 3,700,000 Rawplug Company, Inc.)/ (Bank of New York,
New York LOC)
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NEW YORK--CONTINUED
$ 1,500,000 Suffolk County, NY IDA Weekly VRDNs (C & J Realty $ 1,500,000
Corp.)/(Ford Motor Credit Corp. LIQ)/ (Chase Manhattan Bank
N.A., New York LOC)
600,000 Suffolk County, NY IDA Weekly VRDNs (Poly Research 600,000
Corp.)/(Marine Midland Bank N.A., Buffalo, NY LOC)
800,000 Suffolk County, NY IDA Weekly VRDNs (YM-YWHA of 800,000
Suffolk)/(European American Bank, New York LOC)
6,750,000 Suffolk County, NY IDA, (Series 1997B) Weekly VRDNs 6,750,000
(Maryhaven Center of Hope)/ (KeyBank, N.A. LOC)
5,000,000 Suffolk County, NY IDA, (Series 1998A) Weekly VRDNs 5,000,000
(Episcopal Health Services, Inc. Civic Facility)/(Banque
Paribas, Paris LOC)
1,800,000 Suffolk County, NY IDA, 5.525% TOBs (Grainger (W.W.),
Inc.), 1,800,000 Optional Tender 6/1/1998
6,500,000 Three Village, NY Central School District, 4.25% TANs, 6,503,599
6/30/1998
24,000,000 (b)Triborough Bridge & Tunnel Authority, NY, Trust
Receipts 24,000,000 (Series 1998 FR/RI-A1) Weekly VRDNs
(Bayerische Hypotheken-Und Wechsel-Bank AG LIQ)
1,853,700 Ulster County, NY, 4.25% BANs, 5/15/1998 1,853,945
2,400,000 (b)United Nations, NY Development Corp., (PA-155) Weekly 2,400,000
VRDNs (Merrill Lynch Capital Services, Inc. LIQ)/(Merrill
Lynch Capital Services, Inc. LOC)
9,000,000 (b)VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York 9,000,000
City Municipal Water Finance Authority)/(MBIA INS)/(Hongkong
& Shanghai Banking Corp. LIQ)
7,500,000 Walden Village, NY IDA, IDRB (Series 1994) Weekly VRDNs 7,500,000
(Spence Engineering Co.)/ (First Union National Bank,
Charlotte, NC LOC)
4,875,000 Warren & Washington Counties, NY IDA Weekly VRDNs (Sandy Hill 4,875,000
Corp.)/(First Union National Bank, Charlotte, NC LOC)
4,000,000 West Babylon, NY Union Free School District, 4.25% TANs, 4,001,736
6/25/1998
5,000,000 William Floyd UFSD, 4.25% TANs, 6/30/1998 5,002,176
2,700,000 Wyandanch, NY Union Freed School District, (Series 1997), 2,701,797
4.50% TANs, 6/29/1998
1,160,000 Yates County, NY IDA, (Series 1992A) Weekly VRDNs
(Clearplass 1,160,000 Container)/(Fleet Bank of New York
LOC)
TOTAL 497,085,832
</TABLE>
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--4.3%
$ 7,451,821 (b)Commonwealth of Puerto Rico Municipal Revenues Collection $ 7,451,821
Center, 1997A LeaseTOPS Trust Weekly VRDNs (ABN AMRO Bank
N.V., Amsterdam LIQ)/(State Street Bank and Trust Co. LOC)
15,000,000 (b)Commonwealth of Puerto Rico, Floating Rate Trust Receipts 15,000,000
(Series 1997) Weekly VRDNs (Commerzbank AG, Frankfurt
LIQ)/(Commerzbank AG, Frankfurt LOC)
TOTAL 22,451,821
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 519,537,653
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 28.0% 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 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, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
FIRST TIER SECOND TIER
95.14% 4.86%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted
to $199,206,821 which represents 38.0% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($523,938,437) at April 30, 1998.
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
MERLOTS --Municipal Exempt Receipts - Liquidity Optional Tender Series RANs
- --Revenue Anticipation Notes TANs --Tax Anticipation Notes TOBs --Tender Option
Bonds UT --Unlimited Tax VRDC/IVRC --Variable Rate Demand Certificates/Inverse
Variable Rate Certificates VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
NEW YORK MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 519,537,653
Cash 575,949
Income receivable 5,246,521
Prepaid expenses 12,206
Total assets 525,372,329
LIABILITIES:
Income distribution payable $ 1,372,413
Accrued expenses 61,479
Total liabilities 1,433,892
Net Assets for 523,938,437 shares outstanding $ 523,938,437
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$495,059,647 / 495,059,647 shares outstanding $1.00
CASH II SHARES:
$28,878,790 / 28,878,790 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
NEW YORK MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 9,824,566
EXPENSES:
Investment advisory fee $ 1,056,400
Administrative personnel and services fee 199,170
Custodian fees 15,389
Transfer and dividend disbursing agent fees and expenses 65,626
Directors'/Trustees' fees 2,262
Auditing fees 6,576
Legal fees 9,686
Portfolio accounting fees 59,619
Distribution services fee--Institutional Service Shares 626,523
Distribution services fee--Cash II Shares 33,727
Shareholder services fee--Institutional Service Shares 626,523
Shareholder services fee--Cash II Shares 33,727
Share registration costs 15,256
Printing and postage 9,166
Insurance premiums 2,805
Miscellaneous 1,931
Total expenses 2,764,386
Waivers --
Waiver of investment advisory fee $ (229,684)
Waiver of distribution services fee--Institutional (626,523)
Service Shares
Waiver of distribution services fee--Cash II Shares (33,727)
Waiver of shareholder services fee--Institutional (424,335)
Service Shares
Total waivers (1,314,269)
Net expenses 1,450,117
Net investment income $ 8,374,449
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
NEW YORK MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 8,374,449 $ 14,299,081
Change in net assets resulting from operations 8,374,449 14,299,081
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (7,967,201) (13,606,648)
Cash II Shares (407,248) (692,433)
Change in net assets resulting from distributions to (8,374,449) (14,299,081)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 990,143,753 1,611,371,202
Net asset value of shares issued to shareholders in payment 2,949,932 5,353,288
of distributions declared
Cost of shares redeemed (914,730,848) (1,502,253,158)
Change in net assets resulting from share transactions 78,362,837 114,471,332
Change in net assets 78,362,837 114,471,332
NET ASSETS:
Beginning of period 445,575,600 331,104,268
End of period $ 523,938,437 $ 445,575,600
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993**
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.04 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.04) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.59% 3.26% 3.24% 3.56% 2.35% 2.16%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.54%* 0.53% 0.53% 0.54% 0.52% 0.54%
Net investment income 3.18%* 3.21% 3.18% 3.49% 2.31% 2.14%
Expense waiver/reimbursement(b) 0.51%* 0.52% 0.54% 0.53% 0.13% 0.17%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $495,060 $424,174 $305,533 $276,149 $236,580 $274,357
</TABLE>
* Computed on an annualized basis.
** Prior to November 9, 1992, the fund provided three classes of shares.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--CASH II SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993**
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.51% 3.07% 3.05% 3.37% 2.15% 1.98%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.71%* 0.71% 0.71% 0.71% 0.71% 0.71%
Net investment income 3.02%* 3.01% 3.02% 3.20% 2.19% 1.96%
Expense waiver/reimbursement(b) 0.34%* 0.34% 0.36% 0.36% 0.21% 0.17%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $28,879 $21,402 $25,571 $14,439 $134,051 $58,884
</TABLE>
* Computed on an annualized basis.
** Prior to November 9, 1992, the fund provided three classes of shares.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
NEW YORK MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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, the personal income taxes imposed by the New York State and New York
municipalities consistent with stability of principal.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
<TABLE>
<CAPTION>
ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Albany County Airport Authority (Series 2/28/1997 $ 9,195,000
1997 FR/RI-7)
Commonwealth of Puerto Rico Municipal 10/17/1997 7,451,821
Revenues Collection Center, 1997A
Commonwealth of Puerto Rico, Floating Rate 1/2/1998 15,000,000
Trust Receipts (Series 1997)
Metropolitan Transportation Authority, 7/1/1997 5,000,000
(Series 1997 C-2)
Monroe County, NY Airport Authority 2/3/1997 3,300,000
New York City Housing Development Corp. 9/11/1996 4,900,000
(Series 1996-CMC1A)
New York City Housing Development Corp. 9/11/1996 4,900,000
(Series 1996-CMC1B)
New York City Municipal Water Finance 12/15/1997 10,435,000
Authority (Series 1997AA)
New York City, NY IDA, CDC 1997H 4/11/1997 7,075,000
New York City, NY IDA, CDC Municipal 12/12/1996 3,500,000
Products, Inc. (Series 1996H)
New York City, NY IDA, (Series CDC-1997E) 3/11/1997 9,010,000
New York City, NY, (PA-156) 8/1/1997-8/5/1997 10,300,000
New York State Dormitory Authority, PA-60 2/1/1995 5,475,000
(Series 1993)
New York State Dormitory Authority, PT-128 9/18/1997 6,245,000
(Series 1997)
New York State Dormitory Authority, PT-130 10/2/1997 6,000,000
(Series 1997)
New York State Energy Research & 7/1/1997 5,445,000
Development Authority, (PA-144)
New York State Environmental Facilities 2/25/1997-12/15/1997 8,700,000
Corp., Trust Receipts (Series 1997
FR/RI-4)
New York State HFA, Health Facilities 8/29/1997 2,500,000
Revenue Bonds (PA-143)
New York State Medical Care Facilities 8/15/1996 4,460,000
Finance Agency, Hospital & Nursing Home
Mortgage Revenue Bonds (1994 Series C)
(PA-89)
New York State Medical Care Facilities 1/8/1998 3,160,000
Finance Agency, Hospital Insured Mortgage
Revenue Bonds (PT-154)
New York State Mortgage Agency, (Series 4/3/1995 3,700,000
PA-29)
New York State Mortgage Agency, Homeowner 4/1/1995 3,800,000
Mortgage Revenue Bonds (PA-87)
New York State Mortgage Agency, Homeowner 10/1/1995-10/1/1997 4,355,000
Mortgage Revenue Bonds (Series PT-15B)
New York State Mortgage Agency, PT-164 3/24/1998 5,000,000
New York State Thruway Authority, (PA-172) 9/12/1997 6,500,000
New York State Urban Development Corp., 11/21/1996 8,400,000
Municipal Securities Trust Receipts
(Series 1996-CMC6)
Triborough Bridge & Tunnel Authority, NY, 3/18/1998 24,000,000
Trust Receipts (Series 1998 FR/RI-A1)
United Nations, NY Development Corp., 8/5/1997 2,400,000
(PA-155)
VRDC/IVRC Trust, (Series 1992A) 12/16/1997 9,000,000
</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.
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, 1998, capital paid-in aggregated $523,938,437.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Institutional Service Shares April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 914,249,881 1,502,699,453
Shares issued to shareholders in payment of distributions declared 2,687,023 4,828,140
Shares redeemed (846,051,002) (1,388,887,276)
Net change resulting from Institutional Service Share transactions 70,885,902 118,640,317
<CAPTION>
Six Months
Ended Year Ended
Class II Shares April 30, 1998 October 31, 1997
<S> <C> <C>
Shares sold 75,893,872 108,671,749
Shares issued to shareholders in payment of distributions declared 262,909 525,148
Shares redeemed (68,679,846) (113,365,882)
Net change resulting from Class II Share transactions 7,476,935 (4,168,985)
Net change resulting from share transactions 78,362,837 114,471,332
</TABLE>
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, Inc. 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 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, 1998, 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 $356,600,000 and $343,051,098,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 53.6% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The percentage of investments insured
by or supported (backed) by a letter of credit from any one institution or
agency did not exceed 2.9% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not 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.
NOTES
[Graphic] FEDERATED INVESTORS
New York Municipal Cash Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229733
Cusip 314229741
8060106 (6/98)
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, 1997, through April 30, 1998. 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 report period, the fund paid double tax-free dividends of $0.02 per
share. The fund's net assets stood at $141.7 million at the end of the reporting
period.
You can count on North Carolina Municipal Cash Trust to seek the best tax-free
income opportunities for your cash investment needs. As always, we will 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills") -- were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February, as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 35- to 50-day average maturity range over the
reporting period, a neutral stance, and moved within that range according to
relative value opportunities. We continued to employ a barbelled structure for
the portfolio, combining a significant position in seven-day VRDNs with
purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund on April 30, 1998, was 3.65% compared to
3.29% at the beginning of the reporting period*. The increase in yield was due
in large part to technical factors related to income tax payments by individuals
in April. The latest yield was the equivalent to a 6.95% taxable yield for
investors in the highest federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: TO ELECT TRUSTEES.*
<TABLE>
<CAPTION>
SHARED VOTED SHARES WITHHELD
FOR AUTHORITY
<S> <C> <C>
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
</TABLE>
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts.
PORTFOLIO OF INVESTMENTS
NORTH CAROLINA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.6%
GUAM--2.1%
$ 3,000,000 (b)Guam Power Authority, MERLOTs (Revenue Bonds, Series F) $ 3,000,000
Weekly VRDNs (AMBAC INS)/(Corestates Bank N.A., Philadelphia,
PA LIQ)
NORTH CAROLINA--88.3%
1,755,000 Alamance County, NC Industrial Facilities & Pollution Control 1,755,000
Financing Authority, (Series B) Weekly VRDNs (Culp,
Inc.)/(Wachovia Bank of NC, N.A., Winston-Salem LOC)
6,000,000 Alexander County, NC Industrial Facilities & Pollution 6,000,000
Control Financing Authority, (Series 1997) Weekly VRDNs
(Mitchell Gold Company, Inc.)/(SouthTrust Bank of Alabama,
Birmingham LOC)
1,600,000 Buncombe County, NC Industrial Facilities & Pollution Control 1,600,000
Financing Authority, (Series 1991) Weekly VRDNs (Rich Mount,
Inc.)/(Bank of Tokyo-Mitsubishi Ltd. LOC)
975,000 Burke County, NC Industrial Facilities & Pollution Control 975,000
Financing Authority Weekly VRDNs (Norwalk Furniture Corp. &
Hickory Furniture)/(Branch Banking & Trust Co., Wilson LOC)
730,000 Catawba County, NC Industrial Facilities & Pollution Control 730,000
Financing Authority, (Series 1992) Weekly VRDNs (WSMP,
Inc.)/(Nationsbank, N.A., Charlotte LOC)
525,000 Charlotte, NC, Water & Sewer, 5.25% Bonds, 4/1/1999 532,470
3,365,000 Cleveland County, NC Industrial Facilities and Pollution 3,365,000
Control Financing Authority, IDRB (Series 1990) Weekly VRDNs
(MetalsAmerica, Inc. Project)/(BankBoston, N.A. LOC)
1,430,000 Cleveland County, NC Industrial Facilities and Pollution
1,430,000 Control Financing Authority, Pollution Control
Revenue Bonds (Series 1995) Weekly VRDNs (Grover
Industries, Inc.
Project)/(Bank of America Illinois LOC)
870,000 Davidson County, NC Industrial Facilities & PCFA, IDRB 870,000
(Series 1995) Weekly VRDNs (Lawrence Industries, Inc.
Project)/(Michigan National Bank, Farmington Hills LOC)
3,000,000 Gaston County, NC Industrial Facilities and Pollution Control 3,000,000
Financing Authority, (Series 1997) Weekly VRDNs (Thermoform
Plastic, Inc.)/(Norwest Bank Minnesota, N.A. LOC)
950,000 Gaston County, NC, UT GO, 4.70% Bonds (FGIC INS), 3/1/1999 958,449
2,430,000 Guilford County, NC Industrial Facilities & PCFA, (Series 2,430,000
1996) Weekly VRDNs (South/Win Ltd.)/(Branch Banking &
Trust Co., Wilson LOC)
7,000,000 Halifax County, NC Industrial Facilities & PCFA Weekly
VRDNs 7,000,000 (Flambeau Airmold Project)/ (Norwest Bank
Minnesota, N.A.
LOC)
2,944,000 Halifax County, NC, 3.74% BANs, 5/13/1998 2,944,037
600,000 Iredell County, NC Industrial Facilities & Pollution Control 600,000
Financing Authority, Industrial Revenue Bonds Weekly VRDNs
(Jet Corr, Inc. Project)/(National Bank of Canada, Montreal
LOC)
1,000,000 Johnson County, NC Industrial Facilities & Pollution Control 1,000,000
Financing Authority, (Series 1996) Weekly VRDNs (Inolex
Chemical Company Project)/(PNC Bank, N.A. LOC)
2,200,000 Lincoln County, NC Industrial Facilities & Pollution Control 2,200,000
Financing Authority, Industrial Revenue Bonds Weekly VRDNs
(Leucadia, Inc. Project)/(National Bank of Canada, Montreal
LOC)
5,000,000 McDowell County, NC Industrial Facilities and Pollution 5,000,000
Control Financing Authority, (Series 1997) Weekly VRDNs
(Parker Hosiery, Inc.)/(First Union National Bank, Charlotte,
N.C. LOC)
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NORTH CAROLINA--CONTINUED
$ 2,500,000 Mecklenberg County, NC Industrial Facilities and Pollution $ 2,500,000
Control Financing Authority, (Series 1996) Weekly VRDNs
(SteriGenics International Project)/(Comerica Bank, Detroit,
MI LOC)
3,680,000 Mecklenberg County, NC Industrial Facility & PCFA, (Series 3,680,000
1988) Weekly VRDNs (Florida Steel Corp.)/(Bankers Trust Co.,
New York LOC)
900,000 Mecklenburg County, NC, (Series 1996) Weekly VRDNs (YMCA of 900,000
Greater Charlotte Project)/ (Wachovia Bank of N.C., NA,
Winston-Salem LOC)
1,000,000 New Hanover County, NC PCFA Weekly VRDNs (Efson, 1,000,000
Inc.)/(Branch Banking & Trust Co., Wilson LOC)
2,500,000 New Hanover County, NC PCFA, (Series 1984) Weekly VRDNs 2,500,000
(American Hoist & Derrick Co. Project)/(First Union National
Bank, Charlotte, N.C. LOC)
1,335,000 New Hanover County, NC PCFA, (Series 1990) Weekly VRDNs 1,335,000
(Wilmington Machinery, Inc. Project)/(Branch Banking & Trust
C.o, Wilson LOC)
4,500,000 New Hanover County, NC, GO School Bonds, (Series 1995)
Weekly 4,500,000 VRDNs (Wachovia Bank of NC, N.A.,
Winston-Salem LIQ)
2,600,000 North Carolina Agricultural Finance Authority, (Series 1996) 2,600,000
Weekly VRDNs (Coastal Carolina Gin L.L.C. Project)/(Branch
Banking & Trust Co., Wilson LOC)
9,165,000 (b)North Carolina Eastern Municipal Power Agency, PT-132, 9,165,000
3.90% TOBs (MBIA INS)/(Credit Suisse First Boston LIQ),
Mandatory Tender 10/1/1998
1,000,000 North Carolina Medical Care Commission Hospital, Revenue 1,000,000
Bonds (Series 1992B) Weekly VRDNs (North Carolina Baptist)
5,050,000 North Carolina Medical Care Commission Hospital, Revenue 5,050,000
Bonds (Series 1993) Weekly VRDNs (Moses H. Cone Memorial)
10,000,000 North Carolina Municipal Power Agency No. 1, (Series A), 10,000,000
3.60% CP (Morgan Guaranty Trust Co., New York and Union Bank
of Switzerland, Zurich LOCs), Mandatory Tender 5/21/1998
4,000,000 North Carolina Municipal Power Agency No. 1, (Series A), 4,000,000
3.65% CP (Morgan Guaranty Trust Co., New York and Union Bank
of Switzerland, Zurich LOCs), Mandatory Tender 8/13/1998
4,000,000 Onslow County, NC Industrial Facilities & Pollution Control 4,000,000
Financing Authority Weekly VRDNs (Mine Safety Appliances
Co.)/(Sanwa Bank Ltd., Osaka LOC)
3,280,000 Orange County, NC Industrial Facilities & Pollution Control 3,280,000
Financing Authority Weekly VRDNs (Mebane Packaging
Corp.)/(First Union National Bank, Charlotte, N.C. LOC)
2,500,000 Pender County, NC Industrial Facilities and Pollution Control 2,500,000
Financing Authority, (Series 1997) Weekly VRDNs
(Leslie-Locke, Inc.)/(Branch Banking & Trust Co., Wilson LOC)
800,000 Person County, NC Industrial Facilities & Pollution Control 800,000
Financing Authority Daily VRDNs (Carolina Power & Light
Co.)/(Fuji Bank, Ltd., Tokyo LOC)
1,400,000 Piedmont, NC Airport Authority Weekly VRDNs (Triad 1,400,000
International Maintenance Corp.)/ (Mellon Bank N.A.,
Pittsburgh LOC)
1,700,000 Randolph County, NC IDA, (Series 1990) Weekly VRDNs (Wayne 1,700,000
Steel, Inc.)/(Bank One, Ohio, N.A. LOC)
1,600,000 Rutherford County, NC, Industrial Facilities Pollution 1,600,000
Control Financing Authority Weekly VRDNs (Spring-Ford
Knitting Co.)/(Branch Banking & Trust Co., Wilson LOC)
</TABLE>
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
NORTH CAROLINA--CONTINUED
$ 1,500,000 Sampson County, NC Industrial Facilities and Pollution $ 1,500,000
Control Financing Authority, (Series 1997) Weekly VRDNs
(DuBose Strapping, Inc.)/(First Union National Bank,
Charlotte, N.C. LOC)
2,000,000 Wake County, NC Industrial Facilities & PCFA, (Series
1990A), 2,000,000 4.20% CP (Carolina Power & Light
Co.)/(Fuji Bank, Ltd., Tokyo LOC), Mandatory Tender
5/7/1998
8,700,000 Wake County, NC Industrial Facilities & PCFA, (Series
1990B), 8,700,000 4.50% CP (Carolina Power & Light
Co.)/(Fuji Bank, Ltd., Tokyo LOC), Mandatory Tender
5/8/1998
4,000,000 Wake County, NC, 4.40% Bonds, 3/1/1999 4,026,062
3,068,937 Wayne County, NC PCFA Weekly VRDNs (Cooper Industries, 3,068,937
Inc.)/(Sanwa Bank Ltd., Osaka LOC)
Total 125,194,955
PUERTO RICO--9.2%
5,000,000 Government Development Bank for Puerto Rico (GDB), 3.45% CP, 5,000,000
Mandatory Tender 7/9/1998
2,000,000 (b)Puerto Rico Electric Power Authority, MERLOTs (Series 2,000,000
1997S) Weekly VRDNs (MBIA INS)/ (Corestates Bank N.A.,
Philadelphia, PA LIQ)
2,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (1983 2,002,275
Series A), 4.00% TOBs (Merck & Co., Inc.), Optional Tender
12/1/1998
3,000,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 3,000,000 1983A), 3.80% TOBs (Reynolds Metals
Co.)/(ABN AMRO Bank N.V., Amsterdam LOC), Optional Tender
9/1/1998
1,000,000 Puerto Rico Industrial, Medical & Environmental PCA, 1,000,000
Pollution Control Facilities Financing Authority (Series 1983
A), 3.75% TOBs (Schering Plough Corp.)/(Morgan Guaranty Trust
Co., New York LOC), Optional Tender 12/1/1998
Total 13,002,275
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 141,197,230
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 41.2% 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 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, MIG-1 or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, and F-2
by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING 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, 1998, these securities amounted to
$14,165,000 which represents 10.0% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($141,724,393) at April 30, 1998.
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 GO
- --General Obligation IDA --Industrial Development Authority IDRB --Industrial
Development Revenue Bond INS --Insured LIQ --Liquidity Agreement LOCs
- --Letter(s) of Credit LOC --Letter of Credit MERLOTS --Municipal Exempt Receipts
Liquidity Option Tender Series MBIA --Municipal Bond Investors Assurance PCA
- --Pollution Control Authority PCFA --Pollution Control Finance Authority TOBs
- --Tender Option Bonds UT --Unlimited Tax VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
NORTH CAROLINA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 141,197,230
Cash 76,696
Income receivable 847,003
Prepaid expenses 3,908
Deferred organizational costs 1,442
Other assets 982
Total assets 142,127,261
LIABILITIES:
Income distribution payable $ 392,603
Accrued expenses 10,265
Total liabilities 402,868
NET ASSETS for 141,724,393 shares outstanding $ 141,724,393
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
$141,724,393 / 141,724,393 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
NORTH CAROLINA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 3,334,123
EXPENSES:
Investment advisory fee $ 443,475
Administrative personnel and services fee 66,892
Custodian fees 5,055
Transfer and dividend disbursing agent fees and expenses 23,681
Directors'/Trustees' fees 1,086
Auditing fees 6,154
Legal fees 4,163
Portfolio accounting fees 24,320
Shareholder services fee 221,738
Share registration costs 17,919
Printing and postage 5,973
Insurance premiums 1,629
Miscellaneous 9,956
Total expenses 832,041
Waiver--
Waiver of investment advisory fee (304,838)
Net expenses 527,203
Net investment income $ 2,806,920
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
NORTH CAROLINA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 2,806,920 $ 4,504,130
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (2,806,920) (4,504,130)
SHARE TRANSACTIONS--
Proceeds from sale of shares 546,787,020 898,803,747
Net asset value of shares issued to shareholders in payment of 2,133,827 3,808,923
distributions declared
Cost of shares redeemed (579,832,238) (867,725,411)
Change in net assets resulting from share transactions (30,911,391) 34,887,259
Change in net assets (30,911,391) 34,887,259
NET ASSETS:
Beginning of period 172,635,784 137,748,525
End of period $ 141,724,393 $ 172,635,784
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994(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 0.04 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (0.03) (0.04) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.58% 3.24% 3.23% 3.51% 2.06%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.59%* 0.59% 0.59% 0.59% 0.49%*
Net investment income 3.16%* 3.19% 3.17% 3.46% 2.54%*
Expense waiver/reimbursement(c) 0.34%* 0.40% 0.42% 0.40% 0.44%*
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $141,724 $172,636 $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)
NOTES TO FINANCIAL STATEMENTS
NORTH CAROLINA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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 uses the amortized cost method to value its portfolio securities 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 Investment Company Act of 1940.
Additional information on each restricted security held at April 30, 1998, is as
follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Guam Power Authority 12/8/1997 $ 3,000,000
North Carolina Eastern 10/2/1997 $ 9,165,000
Municipal Power Agency
Puerto Rico Electric Power
Authority 11/17/1997 $ 1,998,964
</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.
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, 1998, capital paid-in aggregated $141,724,393.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX-MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 546,787,020 898,803,747
Shares issued to shareholders in payment of
distributions declared 2,133,827 3,808,923
Shares redeemed (579,832,238) (867,725,411)
Net change resulting from share transactions (30,911,391) 34,887,259
</TABLE>
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 Inc., 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 FSSis used to finance certain
services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary, Federated Shareholder Services Company ("FSSC")
serves as transfer and dividend disbursing agent for the Fund. The fee paid to
FSSC is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES
Organizational expenses of $53,386 were borne initially by the Adviser. The Fund
has reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five year period following the Fund's effective
date. For the six-months ended April 30, 1998, the Fund expensed $7,188 of
organizational expenses.
INTERFUND TRANSACTIONS
During the period ended April 30, 1998, 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 $182,060,000 and $210,875,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 75.8% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The 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.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the fund.
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
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
Anthony R. Bosch
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.
NORTH CAROLINA
MUNICIPAL CASH TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229782
G01177-01 (6/98)
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, 1997 through April 30, 1998. 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 totaled
$376.4 million at the end of the reporting period.
You can count on Ohio Municipal Cash Trust to seek the best tax-free income
opportunities for your cash investment needs. As always, we will continue to
provide you with the highest level of professional service. We invite your
questions or comments.
Sincerely,
[Graphic]
Glen R. Johnson
President
June 15, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter of 1997 curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities -- particularly Treasury bills
("T-bills") -- were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 45- to 60-day average maturity range over the
reporting period, a neutral to positive stance, and moved within that range
according to relative value opportunities. We continued to employ a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Service Shares on April
30, 1998, was 3.66% compared to 3.38% at the beginning of the reporting period.*
The increase in yield was due in part to technical factors related to income tax
payments by individuals in April. The latest yield was the equivalent to a 6.88%
taxable yield for investors in the highest federal and state tax brackets. For
the Cash II Shares, the seven-day net yield was 3.36% on April 30, 1998,
compared to 3.08% at the beginning of the reporting period.* The latest yield
was equivalent to a taxable yield of 6.32% for investors in the highest federal
and state tax brackets. For the Institutional Shares, the seven-day net yield
was 3.86% on April 30, 1998, compared to 3.58% at the beginning of the reporting
period.* For these shareholders, the latest yield was equivalent to a taxable
yield of 7.26% for investors in the highest federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following item was considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: TO ELECT TRUSTEES.*
<TABLE>
<CAPTION>
SHARED VOTED SHARES WITHHELD
FOR AUTHORITY
<S> <C> <C>
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
</TABLE>
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
OHIO MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--100.3%
OHIO--100.3%
$ 565,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs $ 565,000
(Visiting Nurses)/(National City Bank, Ohio LOC)
1,925,000 Akron, OH, Street Improvement Special Assessment Notes 1,929,800
(Series 1997), 4.26% RANs, 12/18/1998
2,480,000 Ashland County, OH Health Care Weekly VRDNs (Brethren Care, 2,480,000
Inc.)/(National City Bank, Ohio LOC)
1,500,000 Barberton, OH City School District, (Series B), 4.48% BANs, 1,500,813
6/1/1998
5,875,000 Belmont County, OH Weekly VRDNs (Lesco, Inc.)/(PNC Bank, N.A. 5,875,000
LOC)
1,400,000 Belmont County, OH, 4.18% BANs, 12/1/1998 1,402,219
3,145,000 (b)Butler County, OH, Transportation Improvement District 3,145,000
Highway Improvement Bonds, PA-206, (Series 1997A) Weekly
VRDNs (FSA INS)/(Merrill Lynch Capital Services, Inc. LIQ)
1,860,000 Canfield, OH Local School District, School Improvement 1,861,384
(Series 1997), 4.125% BANs, 10/1/1998
750,000 Clark County, OH, Multifamily Housing Revenue Bonds (Series 750,000
1997) Weekly VRDNs (Ohio Masonic Home)/(Huntington National
Bank, Columbus, OH LOC)
7,000,000 Clermont County, OH, Variable Rate IDRB's (Series 1997) 7,000,000
Weekly VRDNs (Buriot International, Inc.)/(KeyBank, N.A. LOC)
1,255,000 Cleveland Heights, OH, 4.25% BANs, 8/27/1998 1,256,562
2,110,000 Cleveland, OH Airport System, Series C, 4.25% Bonds (FSA 2,116,014
INS), 1/1/1999
2,335,000 (b)Cleveland, OH Parking Facilities, PA-182 (Series 1996)
2,335,000 Weekly VRDNs (MBIA INS)/(Merrill Lynch Capital
Services, Inc.
LIQ)
1,600,000 Clinton County, OH Hospital Authority Weekly VRDNs (Clinton 1,600,000
Memorial Hospital)/(National City Bank, Ohio LOC)
1,700,000 Columbiana County, OH, Industrial Development Revenue Bonds 1,700,000
Weekly VRDNs (C & S Land Company Project)/(Bank One, Ohio,
N.A. LOC)
500,000 Cuyahoga County, OH IDA Weekly VRDNs (Animal Protection 500,000
League (Cuyahoga County))/ (KeyBank, N.A. LOC)
1,350,000 Cuyahoga County, OH IDA Weekly VRDNs (East Park Community, 1,350,000
Inc.)/(KeyBank, N.A. LOC)
260,000 Cuyahoga County, OH IDA Weekly VRDNs (Interstate Diesel 260,000
Service, Inc.)/(Huntington National Bank, Columbus, OH LOC)
590,000 Cuyahoga County, OH IDA Weekly VRDNs (Parma-Commerce Parkway 590,000
West)/(KeyBank, N.A. LOC)
850,000 Cuyahoga County, OH IDA Weekly VRDNs (Premier Manufacturing 850,000
Corp.)/(National City Bank, Kentucky LOC)
2,600,000 Cuyahoga County, OH IDA, (Series 1988) Weekly VRDNs
(Trebmal 2,600,000 Landerhaven)/(Star Bank, NA, Cincinnati
LOC)
1,765,000 Cuyahoga County, OH IDA, IDRB (Series 1995) Weekly VRDNs 1,765,000
(Avalon Precision Casting Co. Project)/(KeyBank, N.A. LOC)
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 6,000,000 Dayton, OH, 3.95% BANs, 9/15/1998 $ 6,003,252
1,585,000 Delaware County, OH, IDRB (Series 1995) Weekly VRDNs (Air 1,585,000
Waves, Inc. Project)/(KeyBank, N.A. LOC)
2,500,000 Dublin, OH, Industrial Development Refunding Revenue Bonds 2,500,000
(Series 1997) Weekly VRDNs (Witco Corp.)/(Fleet National
Bank, Springfield, MA LOC)
1,000,000 Euclid, OH, 4.12% BANs, 7/31/1998 1,000,406
5,240,000 Franklin County, OH Hospital Facility Authority, (Series 5,240,000
1992) Weekly VRDNs (Wesley Glenn, Inc.)/(Fifth Third Bank,
Cincinnati LOC)
4,500,000 Franklin County, OH IDA Weekly VRDNs (Heekin Can, Inc.)/(PNC 4,500,000
Bank, Ohio, N.A. LOC)
2,820,000 Franklin County, OH IDA Weekly VRDNs (Unicorn Leasing 2,820,000
Corp.)/(Fifth Third Bank, Cincinnati LOC)
3,310,000 Franklin County, OH IDA, (Series 1995) Weekly VRDNs (Fabcon 3,310,000
L.L.C. Project)/(Norwest Bank Minnesota, N.A. LOC)
4,900,000 Franklin County, OH IDA, Adjustable Rate Demand IDRB's 4,900,000
(Series 1996A) Weekly VRDNs (Carams, Ltd.)/(Huntington
National Bank, Columbus, OH LOC)
2,100,000 Franklin County, OH IDA, Adjustable Rate Demand IDRB's 2,100,000
(Series 1996B) Weekly VRDNs (Carams, Ltd.)/(Huntington
National Bank, Columbus, OH LOC)
1,995,000 Franklin County, OH, Adjustable Rate Demand Economic 1,995,000
Development Revenue Refunding Bonds (Series 1996) Weekly
VRDNs (CPM Investments)/(Huntington National Bank, Columbus,
OH LOC)
4,500,000 Franklin County, OH, Adjustable Rate Demand Multifamily 4,500,000
Housing Revenue Bonds (Series 1998), 3.85% TOBs (Jefferson
Chase L.P.)/(Fifth Third Bank, Cincinnati LOC), Mandatory
Tender 12/1/1998
1,350,000 Franklin County, OH, Health Care Facilities Revenue Bonds 1,350,000
(Series 1994) Weekly VRDNs (Wesley Glenn, Inc.)/(Fifth Third
Bank of Northwestern OH LOC)
4,995,000 (b)Franklin County, OH, PT156 (Series 1993A), 3.75% TOBs 4,995,000
(Riverside United Methodist Hospital)/(AMBAC INS)/(Bayerische
Hypotheken-Und Wechsel-Bank AG LIQ), Optional Tender
1/14/1999
8,035,000 Greene County, OH, (Series 1997F), 4.10% BANs, 9/10/1998
8,041,993 7,500,000 Henry County, OH, Series 1996 Automatic Feed
Project Weekly 7,500,000
VRDNs (Huntington National Bank, Columbus, OH LOC)
1,000,000 Hilliard, OH, (Series 1997-B), 4.15% BANs, 9/10/1998 1,001,042
3,800,000 Hilliard, OH, Adjustable Rate IDRB's (Series 1996) Weekly 3,800,000
VRDNs (Medex, Inc.)/(Bank One, Ohio, N.A. LOC)
2,000,000 Holmes County, OH IDA Weekly VRDNs (Poultry 2,000,000
Processing)/(Rabobank Nederland, Utrecht LOC)
1,095,000 Huber Heights, OH, IDRB (Series 1994) Weekly VRDNs 1,095,000
(Lasermike, Inc. Project)/(KeyBank, N.A. LOC)
1,723,000 Huber Heights, OH, Various Purpose Assessment, 3.74% BANs, 1,723,565
3/12/1999
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 1,100,000 Kent, OH, Adjustable Rate IDRB's (Series 1994) Weekly VRDNs $ 1,100,000
(Raven's Metal Products, Inc. Project)/(First National Bank
of Ohio, Akron LOC)
3,160,000 Lake County, OH, Adjustable Rate IDRB's (Series 1996) Weekly 3,160,000
VRDNs (Apsco Properties, LTD.)/(First National Bank of Ohio,
Akron LOC)
1,600,000 Lisbon Village School District, OH, GO Unlimited School 1,601,049
Improvement, 4.10% BANs, 9/3/1998
2,000,000 Lorain County, OH, Public Improvement GO Ltd Tax, 4.22% BANs, 2,001,978
9/17/1998
3,975,000 Lorain Port Authority, OH, (Series 1994) Weekly VRDNs 3,975,000
(Spitzer Great Lakes Ltd., Inc.)/(Bank One, Ohio, N.A. LOC)
1,175,000 Lorain Port Authority, OH, Adjustable Rate Demand Port 1,175,000
Development Refunding Revenue Bonds (Series 1996) Weekly
VRDNs (Spitzer Project)/(Bank One, Ohio, N.A. LOC)
8,305,000 Lorain Port Authority, OH, IDRB (Series 1996) Weekly VRDNs 8,305,000
(Brush Wellman, Inc.)/(National City Bank, Ohio LOC)
1,100,000 Louisville City, OH, 4.25% BANs, 5/3/1999 1,103,157
400,000 Lucas County, OH IDA Weekly VRDNs (Kuhlman Corp.)/(KeyBank, 400,000
N.A. LOC)
1,645,000 Lucas County, OH, Hospital Facility Improvement Revenue Bonds 1,645,000
(Series 93) Weekly VRDNs (Lott Industries, Inc.)/(National
City Bank, Ohio LOC)
220,000 Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs 220,000
(Sunshine Children's Home)/(National City Bank, Ohio LOC)
1,400,000 Lucas County, OH, Hospital Refunding Revenue Bonds Weekly 1,400,000
VRDNs (Riverside Hospital, OH)/(Huntington National Bank,
Columbus, OH LOC)
1,585,000 Lucas County, OH, Metropolitan Sewer and Water District 1,586,660
Improvement, 4.11% BANs, 10/21/1998
2,150,000 Lyndhurst, OH, 3.875% BANs, 3/17/1999 2,154,090
5,325,000 Mahoning County, OH Multifamily HFA Weekly VRDNs 5,325,000
(International Towers, Inc.)/(PNC Bank, N.A. LOC)
445,000 Mansfield, OH, IDR Weekly VRDNs (Designed Metal Products, 445,000
Inc.)/(Bank One, Ohio, N.A. LOC)
1,150,000 Mason City, OH, 3.95% BANs, 12/17/1998 1,151,046
3,500,000 Mayfield Village, OH IDA Weekly VRDNs (Beta Campus 3,500,000
Co.)/(KeyBank, N.A. LOC)
7,400,000 Medina County, OH, (Series 1997) Weekly VRDNs (Plaza 71
7,400,000 Associates Ltd.)/(Westdeutsche Landesbank
Girozentrale LOC)
3,000,000 Medina County, OH, (Series 1998) Weekly VRDNs (Michael Day 3,000,000
Enterprises)/(KeyBank, N.A. LOC)
5,400,000 Medina County, OH, Solid Waste Disposal Revenue Bonds (Series 5,400,000
1995) Weekly VRDNs (Valley City Steel Company
Project)/(KeyBank, N.A. LOC)
1,925,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited 1,925,000
Partnership)/(Huntington National Bank, Columbus, OH LOC)
10,000,000 New Albany, OH Community Authority, Adjustable Rate 10,000,000
Multi-Purpose Infrastructure Improvement Bonds, (Series A)
Weekly VRDNs (Huntington National Bank, Columbus, OH LOC)
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 825,000 North Olmsted, OH IDA, 3.95% TOBs (Therm-All)/(National City $ 825,000
Bank, Ohio LOC), Optional Tender 8/1/1998
1,175,000 Ohio HFA Weekly VRDNs (Westchester Village)/(KeyBank, N.A. 1,175,000
LOC)
6,835,000 Ohio HFA, 3.85% TOBs (Lincoln Park Associates)/(Bank One, 6,835,000
Ohio, N.A. LOC), Optional Tender 5/1/1998
2,700,000 (b)Ohio HFA, PT-122 Weekly VRDNs (GNMA COL)/(Banco Santander 2,700,000
LIQ)
10,000,000 Ohio HFA, Residential Mortgage Revenue Notes (1998 Series 10,000,000
A-2), 3.80% BANs, 3/1/1999
5,775,000 (b)Ohio HFA, Single Family Mortgage (Series PT-71), 3.75% 5,775,000
TOBs (GNMA COL)/(Commerzbank AG, Frankfurt LIQ), Mandatory
Tender 10/15/1998
10,265,000 (b)Ohio HFA, Trust Receipts (Series 1996 FR/RI-6) Weekly 10,265,000
VRDNs (GNMA COL)/(Bank of New York, New York LIQ)
3,300,000 (b)Ohio HFA, Trust Receipts (Series 1997 FR/RI-14) Weekly 3,300,000
VRDNs (GNMA COL)/(Bank of New York, New York LIQ)
9,250,000 (b)Ohio HFA, Trust Receipts, (Series 1996 FR/RI-5) Weekly 9,250,000
VRDNs (GNMA COL)/(Bank of New York, New York LIQ)
1,800,000 Ohio State Air Quality Development Authority, (Series 1988A) 1,800,000
Weekly VRDNs (PPG Industries, Inc.)
4,500,000 Ohio State Air Quality Development Authority, Air Quality 4,500,000
Development Revenue Bonds (1995 Series B) Weekly VRDNs (JMG
Funding Limited Partnership)/(Societe Generale, Paris LOC)
1,725,000 Ohio State Higher Education Facility, Revenue Bonds Weekly 1,725,000
VRDNs (Notre Dame College Project)/(National City Bank, Ohio
LOC)
4,400,000 Ohio State Public Facilities Commission, (Series II-1998A), 4,416,121
4.25% Bonds, 12/1/1998
5,000,000 Ohio State Public Facilities Commission, (Series II-B), 4.50% 5,017,513
Bonds, 11/1/1998
5,000,000 Ohio State Water Development Authority, Ohio PCR Bonds 5,000,000
(Series 1989) Weekly VRDNs (Duquesne Light Power Co.)/(First
National Bank of Chicago LOC)
10,000,000 Ohio State Water Development Authority, PCR Refunding Bonds 10,000,000
Weekly VRDNs (General Motors Corp.)
4,000,000 Ohio State Water Development Authority, PCRB's (Series 1988), 4,000,000
3.60% CP (Duquesne Light Power Co.)/(Toronto-Dominion Bank
LOC), Mandatory Tender 6/18/1998
3,500,000 Ohio State Water Development Authority, Pollution Control 3,500,000
Facilities Revenue Bonds, 4.10% TOBs (Union Bank of
Switzerland, Zurich LOC), Optional Tender 5/1/1998
400,000 Ohio State Weekly VRDNs (John Carroll University, OH)/(PNC 400,000
Bank, N.A. LOC)
5,000,000 Ohio State, Environmental Improvement Revenue Bonds (Series 5,000,000
1996) Weekly VRDNs (Newark Group Industries, Inc.)/(Chase
Manhattan Bank N.A., New York LOC)
1,125,000 Ohio State, IDR (Series 1991) Weekly VRDNs (Standby Screw, 1,125,000
Inc.)/(National City Bank, Ohio LOC)
1,300,000 Ohio State, IDRB (Series 1994) Weekly VRDNs (Anomatic 1,300,000
Corp.)/(National City Bank, Ohio LOC)
4,945,000 (b)Ohio Water Development Authority, PA-201 Weekly VRDNs 4,945,000
(AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ)
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 1,250,000 Orange Village, OH, (Series 1998), 3.75% BANs, 10/27/1998 $ 1,250,000
4,600,000 Oregon City, OH, (Series 1997-3), 4.00% BANs, 12/3/1998 4,603,920
1,150,000 Orrville, OH IDA Weekly VRDNs (O.S. Associates/Contours, 1,150,000
Inc.)/(National City Bank, Ohio LOC)
5,000,000 Ottawa County, OH, Regional Water System Improvement, 4.125% 5,003,189
BANs, 8/6/1998
1,500,000 Pickerington Local School District, OH, School Facilities 1,501,678
Notes (Series 1998), 4.07% BANs, 8/3/1998
85,000 Portage County, OH IDA Weekly VRDNs (D & W Associates)/(Bank 85,000
One, Ohio, N.A. LOC)
340,000 Portage County, OH IDA, 3.85% TOBs (Neidlinger)/(KeyBank, 340,000
N.A. LOC), Optional Tender 9/1/1998
4,140,000 Portage County, OH IDA, Adjustable Rate IDRB's (Series 1996) 4,140,000
Weekly VRDNs (Barnette Project)/(National City Bank, Ohio
LOC)
735,000 Portage County, OH IDA, Industries Revenue Bonds Weekly VRDNs 735,000
(Lovejoy Industries)/ (Star Bank, N.A., Cincinnati LOC)
3,800,000 Sandusky, OH, (Series 1997-1), 4.125% BANs, 9/17/1998 3,803,401
5,200,000 Scioto County, OH Hospital Authority Weekly VRDNs (AMBAC 5,200,000
INS)/(First National Bank of Chicago LIQ)
1,600,000 Seneca County, OH Hospital Facility Authority Weekly VRDNs 1,600,000
(St. Francis Home)/(National City Bank, Ohio LOC)
2,000,000 Seven Hills City, OH, (Series 1998), 3.85% BANs, 1/28/1999
2,002,292 400,000 Sharonville, OH, IDR Weekly VRDNs (Xtek,
Inc.)/(Fifth Third 400,000
Bank, Cincinnati LOC)
480,000 Solon, OH, IDR Weekly VRDNs (Graphic Laminating)/(KeyBank, 480,000
N.A. LOC)
1,000,000 South Euclid, OH, Sewer System Improvements, 3.95% BANs, 1,002,252
4/7/1999
1,250,000 Springfield, OH, 4.17% BANs, 6/18/1998 1,250,346
800,000 Stark County, OH IDR Weekly VRDNs (Sancap Abrasives, 800,000
Inc.)/(KeyBank, N.A. LOC)
2,040,000 Stark County, OH IDR, (Series 1994) Weekly VRDNs (Wilkof 2,040,000
Morris)/(KeyBank, N.A. LOC)
1,240,000 Stark County, OH IDR, IDRB (Series 1996) Weekly VRDNs 1,240,000
(Foundations Systems and Anchors, Inc. Project)/(Bank One,
Ohio, N.A. LOC)
1,215,000 Strongsville, OH, IDRB (Series 1994) Weekly VRDNs (Nutro 1,215,000
Machinery Corp., Project)/ (Huntington National Bank,
Columbus, OH LOC)
2,250,000 Summit County, OH IDR Weekly VRDNs (Maison Aine Limited 2,250,000
Partnership)/(KeyBank, N.A. LOC)
4,500,000 Summit County, OH IDR, (Series 1994) Weekly VRDNs (Harry 4,500,000
London Candies, Inc.)/(Bank One, Ohio, N.A. LOC)
1,500,000 Summit County, OH IDR, (Series 1997) Weekly VRDNs (Baker 1,500,000
McMillen Co.)/(National City Bank, Ohio LOC)
820,000 Summit County, OH IDR, 3.80% TOBs (S.D. Meyers, Inc.)/(Bank 820,000
One, Ohio, N.A. LOC), Optional Tender 8/15/1998
325,000 Summit County, OH IDR, 3.85% TOBs (Keltec Industries)/(Bank 325,000
One, Ohio, N.A. LOC), Optional Tender 9/1/1998
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 1,025,000 Summit County, OH IDR, 3.85% TOBs (Matech Machine Tool $ 1,025,000
Co.)/(Bank One, Ohio, N.A. LOC), Optional Tender 8/1/1998
725,000 Summit County, OH IDR, 3.85% TOBs (Universal Rack)/(National 725,000
City Bank, Ohio LOC), Optional Tender 9/1/1998
975,000 Summit County, OH IDR, 3.90% TOBs (Rogers Industrial 975,000
Products, Inc.)/(Bank One, Ohio, N.A. LOC), Optional Tender
5/1/1998
590,000 Summit County, OH IDR, 4.05% TOBs (Bechmer-Boyce 590,000
Project)/(KeyBank, N.A. LOC) 8/6/1998
1,450,000 Summit County, OH IDR, Adjustable Rate IDRB's (Series 1996) 1,450,000
Weekly VRDNs (Fomo Products, Inc.)/(First National Bank of
Ohio, Akron LOC)
2,000,000 Summit County, OH IDR, Adjustable Rate IDRB's (Series 1997) 2,000,000
Weekly VRDNs (Svision)/(Bank One, Ohio, N.A. LOC)
800,000 Summit County, OH IDR, Bonds (Series 1994) Weekly VRDNs 800,000
(Austin Printing Co., Inc.)/(Bank One, Ohio, N.A. LOC)
2,720,000 Summit County, OH IDR, IDRB (Series 1994B) Weekly VRDNs 2,720,000
(Harry London Candies, Inc.)/ (Bank One, Ohio, N.A. LOC)
775,000 Summit County, OH IDR, IDRB (Series 1995) Weekly VRDNs 775,000
(Cardtech Project (OH))/(KeyBank, N.A. LOC)
1,285,000 Summit County, OH IDR, Industrial Development Bonds (Series 1,285,000
1996) Weekly VRDNs (Creative Screen Print Project)/(National
City Bank, Ohio LOC)
1,150,000 Summit County, OH IDR, Multi-Mode Variable Rate I Weekly 1,150,000
VRDNs (Mastergraphics, Inc. Project)/(KeyBank, N.A. LOC)
3,500,000 Summit County, OH, Adjustable Rate Healthcare Facilities 3,500,000
Revenue Bonds (Series 1996) Weekly VRDNs (United Disability
Services, Inc.)/(First National Bank of Ohio, Akron LOC)
3,200,000 Toledo, OH, Adjustable Rate City Services Special Assessment 3,200,000
Notes (Services 1997) Weekly VRDNs (Canadian Imperial Bank of
Commerce, Toronto LOC)
4,000,000 Toledo-Lucas County, OH Port Authority, Airport
Development 4,000,000 Revenue Bonds (Series 1996-1) Weekly
VRDNs (Burlington Air Express, Inc.)/(ABN AMRO Bank N.V.,
Amsterdam LOC)
1,000,000 Toledo-Lucas County, OH Port Authority, IDA Weekly VRDNs 1,000,000
(Medusa Corp.)/(Bayerische Vereinsbank AG, Munich LOC)
2,300,000 Trumbull County, OH IDA, (Series 1989) Weekly VRDNs (McSonald 2,300,000
Steel Corp.)/(PNC Bank, N.A. LOC)
1,300,000 Trumbull County, OH IDA, IDR Refunding Bonds (Series 1994) 1,300,000
Weekly VRDNs (Churchill Downs, Inc.)/(Bank One, Ohio, N.A.
LOC)
1,090,000 Tuscarawas County, OH, Adjustable Rate IDRB's (Series 1995) 1,090,000
Weekly VRDNs (Primary Packaging, Inc.)/(First National Bank
of Ohio, Akron LOC)
2,650,000 Williams County, OH, Multi-Mode Variable Rate IDRB's (Series 2,650,000
1996) Weekly VRDNs (Allied Moulded Products, Inc.)/(KeyBank,
N.A. LOC)
1,055,000 Willoughby City, OH, IDR Refunding Bonds (Series 1995A) 1,055,000
Weekly VRDNs (Pine Ridge Shopping Center Company
Project)/(Star Bank, N.A., Cincinnati LOC)
</TABLE>
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 1,125,000 Willoughby City, OH, IDR Bonds (Series 1995 B) Weekly VRDNs $ 1,125,000
(Pine Ridge Shopping Center Company Project)/(Star Bank,
N.A., Cincinnati LOC)
1,000,000 Wood County, OH Weekly VRDNs (Principle Business 1,000,000
Enterprises)/(National City Bank, Ohio LOC)
2,030,000 Wood County, OH, EDRB Weekly VRDNs (Roe Inc. 2,030,000
Project)/(Huntington National Bank, Columbus, OH LOC)
4,170,000 Youngstown, OH, Adjustable Rate Demand IDRB's (Series
1996A) 4,170,000 Weekly VRDNs (Cantar/ Polyair
Corp./Performa Corp.)/(Marine Midland Bank N.A., Buffalo,
NY LOC)
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 377,370,742
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 53.0% 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, MIG-1, or MIG-2 by Moody's Investors Service, Inc.,
or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING PERCENTAGE BASED ON TOTAL MARKET VALUE (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
<S> <C>
99.71% 0.29%
</TABLE>
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted to
$46,710,000 which represents 12.4% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($376,413,524) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BANs --Bond Anticipation
Notes COL --Collateralized CP --Commercial Paper EDRB --Economic Development
Revenue Bonds 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 LIQ
- --Liquidity Agreement LOC --Letter of Credit MBIA --Municipal Bond Investors
Assurance PCR --Pollution Control Revenue PCRBs --Pollution Control Revenue
Bonds RANs --Revenue Anticipation Notes TOBs --Tender Option Bonds VRDNs
- --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
OHIO MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 377,370,742
Cash 343,340
Income receivable 3,188,121
Prepaid expenses 8,777
Total assets 380,910,980
LIABILITIES:
Payable for investments purchased $ 3,249,809
Income distribution payable 1,074,597
Accrued expenses 173,050
Total liabilities 4,497,456
Net Assets for 376,413,524 shares outstanding $ 376,413,524
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$72,189,411 / 72,189,411 shares outstanding $1.00
CASH II SHARES:
$248,139,536 / 248,139,536 shares outstanding $1.00
INSTITUTIONAL SHARES:
$56,084,577 / 56,084,577 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
OHIO MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 7,669,907
EXPENSES:
Investment advisory fee $ 808,339
Administrative personnel and services fee 152,403
Custodian fees 11,584
Transfer and dividend disbursing agent fees and expenses 144,182
Directors'/Trustees' fees 2,262
Auditing fees 6,607
Legal fees 4,648
Portfolio accounting fees 55,715
Distribution services fee--Cash II Shares 397,040
Shareholder services fee--Institutional Service Shares 86,951
Shareholder services fee--Cash II Shares 330,867
Shareholder services fee--Institutional Shares 87,540
Share registration costs 19,792
Printing and postage 12,380
Insurance premiums 5,099
Taxes 323
Miscellaneous 2,681
Total expenses 2,128,413
Waivers --
Waiver of investment advisory fee $ (469,410)
Waiver of distribution services fee--Cash II Shares (66,173)
Waiver of shareholder services fee--Institutional (17,390)
Service Shares
Waiver of shareholder services fee--Institutional Shares (87,540)
Total waivers (640,513)
Net expenses 1,487,900
Net investment income $ 6,182,007
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
OHIO MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 6,182,007 $ 11,151,320
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (1,114,243) (2,309,907)
Cash II Shares (3,845,939) (6,696,096)
Institutional Shares (1,221,825) (2,145,317)
Change in net assets resulting from distributions to
shareholders (6,182,007) (11,151,320)
SHARE TRANSACTIONS--
Proceeds from sale of shares 1,014,267,028 1,714,819,513
Net asset value of shares issued to shareholders in payment 3,357,687 7,135,525
of distributions declared
Cost of shares redeemed (1,022,869,930) (1,678,846,130)
Change in net assets resulting from share transactions (5,245,215) 43,108,908
Change in net assets (5,245,215) 43,108,908
NET ASSETS:
Beginning of period 381,658,739 338,549,831
End of period $ 376,413,524 $ 381,658,739
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.04 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.03) (0.03) (0.04) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.61% 3.29% 3.27% 3.61% 2.41% 2.33%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.57%* 0.57% 0.57% 0.57% 0.55% 0.48%
Net investment income 3.21%* 3.25% 3.23% 3.56% 2.36% 2.30%
Expense waiver/reimbursement(b) 0.28%* 0.28% 0.31% 0.29% 0.07% 0.19%
SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $72,189 $80,619 $59,721 $72,931 $62,499 $81,748
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--CASH II SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment (0.01) (0.03) (0.03) (0.03) (0.02) (0.02)
income
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.46% 2.98% 2.96% 3.30% 2.10% 2.02%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.87%* 0.87% 0.87% 0.87% 0.85% 0.78%
Net investment income 2.91%* 2.94% 2.92% 3.25% 2.09% 2.01%
Expense waiver/reimbursement(b) 0.28%* 0.28% 0.31% 0.29% 0.24% 0.19%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $248,140 $245,329 $206,149 $188,234 $156,051 $127,017
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997 1996(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 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.71% 3.49% 2.22%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.38%* 0.37% 0.37%*
Net investment income 3.48%* 3.40% 3.38%*
Expense waiver/reimbursement(c) 0.49%* 0.48% 0.51%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $56,085 $55,710 $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)
NOTES TO FINANCIAL STATEMENTS
OHIO MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Butler County, OH, 11/13/1997 $ 3,145,000
Transportation Improvement
District Highway Improvement
Bonds, PA-206, (Series 1997A)
Cleveland, OH Parking 10/10/1997 2,335,000
Facilities, PA-182 (Series
1996)
Franklin County, OH, PT156 1/22/1998 4,995,000
(Series 1993A)
Ohio HFA, PT-122 11/6/1997 2,700,000
Ohio HFA, Single Family 9/1/1997 5,775,000
Mortgage (Series PT-71)
Ohio HFA, Trust Receipts 9/1/1997-3/1/1998 10,265,000
(Series 1996 FR/RI-6)
Ohio HFA, Trust Receipts 5/29/1997 3,300,000
(Series 1997 FR/RI-14)
Ohio HFA, Trust Receipts 9/1/1997-3/1/1998 9,250,000
(Series 1996 FR/RI-5)
Ohio Water Development 11/13/1997 4,945,000
Authority, PA-201
</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.
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, 1998, capital paid-in aggregated $376,413,524.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SERVICE SHARES APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 166,459,370 204,340,077
Shares issued to shareholders in payment of
distributions declared 231,345 477,179
Shares redeemed (175,120,791) (183,918,781)
Net change resulting from Institutional
Service Share transactions (8,430,076) 20,898,475
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
CASH II SHARES APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 491,818,537 846,566,747
Shares issued to shareholders in payment of
distributions declared 3,085,769 6,536,111
Shares redeemed (492,093,603) (813,922,799)
Net change resulting from Cash II Share transactions 2,810,703 39,180,059
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
INSTITUTIONAL SHARES APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 355,989,121 663,912,689
Shares issued to shareholders in payment of
distributions declared 40,573 122,235
Shares redeemed (355,655,536) (681,004,550)
Net change resulting from Institutional Share
transactions 374,158 (16,969,626)
Net change resulting from share transactions (5,245,215) 43,108,908
</TABLE>
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, Inc. 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 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, 1998, 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 $278,425,000 and $318,724,786,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 68.4% 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 10.2% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
Ohio Municipal Cash Trust
[Graphic]
Federated Investors
Ohio Municipal Cash Trust
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229659
Cusip 314229857
Cusip 314229840
2052903 (6/98)
[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, 1997, through April 30, 1998. 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, Cash Series
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 Pennsylvania income
tax*--through a portfolio concentrated in high-quality, short-term Pennsylvania
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 Shares, $0.01 per share for Cash Series Shares, and
$0.02 per share for Institutional Service Shares. The fund's net assets totaled
$362.2 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00
per share. There is no assurance that they will be able to do so. An
investment in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annual reporting period, the Federal Reserve Board
(the "Fed") kept monetary policy unchanged despite robust economic growt he
economy posted a rate of growth of over 3.00% in the last three quarters of
1997, and continued at an above-trend pace of 4.80% in the first quarter of
1998. Prior to last November, the continued benign inflation picture soothed a
market that would otherwise have been unsettled at such a vigorous pace of
growth. At the beginning of the reporting period, signs of tight labor markets
began to build expectation of a need for a tightening by the Fed as added
insurance against inflation. However, dramatic declines in the Asian equity
markets in the fourth quarter curtailed this expectation, and overseas
developments dominated the rest of the year. Concern over these events and their
impact on the domestic economy abated somewhat in the first quarter of 1998.
Nevertheless, more recent employment growth and tight labor markets are
producing much anxiety in the market, as wage inflation pressures could build.
In March, the Fed adopted a "tightening bias" toward monetary policy but
declined to raise short-term interest rates in May, content to wait until the
economic picture becomes more clear.
Movements in short-term Treasury securities--particularly Treasury bills
("T-bills")--were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year, tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund mostly remained in a 45- to 65-day average maturity range over the
reporting period, a neutral to positive stance, and moved within that range
according to relative value opportunities. We continued to employ a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to pursue a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Shares on April 30,
1998, was 3.76%* compared to 3.38% at the beginning of the reporting period. The
increase in yield was due in part to technical factors related to income tax
payments by individuals in April. The latest yield was the equivalent to a 6.53%
taxable yield for investors in the highest federal and state tax brackets. For
the Cash Series Shares, the seven-day net yield was 3.16%* on April 30, 1998,
compared to 2.78% at the beginning of the reporting period. The latest yield was
equivalent to a taxable yield of 5.49% for investors in the highest federal and
state tax brackets. For the Institutional Service Shares, the seven-day net
yield was 3.56%* on April 30, 1998, compared to 3.18% at the beginning of the
reporting period. For these shareholders, the latest yield was equivalent to a
taxable yield of 6.18% for investors in the highest federal and state tax
brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters, and if the drag on
the U.S. economy does not materialize, expectations of a need for Fed rate
increase will most likely rebuild. In the near term, however, market movements
will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
returns. 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. Yields quoted for money market funds most
closely reflect the fund's current earnings.
SHAREHOLDER MEETING RESULTS
A Special Meeting of shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM 1: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
Thomas G. Bigley 2,720,895,677 119,147,843
John T. Conroy, Jr. 2,721,162,612 118,880,908
Peter E. Madden 2,721,333,249 118,710,271
John E. Murray, Jr. 2,721,558,092 118,487,428
On February 24, 1998, the record date for shareholders of Pennsylvania Municipal
Cash Trust (the "Fund") voting at the meeting, there were 397,229,622 total
outstanding shares. The following items were considered by shareholders of the
Fund and the results of their voting were as follows:
AGENDA ITEM 2: To approve or disapprove an amendment in the Fund's
fundamental investment policy on diversification of its investments.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON-VOTE
226,283,363 291,772 570,003 204,710
AGENDA ITEM 3: To approve or disapprove changing from fundamental to an
operating policy the Fund's ability to engage in portfolio trading.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON-VOTE
225,840,915 572,981 731,242 204,710
AGENDA ITEM 4: To approve or disapprove amending and changing from a fundamental
to an operating policy the Fund's ability to invest in restricted securities.
The results of shareholders voting were as follows:
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAIN NON-VOTE
225,797,560 508,831 838,748 204,709
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts
PORTFOLIO OF INVESTMENTS
PENNSYLVANIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--101.1%
PENNSYLVANIA--101.1%
$ 1,740,000 Allegheny County, PA HDA, Health Center Revenue Bonds (Series $ 1,742,791
1998A), 4.375% Bonds (UPMC Health System)/(MBIA INS),
8/1/1998
1,000,000 Allegheny County, PA IDA, (Series 1991) Weekly VRDNs (Mine 1,000,000
Safety Appliances Co.)/(Sanwa Bank Ltd., Osaka LOC)
5,000,000 Allegheny County, PA IDA, PCR (Series 1992A), 3.85% TOBs 5,000,000
(Duquesne Light Power Co.)/ (Canadian Imperial Bank of
Commerce, Toronto LOC), Optional Tender 10/21/1998
1,795,000 (b)Altoona, PA City Authority, Water Revenue Refunding Bonds 1,795,000
(Series 1997) PA-321 Weekly VRDNs (Blair County, PA)/(FGIC
INS)/(Merrill Lynch Capital Services, Inc. LIQ)
5,000,000 Beaver County, PA IDA, PCR Refunding Bonds (1992 Series-E), 5,000,000
3.80% CP (Toledo Edison Co.)/ (Toronto-Dominion Bank LOC),
Mandatory Tender 12/1/1998
5,000,000 Bensalem Township School District, PA, 4.00% TRANs,
6/30/1998 5,000,231 1,115,000 Berks County, PA IDA Weekly VRDNs (ADC
Quaker Maid 1,115,000
Meats)/(Corestates Bank N.A., Philadelphia, PA LOC)
575,000 Berks County, PA IDA Weekly VRDNs (Beacon 575,000
Container)/(Corestates Bank N.A., Philadelphia, PA LOC)
1,500,000 Berks County, PA IDA, (Series 1988) Weekly VRDNs (Arrow 1,500,000
Electronics, Inc.)/(Corestates Bank N.A., Philadelphia, PA
LOC)
3,330,000 Berks County, PA IDA, Manufacturing Facilities Revenue Bonds 3,330,000
(Series 1996) Weekly VRDNs (Ram Industries, Inc.)/(Corestates
Bank N.A., Philadelphia, PA LOC)
1,725,000 Berks County, PA IDA, Manufacturing Facilities Revenue Bonds 1,725,000
(Series 1995) Weekly VRDNs (Grafika Commercial Printing,
Inc.)/(Corestates Bank N.A., Philadelphia, PA LOC)
345,000 Berks County, PA IDA, Revenue Bonds (Series 1995A/Subseries 345,000
A) Weekly VRDNs (Corestates Bank N.A., Philadelphia, PA LOC)
1,040,000 Berks County, PA IDA, Revenue Bonds (Series
1995A/Subseries 1,040,000 B) Weekly VRDNs (Corestates Bank
N.A., Philadelphia, PA LOC)
1,015,000 Berks County, PA IDA (Series A of 1996) Weekly VRDNs
(Lebanon 1,015,000 Valley Mall Co.)/(Meridian Bank,
Reading, PA LOC)
1,855,000 Bucks County, PA IDA Weekly VRDNs (Double H Plastics, 1,855,000
Inc.)/(Corestates Bank N.A., Philadelphia, PA LOC)
2,560,000 Bucks County, PA IDA Weekly VRDNs (Pennsylvania 2,560,000
Associates)/(Corestates Bank N.A., Philadelphia, PA LOC)
2,865,000 Bucks County, PA IDA, (Series 1991) Weekly VRDNs (Cabot
2,865,000 Medical Corp.)/(Corestates Bank N.A.,
Philadelphia, PA LOC)
3,585,000 Bucks County, PA IDA, Variable Rate Demand/Fixed Rate
Revenue 3,585,000 Bonds (Series 1997) Weekly VRDNs (Boekel
Industries, Inc.)/(Corestates Bank N.A., Philadelphia, PA
LOC)
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 1,000,000 Butler County, PA IDA Weekly VRDNs (Mine Safety Appliances $ 1,000,000
Co.)/(Sanwa Bank Ltd., Osaka LOC)
3,000,000 Butler County, PA IDA Weekly VRDNs (Mine Safety Appliances 3,000,000
Co.)/(Sanwa Bank Ltd., Osaka LOC)
1,000,000 Butler County, PA IDA, (Series 1992B) Weekly VRDNs (Mine 1,000,000
Safety Appliances Co.)/(Sanwa Bank Ltd., Osaka LOC)
1,200,000 Butler County, PA IDA, (Series 1996A) Weekly VRDNs (Armco, 1,200,000
Inc.)/(Chase Manhattan Bank N.A., New York LOC)
2,270,000 Butler County, PA IDA, IDRB (Series 1994) Weekly VRDNs 2,270,000
(Lue-Rich Holding Company, Inc. Project)/(ABN AMRO Bank N.V.,
Amsterdam LOC)
2,250,000 Butler County, PA IDA, IDRB's (Series 1997) Weekly VRDNs 2,250,000
(Wise Business Forms, Inc.)/ (SouthTrust Bank of Alabama,
Birmingham LOC)
2,125,000 Butler County, PA IDA (Series 1998) Weekly VRDNs (Allegheny 2,125,000
Metalworking Corp.)/ (National City, Pennsylvania LOC)
6,000,000 Butler County, PA IDA, Variable Rate Demand Revenue Bonds
6,000,000 (Series 1996A), 3.80% TOBs (Lutheran
Welfare)/(PNC Bank, N.A.
LOC), Mandatory Tender 11/1/1998
1,500,000 Cambria County, PA IDA Weekly VRDNs (Cambria 1,500,000
Cogeneration)/(ABN AMRO Bank N.V., Amsterdam LOC)
2,500,000 Cambria County, PA IDA Weekly VRDNs (Cambria 2,500,000
Cogeneration)/(ABN AMRO Bank N.V., Amsterdam LOC)
2,400,000 Cambria County, PA IDA Weekly VRDNs (Cambria 2,400,000
Cogeneration)/(ABN AMRO Bank N.V., Amsterdam LOC)
1,300,000 Carbon County, PA IDA Weekly VRDNs (Summit Management & 1,300,000
Utilities, Inc.)/ (PNC Bank, N.A. LOC)
5,000,000 Carbon County, PA IDA, Resource Recovery Bonds (Series B), 5,000,000
3.60% CP (Panther Creek)/ (National Westminster Bank, PLC,
London LOC), Mandatory Tender 7/13/1998
1,290,000 Carbon County, PA IDA, Resource Recovery Bonds (Series B), 1,290,000
3.60% CP (Panther Creek)/ (National Westminster Bank, PLC,
London LOC), Mandatory Tender 7/16/1998
5,000,000 Carbon County, PA IDA, Solid Waste Disposal Revenue Bonds, 5,000,000
4.15% RANs (Horsehead Resource Development, Inc.)/(Chase
Manhattan Bank N.A., New York LOC), 12/3/1998
3,120,000 Chartiers Valley Industrial & Commercial Development 3,120,000
Authority, Nursing Home Revenue Refunding Bonds (Series
1997A) Weekly VRDNs (Woodhaven Convalescent Center)/ (Bank
One, Ohio, N.A. LOC)
1,305,000 Chester County, PA HEFA, Series B, 4.25% Bonds (Jefferson 1,305,246
Health System), 5/15/1998
7,300,000 Clearfield County, PA IDA Weekly VRDNs (Penn Traffic 7,300,000
Co.)/(ABN AMRO Bank N.V., Amsterdam LOC)
1,100,000 Cumberland County, PA IDA, Industrial Development Bonds 1,100,000
(Series 1994) Weekly VRDNs (Lane Enterprises, Inc.
Project)/(Corestates Bank N.A., Philadelphia, PA LOC)
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 10,000,000 Cumberland County, PA Municipal Authority, Variable Rate $ 10,000,000
Revenue Bonds (Series 1996B), 3.75% TOBs (Dickinson
College)/(Mellon Bank N.A., Pittsburgh LOC), Optional Tender
11/2/1998
1,000,000 Dallastown Area School District, PA, G.O. Bonds (Series 1998) 1,000,000
Weekly VRDNs (FGIC INS)/ (FGIC Securities Purchase, Inc. LIQ)
3,500,000 (b)Delaware Valley, PA Regional Finance Authority, PA-162 3,500,000
Weekly VRDNs (AMBAC INS)/ (Merrill Lynch Capital Services,
Inc. LIQ)
500,000 East Hempfield Township, PA IDA, (Series 1985) Weekly VRDNs 500,000
(Yellow Freight System)/ (Wachovia Bank of Georgia N.A.,
Atlanta LOC)
3,900,000 East Hempfield Township, PA IDA, (Series 1985) Weekly VRDNs 3,900,000
(Yellow Freight System)/ (Wachovia Bank of Georgia N.A.,
Atlanta LOC)
6,250,000 East Hempfield Township, PA IDA, (Series of 1997) Weekly 6,250,000
VRDNs (Mennonite Home)/ (Dauphin Deposit Bank and Trust LOC)
2,000,000 Easton Area School District, PA, (Series 1997) Weekly VRDNs 2,000,000
(FGIC INS)/(FGIC Securities Purchase, Inc. LIQ)
2,800,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Mary's 2,800,000
Hospital Erie, PA)/ (PNC Bank, N.A. LOC)
225,000 Erie County, PA IDA, (Series 1985) Weekly VRDNs (R. P-C 225,000
Value, Inc.)/(PNC Bank, N.A. LOC)
300,000 Erie County, PA IDA, (Series B) Weekly VRDNs (P.H.B. 300,000
Project)/(PNC Bank, N.A. LOC)
4,000,000 Erie County, PA, 4.375% TRANs (PNC Bank, N.A. LOC), 4,014,815
12/31/1998
200,000 Forest County, PA IDA Weekly VRDNs (Industrial Timber & Land 200,000
Co.)/(National City Bank, Ohio LOC)
1,030,000 Forest County, PA IDA Weekly VRDNs (Marienville Health Care 1,030,000
Facility)/(PNC Bank, N.A. LOC)
2,900,000 Franconia Township, PA IDA, IDRB's (Series 1997A) Weekly 2,900,000
VRDNs (Asher's Chocolates)/ (Mellon Bank N.A., Pittsburgh
LOC)
1,635,000 Franklin County, PA IDA Weekly VRDNs (The Guarriello Limited 1,635,000
Partnership)/ (PNC Bank, N.A. LOC)
2,295,000 Lancaster, PA IDA, Tax Exempt (Series A of 1998) Weekly VRDNs 2,295,000
(Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust
LOC)
3,385,000 Lancaster, PA IDA, Tax Exempt (Series C of 1998) Weekly VRDNs 3,385,000
(Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust
LOC)
2,600,000 Lehigh County, PA IDA, (Series 1989A) Weekly VRDNs (Hershey 2,600,000
Pizza Co., Inc.)/ (PNC Bank, N.A. LOC)
1,000,000 Lehigh County, PA IDA, Variable Rate Demand Revenue Bonds 1,000,000
(Series 1997) Weekly VRDNs (American Manufacturing Co.,
Inc.)/(Mellon Bank N.A., Pittsburgh LOC)
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 6,840,000 McKean County, PA IDA, Economic Development Revenue Bonds $ 6,840,000
(Series 1997) Weekly VRDNs (Keystone Powdered Metal
Co.)/(Mellon Bank N.A., Pittsburgh LOC)
290,000 McKean County, PA IDA, Multi-Mode Revenue Refunding Bonds 290,000
Weekly VRDNs (Bradford Manor, Inc.)/(PNC Bank, N.A. LOC)
3,300,000 Monroe County, PA IDA, PCR Weekly VRDNs (Cooper
Industries, 3,300,000 Inc.)/(Sanwa Bank Ltd., Osaka LOC)
1,885,000 Montgomery County, PA Higher Education and Health Authority, 1,885,000
(Series 1992) Weekly VRDNs (Pottstown Healthcare Corporation
Project)/(Corestates Bank N.A., Philadelphia, PA LOC)
3,500,000 Montgomery County, PA IDA, (Series 1984) Weekly VRDNs
(Seton 3,500,000 Co.)/(First Union National Bank,
Charlotte, NC LOC)
1,200,000 Montgomery County, PA IDA, (Series 1992) Weekly VRDNs (RJI 1,200,000
Limited Partnership)/ (Corestates Bank N.A., Philadelphia, PA
LOC)
1,000,000 Montgomery County, PA IDA, (Series A) Weekly VRDNs (Vari 1,000,000
Corp.)/(Dauphin Deposit Bank and Trust LOC)
4,250,000 Montgomery County, PA IDA, (Series C) Weekly VRDNs (Vari 4,250,000
Corp.)/(Dauphin Deposit Bank and Trust LOC)
6,600,000 Montgomery County, PA IDA, Commercial Development Revenue 6,600,000
Bonds (Series 1992) Weekly VRDNs (Hickory Pointe
Project)/(First Union National Bank, North Carolina LOC)
2,030,000 Montgomery County, PA IDA, EDRB's (Series 1997) Weekly VRDNs 2,030,000
(Palmer International, Inc.)/(Mellon Bank N.A., Pittsburgh
LOC)
3,310,000 Moon Township, PA IDA, Variable Rate Commercial Development 3,310,000
Revenue Bond (Series 1995A) Weekly VRDNs (One Thorn Run
Center)/(National City, Pennsylvania LOC)
8,000,000 North Penn Health, Hospital and Education Authority, PA, 8,000,000
Hospital Revenue Bonds (Series 1998) Weekly VRDNs (North Penn
Hospital, PA)/(First Union National Bank, North Carolina LOC)
9,000,000 Northampton County, PA IDA, 3.45% CP (Citizens Utilities 9,000,000
Co.), Mandatory Tender 5/11/1998
3,850,000 Northampton County, PA IDA, 3.75% CP (Citizens Utilities 3,850,000
Co.), Mandatory Tender 9/11/1998
2,542,000 Northampton County, PA IDA, Variable Rate Revenue Bonds
2,542,000 (Series 1997) Weekly VRDNs (Ultra-Poly
Corp.)/(PNC Bank, N.A.
LOC)
1,590,000 Northumberland County PA IDA, Revenue Bonds (Series A of 1,590,000
1995) Weekly VRDNs (Furman Farms, Inc. Project)/(Corestates
Bank N.A., Philadelphia, PA LOC)
1,650,000 Pennsylvania EDFA Weekly VRDNs (Cyrogenics, Inc.)/(PNC Bank, 1,650,000
N.A. LOC)
2,600,000 Pennsylvania EDFA Weekly VRDNs (Industrial Scientific 2,600,000
Corp.)/(Mellon Bank N.A., Pittsburgh LOC)
525,000 Pennsylvania EDFA Weekly VRDNs (Pioneer Fluid)/(PNC Bank, 525,000
N.A. LOC)
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 525,000 Pennsylvania EDFA Weekly VRDNs (RMF Associates)/(PNC Bank, $ 525,000
N.A. LOC)
575,000 Pennsylvania EDFA, (Series B) Weekly VRDNs (Payne Printing 575,000
Co.)/(PNC Bank, N.A. LOC)
2,890,000 Pennsylvania EDFA, Economic Development Revenue Bonds (Series 2,890,000
1996C) Weekly VRDNs (Napco, Inc. Project)/(Mellon Bank N.A.,
Pittsburgh LOC)
10,000,000 Pennsylvania EDFA, Exempt Facilities Revenue Bonds (Series 10,000,000
1997B) Weekly VRDNs (National Gypsum Co.)/(Nationsbank, N.A.,
Charlotte LOC)
625,000 Pennsylvania EDFA, Revenue Bonds (Series G4) Weekly VRDNs 625,000
(Metamora Products)/ (PNC Bank, N.A. LOC)
250,000 Pennsylvania EDFA, Revenue Bonds Weekly VRDNs (DDI 250,000
Pharmaceuticals, Inc.)/ (PNC Bank, N.A. LOC)
250,000 Pennsylvania EDFA, Revenue Bonds Weekly VRDNs (RAM Forest 250,000
Products)/ (PNC Bank, N.A. LOC)
13,665,000 (b)Pennsylvania Housing Finance Authority, (Series
1997-58A), 13,665,000 PT-149, 3.75% TOBs (Commerzbank AG,
Frankfurt LIQ), Optional Tender 12/10/1998
14,430,000 (b)Pennsylvania Housing Finance Authority, MERLOTs (Series
K) 14,430,000 Weekly VRDNs (Corestates Bank N.A.,
Philadelphia, PA LIQ)
3,245,000 (b)Pennsylvania Housing Finance Authority, PT-119B(Series 3,245,000
1997-56B) Weekly VRDNs (Credit Suisse First Boston LIQ)
940,000 Pennsylvania Housing Finance Authority, Section 8 Assisted 940,000
Residential Development Refunding Bonds (Series 1992A) Weekly
VRDNs (CGIC INS)/(Citibank NA, New York LIQ)
6,000,000 Pennsylvania State Higher Education Assistance Agency, 6,000,000
Student Loan Adjustable Rate Revenue Bonds (Series 1997A)
Weekly VRDNs (Student Loan Marketing Association LOC)
6,000,000 Pennsylvania State Higher Education Facilities Authority, 6,018,283
(Series 1997B8), 4.50% TOBs (Wilkes University)/(PNC Bank,
N.A. LOC), Mandatory Tender 11/1/1998
4,000,000 Philadelphia Redevelopment Authority, Multi-Family Revenue 4,000,000
Bonds (Series 1985) Weekly VRDNs (Franklin Town
Towers)/(Marine Midland Bank N.A., Buffalo, NY LOC)
3,745,000 Philadelphia, PA Hospitals & Higher Education Facilities 3,745,706
Authority, Series A, 4.25% Bonds (Jefferson Health System),
5/15/1998
2,450,000 Philadelphia, PA IDA, Refunding Revenue Bonds (Series 1991) 2,450,000
Weekly VRDNs (Tom James Co.)/(SunTrust Bank, Nashville LOC)
7,500,000 Philadelphia, PA School District, (Series 1997-1998), 4.50% 7,505,926
TRANs (Commerzbank AG, Frankfurt LOC), 6/30/1998
3,230,000 (b)Philadelphia, PA Water & Wastewater System, (CDC Series
3,230,000 1997Q) Weekly VRDNs (MBIA INS)/(CDC Municipal
Products, Inc.
LIQ)
3,000,000 Philadelphia, PA, (Series A), 4.50% TRANs, 6/30/1998 3,002,370
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 5,000,000 Philadelphia, PA, GO Series 1990, 4.35% CP (Fuji Bank, Ltd., $ 5,000,000
Tokyo LOC), Mandatory Tender 5/21/1998
11,600,000 Philadelphia, PA, GO Series 1990, 4.60% CP (Fuji Bank,
Ltd., 11,600,000 Tokyo LOC), Mandatory Tender 5/19/1998
5,000,000 (b)Philadelphia, PA, Trust Receipts (Series 1997 FR/RI-11) 5,000,000
Weekly VRDNs (MBIA INS)/ (Bank of New York, New York LIQ)
4,625,000 Red Lion, PA Area School District, (Series 1997/98), 4.11% 4,626,022
TRANs, 6/30/1998
1,700,000 Schuylkill County, PA IDA, Manufacturing Facilities Revenue 1,700,000
Bonds (Series 1995) Weekly VRDNs (Prime Packing, Inc.
Project)/(Corestates Bank N.A., Philadelphia, PA LOC)
1,900,000 Schuylkill County, PA IDA, Variable Rate Demand/Fixed Rate 1,900,000
Manufacturing Facilities Revenue Bonds (Series of 1996)
Weekly VRDNs (Craftex Mills, Inc.)/(Corestates Bank N.A.,
Philadelphia, PA LOC)
2,000,000 Shaler Township, PA, 4.18% TANs, 12/31/1998 2,001,022
1,000,000 Springfield, PA School District, 3.90% TRANs, 12/31/1998 1,000,000
2,600,000 Venango, PA IDA, (Series A), 3.50% CP (Scrubgrass Power 2,600,000
Corp.)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 6/12/1998
2,100,000 Venango, PA IDA, Resource Recovery Bonds (Series 1993), 3.60% 2,100,000
CP (Scrubgrass Power Corp.)/(National Westminster Bank, PLC,
London LOC), Mandatory Tender 5/12/1998
4,000,000 Venango, PA IDA, Resource Recovery Bonds (Series 1993), 3.60% 4,000,000
CP (Scrubgrass Power Corp.)/(National Westminster Bank, PLC,
London LOC), Mandatory Tender 6/18/1998
2,700,000 Washington County, PA Authority, (Series 1985A) Weekly VRDNs 2,700,000
(1985-A Pooled Equipment Lease Program)/(First Union National
Bank, North Carolina LOC)
1,900,000 Washington County, PA Hospital Authority Weekly VRDNs 1,900,000
(Keystone Diversified Management Corp.)/(Mellon Bank N.A.,
Pittsburgh LOC)
10,700,000 Washington County, PA IDA, Solid Waste Disposal Revenue
Bonds 10,700,000 (Series 1995) Weekly VRDNs (American Iron
Oxide Co.
Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC)
950,000 Washington County, PA, IDA (Series 1988) Weekly VRDNs 950,000
(Coca-Cola Co.)/(Mellon Bank N.A., Pittsburgh LOC)
2,000,000 West Allegheny, PA School District, 4.11% TRANs, 6/30/1998 2,000,346
835,000 West Cornwall Township, PA Municipal Authority, Revenue Bonds 835,000
(Series 1995) Weekly VRDNs (Lebanon Valley Brethern Home
Project (PA))/(Corestates Bank N.A., Philadelphia, PA LOC)
9,600,000 Westmoreland County, PA IDA, Guaranteed Variable Rate Revenue 9,600,000
Bonds (Series of 1993) Weekly VRDNs (USA Waste Services,
Inc.)/(Fleet Bank N.A. LOC)
</TABLE>
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 2,500,000 York County, PA IDA, Limited Obligation Revenue Bonds (Series $ 2,500,000
1997) Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank,
Detroit, MI LOC)
2,750,000 York County, PA IDA, Variable Rate Demand Ltd. Obligation 2,750,000
Revenue Bonds (Series 1996) Weekly VRDNs (Metal Exchange
Corp.)/(Comerica Bank, Detroit, MI LOC)
2,125,000 York County, PA Solid Waste & Refuse Authority, 4.75% Bonds 2,136,116
(FGIC INS), 12/1/1998
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 366,150,874
</TABLE>
At April 30, 1998, 51.5% 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 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, MIG1 or MIG-2 by Moody's Investors Service, Inc.,
or F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, the portfolio securities were rated as follows:
TIER RATING PERCENT BASED ON TOTAL MARKET VALUE (UNAUDITED)
FIRST TIER SECOND TIER
95.47% 4.53%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted
to $44,865,000 which represents 12.4% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($362,210,128) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation CGIC --Capital Guaranty
Insurance Corporation CP --Commercial Paper EDFA --Economic Development
Financing Authority EDRB --Economic Development Revenue Bonds FGIC --Financial
Guaranty Insurance Company GO --General Obligation HDA --Hospital Development
Authority HEFA --Health and Education Facilities Authority IDA --Industrial
Development Authority IDRB --Industrial Development Revenue Bond INS --Insured
LIQ --Liquidity Agreement LOC --Letter of Credit MBIA --Municipal Bond Investors
Assurance
MERLOTs --Municipal Exempt Receipts - Liquidity Optional Tender Series PCR
- --Pollution Control Revenue PLC --Public Limited Company RANs --Revenue
Anticipation Notes TANs --Tax Anticipation Notes TOBs --Tender Option Bonds
TRANs --Tax and Revenue Anticipation Notes VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
PENNSYLVANIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 366,150,874
Cash 290,705
Income receivable 3,132,561
Prepaid expenses 8,393
Total assets 369,582,533
LIABILITIES:
Payable for investments purchased $ 6,250,000
Income distribution payable 1,047,353
Accrued expenses 75,052
Total liabilities 7,372,405
NET ASSETS for 362,210,128 shares outstanding $ 362,210,128
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$41,936,045 / 41,936,045 shares outstanding $1.00
CASH SERIES SHARES:
$52,479,912 / 52,479,912 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$267,794,171 / 267,794,171 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
PENNSYLVANIA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 7,270,069
EXPENSES:
Investment advisory fee $ 956,701
Administrative personnel and services fee 144,299
Custodian fees 12,438
Transfer and dividend disbursing agent fees and expenses 41,138
Directors'/Trustees' fees 1,722
Auditing fees 7,462
Legal fees 4,401
Portfolio accounting fees 56,063
Distribution services fee--Cash Series Shares 83,779
Shareholder services fee--Institutional Service Shares 359,455
Shareholder services fee--Cash Series Shares 52,362
Shareholder services fee--Institutional Shares 66,533
Share registration costs 19,516
Printing and postage 14,924
Insurance premiums 2,679
Miscellaneous 3,062
Total expenses 1,826,534
Waivers--
Waiver of investment advisory fee $ (394,955)
Waiver of distribution services fee--Cash Series Shares (10,472)
Waiver of shareholder services fee--Institutional (71,891)
Service Shares
Waiver of shareholder services fee--Institutional Shares (66,533)
Total waivers (543,851)
Net expenses 1,282,683
Net investment income $ 5,987,386
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
PENNSYLVANIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
APRIL 30, 1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 5,987,386 $ 10,489,997
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (4,523,547) (8,169,653)
Cash Series Shares (576,008) (617,375)
Institutional Shares (887,831) (1,702,969)
Change in net assets resulting from distributions to (5,987,386) (10,489,997)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 841,525,037 1,340,687,798
Net asset value of shares issued to shareholders in payment 1,724,477 3,168,018
of distributions declared
Cost of shares redeemed (832,597,926) (1,271,049,376)
Change in net assets resulting from share transactions 10,651,588 72,806,440
Change in net assets 10,651,588 72,806,440
NET ASSETS:
Beginning of period 351,558,540 278,752,100
End of period $ 362,210,128 $ 351,558,540
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995(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 0.03 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.67% 3.38% 3.37% 1.03%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.45%*
Net investment income 3.34%* 3.35% 3.27% 3.81%*
Expense waiver/reimbursement(c) 0.45%* 0.47% 0.47% 0.46%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $41,936 $63,148 $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)
FINANCIAL HIGHLIGHTS--CASH SERIES SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.01) (0.03) (0.03) (0.03) (0.02) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.37% 2.77% 2.75% 3.02% 1.84% 1.83%
RATIOS TO AVERAGE NET ASSETS
Expenses 1.06%* 1.05% 1.05% 1.05% 1.04% 0.97%
Net investment income 2.75%* 2.72% 2.72% 2.98% 1.73% 1.88%
Expense waiver/reimbursement(b) 0.26%* 0.27% 0.27% 0.28% 0.18% 0.12%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $52,480 $23,777 $19,825 $28,255 $18,352 $18,561
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.02
LESS DISTRIBUTIONS
Distributions from net investment (0.02) (0.03) (0.03) (0.03) (0.02) (0.02)
income
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.57% 3.18% 3.16% 3.44% 2.25% 2.24%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.65%* 0.65% 0.65% 0.65% 0.64% 0.57%
Net investment income 3.15%* 3.14% 3.12% 3.38% 2.19% 2.21%
Expense waiver/reimbursement(b) 0.26%* 0.27% 0.27% 0.27% 0.02% 0.12%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $267,794 $264,634 $221,851 $276,407 $229,160 $318,518
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
PENNSYLVANIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 Shares, Cash Series 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 Commonwealth of Pennsylvania consistent with stability of
principal.
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, 1998, is as
follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Altoona, PA City Authority 2/5/1998 $ 1,795,000
Delaware Valley, PA Regional Finance Authority 8/13/1997 3,500,000
Pennsylvania Housing Finance Authority (Series 1997-58A) 1/8/1998 13,665,000
Pennsylvania Housing Finance Authority (Series K) 7/21/1997 - 12/31/1997 14,430,000
Pennsylvania Housing Finance Authority (Series 1997-56B) 10/16/1997 3,245,000
Philadelphia, PA Water & Wastewater System 9/4/1997 3,230,000
Philadephia, PA 4/21/1998 5,000,000
</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.
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, 1998, capital paid-in aggregated $362,210,128.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
INSTITUTIONAL SHARES APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 161,386,704 217,175,576
Shares issued to shareholders in payment of distributions declared 41,094 113,351
Shares redeemed (182,639,808) (191,217,371)
Net change resulting from Institutional Share transactions (21,212,010) 26,071,556
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
CASH SERIES SHARES APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 89,827,641 71,085,166
Shares issued to shareholders in payment of distributions declared 441,151 559,551
Shares redeemed (61,565,811) (67,692,672)
Net change resulting from Cash Series Share transactions 28,702,981 3,952,045
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31,
INSTITUTIONAL SERVICE SHARES APRIL 30, 1998 1997
<S> <C> <C>
Shares sold 590,310,692 1,052,427,056
Shares issued to shareholders in payment of distributions declared 1,242,232 2,495,116
Shares redeemed (588,392,307) (1,012,139,333)
Net change resulting from Institutional Service Share transactions 3,160,617 42,782,839
Net change resulting from share transactions 10,651,588 72,806,440
</TABLE>
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, Inc. 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 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, 1998, 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 $371,885,000 and $379,435,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 80% 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% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
[Graphic] FEDERATED INVESTORS
Pennsylvania Municipal Cash Trust
SEMI-ANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
Cusip 314229717
Cusip 314229881
Cusip 314229204
0052405 (6/98)
[Graphic]
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, 1997 through April 30, 1998. 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
incomefree 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 Institutional Shares and $0.02 per share for Institutional
Service Shares. The fund's net assets totaled $48.8 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 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period?
A. During the fund's semi-annualreporting period, the Federal Reserve Board (the
"Fed") kept monetary policy unchanged despite robust economic growth. The
economy posted a rate ofgrowth of over 3.00% in the last three quarters of 1997,
and continued at an above-trend pace of 4.80% in the first quarter of 1998.
Prior to last November, the continued benign inflation picture soothed a market
that would otherwise have been unsettled at such a vigorous pace of growth. At
the beginning of the reporting period, signs of tight labor markets began to
build expectation of a need for a tightening by the Fed as added insurance
against inflation. However, dramatic declines in the Asian equity markets in the
fourth quarter of 1997 curtailed this expectation, and overseas developments
dominated the rest of the year. Concern over these events and their impact on
the domestic economy abated somewhat in the first quarter of 1998. Nevertheless,
more recent employment growth and tight labor markets are producing much anxiety
in the market, as wage inflation pressures could build. In March, the Fed
adopted a "tightening bias" toward monetary policy but declined to raise
short-term interest rates in May, content to wait until the economic picture
becomes more clear.
Movements in short-term Treasury securities -- particularly Treasury bills
("T-bills")-- were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the period, VRDN
yields averaged 66% or more of taxable rates making them generally attractive
over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained mostly in a 30- to 50-day average maturity range over the
reporting period, a neutral stance, and moved within that range according to
relative value opportunities. We continued to employ a barbelled structure for
the portfolio, combining a significant position in seven-day VRDNs with
purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to pursue a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the Institutional Shares on April 30, 1998, was
3.86%* compared to 3.46% at the beginning of the reporting period. The increase
in yield was partly due to technical factors related to income tax payments by
individuals in April. The latest yield was the equivalent to a 7.10% taxable
yield for investors in the highest federal and state tax brackets. For the
Institutional Service Shares, the seven-day net yield was 3.61%* on April 30,
1998, compared to 3.21% at the beginning of the reporting period. The latest
yield was equivalent to a taxable yield of 6.64% for investors in the highest
federal and state tax brackets.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
THOMAS G. BIGLEY 2,720,895,677 119,147,843
JOHN T. CONROY, JR. 2,721,162,612 118,880,908
PETER E. MADDEN 2,721,333,249 118,710,271
JOHN E. MURRAY, JR. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts.
PORTFOLIO OF INVESTMENTS
TENNESSEE MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.1%
TENNESSEE--99.1%
$ 980,000 Benton County TN IDB, (Series 1996) Weekly VRDNs (Jones Plastic $ 980,000
and Engineering Corp.)/ (National City Bank, Kentucky LOC)
2,550,000 Chattanooga, TN IDB, Revenue Bonds (Series 1997) Weekly VRDNs 2,550,000
(TB Wood's Inc. Project)/ (PNC Bank, N.A. LOC)
2,000,000 Dickson County, TN IDB, (Series 1996) Weekly VRDNs (Tennessee 2,000,000
Bun Company, LLC Project)/ (PNC Bank, Ohio, N.A. LOC)
2,700,000 Franklin County, TN IDB, IDRB (Series 1997) Weekly VRDNs 2,700,000
(Hi-Tech)/(Regions Bank, Alabama LOC)
1,430,000 Greenfield, TN IDB, (Series 1995) Weekly VRDNs (Plastic 1,430,000
Products Co. Project)/ (Norwest Bank Minnesota, N.A. LOC)
1,500,000 Hamilton County, TN IDB, (Series 1987) Weekly VRDNs (Seaboard 1,500,000
Farms Project)/ (SunTrust Bank, Atlanta LOC)
1,500,000 Hamilton County, TN, 5.00% Bonds, 5/1/1999 1,518,923
4,200,000 Hawkins County, TN IDB, (Series 1995) Weekly VRDNs (Sekisui
Ta 4,200,000
Industries, Inc. Project)/ (Bank of Tokyo-Mitsubishi Ltd. LOC)
2,900,000 Hendersonville, TN IDB, (Series 1996) Weekly VRDNs (Betty 2,900,000
Machine Co. Project)/ (First Union National Bank, Charlotte, NC
LOC)
1,800,000 Jackson, TN IDB, Solid Waste Facility Bonds (Series 1995) 1,800,000
Weekly VRDNs (Florida Steel Corp.)/(Nationsbank, N.A.,
Charlotte LOC)
2,400,000 Knox County, TN IDB, (Series 1996) Weekly VRDNs (Health 2,400,000
Ventures, Inc. Project)/ (SunTrust Bank, Nashville LOC)
2,000,000 Knox County, TN, GO Refunding Bonds (Series 1998), 3.65% Bonds, 2,000,000
3/1/1999
975,000 McMinn County, TN IDB, Industrial Development Bonds (Series 975,000
1995) Weekly VRDNs (Creative Fabrication Corp.)/(NBD Bank,
Michigan LOC)
1,525,000 Memphis, TN, Capital Outlay Notes, 5.00% BANs, 7/1/1998
1,527,972 2,000,000 Metropolitan Government Nashville & Davidson
County, TN HEFA, 2,000,000
Revenue Bonds (Series 1985A), 3.75% TOBs (Vanderbilt
University), Optional Tender 1/15/1999
1,000,000 Metropolitan Government Nashville & Davidson County, TN, 1,000,000
(Series 1997), 3.80% Bonds, 5/15/1998
1,500,000 Metropolitan Government Nashville & Davidson County, TN,
Series 1,500,000 B, 3.60% Bonds (FGIC INS), 1/1/1999
2,000,000 Oak Ridge, TN IDB, Solid Waste Facility Bonds (Series 1996) 2,000,000
Weekly VRDNs (M4 Environmental L.P. Project)/(SunTrust Bank,
Atlanta LOC)
3,500,000 Roane, TN IDB, (Series 1982) Monthly VRDNs (Fortafil Fibers, 3,500,000
Inc. Project)/ (ABN AMRO Bank N.V., Amsterdam LOC)
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
TENNESSEE--CONTINUED
$ 500,000 Sevier County, TN Public Building Authority, Local Government $ 500,000
Improvement Bonds, (Series II-G-2) Weekly VRDNs (Knoxville,
TN)/(AMBAC INS)/(Kredietbank N.V., Brussels LIQ)
1,000,000 Shelby County, TN Health Education & Housing Facilities Board, 1,000,000
Multifamily Housing Revenue Bonds (Series 1988) Weekly VRDNs
(Arbor Lake Project)/(PNC Bank, N.A. LOC)
1,300,000 Sumner County, TN IDB, Capital Outlay Notes (Series
1997-O), 1,300,517 4.25% BANs, 6/30/1998
3,000,000 (b)Tennessee Housing Development Agency, (Series C) Weekly 3,000,000
VRDNs (Bank of America NT and SA, San Francisco LIQ)
1,500,000 Tennessee Housing Development Agency, Home Ownership Program 1,500,000
(Issue 1996 5-B), 3.85% TOBs, Mandatory Tender 8/20/1998
1,000,000 Union City, TN IDB, (Series 1995) Weekly VRDNs (Kohler Co.)/ 1,000,000
(Wachovia Bank of Georgia N.A., Atlanta LOC)
1,600,000 Union County, TN IDB, (Series 1995) Weekly VRDNs (Cooper 1,600,000
Container Corporation Project)/ (SunTrust Bank, Nashville LOC)
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 48,382,412
</TABLE>
At April 30, 1998, 70.3% 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 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, MIG1 or MIG-2 by Moody's Investors Service, Inc., or
F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, 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, 1998, these securities amounted to
$3,000,000 which represents 6.1% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($48,842,659) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation BANs --Bond Anticipation
Notes FGIC --Financial Guaranty Insurance Company GO --General Obligation HEFA
- --Health and Education Facilities Authority IDB --Industrial Development Bond
IDRB --Industrial Development Revenue Bond INS --Insured LIQ --Liquidity
Agreement LLC --Limited Liability Corporation LOC --Letter of Credit TOBs
- --Tender Option Bonds VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
TENNESSEE MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 48,382,412
Cash 144,609
Income receivable 456,838
Prepaid expenses 1,218
Deferred organizational costs 15,512
Total assets 49,000,589
LIABILITIES:
Income distribution payable 157,930
Net Assets for 48,842,659 shares outstanding $ 48,842,659
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$23,610,130 / 23,610,130 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$25,232,529 / 25,232,529 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
TENNESSEE MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 1,018,482
EXPENSES:
Investment advisory fee $ 135,967
Administrative personnel and services fee 76,863
Custodian fees 1,202
Transfer and dividend disbursing agent fees and expenses 20,160
Directors'/Trustees' fees 710
Auditing fees 6,418
Legal fees 2,848
Portfolio accounting fees 29,907
Shareholder services fee--Institutional Shares 32,205
Shareholder services fee--Institutional Service Shares 35,778
Share registration costs 12,030
Printing and postage 5,440
Insurance premiums 3,574
Miscellaneous 3,509
Total expenses 366,611
Waivers and reimbursements
Waiver of investment advisory fee $ (135,967)
Waiver of shareholder services feeInstitutional Shares (32,205)
Reimbursement of other operating expenses (66,287)
Total waivers and reimbursements (234,459)
Net expenses 132,152
Net investment income $ 886,330
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
TENNESSEE MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS
Net investment income $ 886,330 $ 1,437,481
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income
Institutional Shares (438,462) (613,693)
Institutional Service Shares (447,868) (823,788)
Change in net assets resulting from distributions to (886,330) (1,437,481)
shareholders
SHARE TRANSACTIONS
Proceeds from sale of shares 117,534,499 172,127,656
Net asset value of shares issued to shareholders in payment of 271,699 603,094
distributions declared
Cost of shares redeemed (116,635,463) (172,706,532)
Change in net assets resulting from share transactions 1,170,735 24,218
Change in net assets 1,170,735 24,218
NET ASSETS:
Beginning of period 47,671,924 47,647,706
End of period $ 48,842,659 $ 47,671,924
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997 1996(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) 1.69% 3.47% 1.59%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.35%* 0.35% 0.10%*
Net investment income 3.40%* 3.40% 3.57%*
Expense waiver/reimbursement(c) 0.99%* 1.11% 1.62%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $23,610 $23,048 $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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997 1996(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) 1.57% 3.21% 1.48%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.60%* 0.60% 0.39%*
Net investment income 3.14%* 3.13% 3.26%*
Expense waiver/reimbursement(c) 0.74%* 0.86% 1.33%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $25,233 $24,624 $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)
NOTES TO FINANCIAL STATEMENTS
TENNESSEE MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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 tax imposed by the State of Tennessee
consistent with stability of principal and liquidity.
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 uses the amortized cost method to value its portfolio securities 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, 1998 is as
follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Tennessee Housing Development Agency 4/14/1998 $ 3,000,000
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.
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, 1998, capital paid-in aggregated $48,842,659.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SHARES APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
Shares sold 62,238,111 87,914,045
Shares issued to shareholders in payment of 2,122 6,745
distributions declared
Shares redeemed (61,677,952) (82,696,744)
Net change resulting from Institutional Share 562,281 5,224,046
transactions
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
Shares sold 55,296,388 84,213,611
Shares issued to shareholders in payment of 269,577 596,349
distributions declared
Shares redeemed (54,957,511) (90,009,788)
Net change resulting from Institutional Service 608,454 (5,199,828)
Share transactions
Net change resulting from share transactions 1,170,735 24,218
</TABLE>
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, Inc. 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 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, 1998, 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 $64,405,000 and $68,240,000, respectively.
ORGANIZATIONAL EXPENSES
Organizational expenses of $24,645 were borne initially by the Adviser. The Fund
has reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five-year period following the Fund's effective
date. For the six months ended April 30, 1998, the Fund expensed $3,060 of
organizational expenses.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 71% 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 16% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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.
[Graphic]
Federated Investors
Tennessee Municipal Cash Trust
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229634
Cusip 314229642
G01865-02 (6/98)
[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, 1997 through April 30, 1998. 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 incomefree 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 totaled $216.5 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, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or 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. What is your review of the economic and interest rate environment during the
fund's six-month reporting period? A. During the fund's semi-annual reporting
period, the Federal Reserve Board (the "Fed") kept monetary policy unchanged
despite robust economic growth. The economy posted a rate of growth of over
3.00% in the last three quarters of 1997, and continued at an above-trend pace
of 4.80% in the first quarter of 1998. Prior to last November, the continued
benign inflation picture soothed a market that would otherwise have been
unsettled at such a vigorous pace of growth. At the beginning of the reporting
period, signs of tight labor markets began to build expectation of a need for a
tightening by the Fed as added insurance against inflation. However, dramatic
declines in the Asian equity markets in the fourth quarter of 1997 curtailed
this expectation, and overseas developments dominated the rest of the year.
Concern over these events and their impact on the domestic economy abated
somewhat in the first quarter of 1998. Nevertheless, more recent employment
growth and tight labor markets are producing much anxiety in the market, as wage
inflation pressures could build. In March, the Fed adopted a "tightening bias"
toward monetary policy but declined to raise short-term interest rates in May,
content to wait until the economic picture becomes more clear.
Movements in short-term Treasury securities -- particularly Treasury bills
("T-bills") -- were strongly influenced by technical factors over the reporting
period. A reduction in the overall size of T-bills due to improvement in the
federal budget deficit kept these securities well-bid and trading well below the
5.50% federal funds target rate. In addition, a periodic flight-to-quality to
these securities from investors seeking a safe haven from the turmoil overseas
also drove their yields lower.
Reflecting aggressive demand for T-bills, yields on one-year tax-free municipal
notes were attractive for most of the reporting period, averaging over 68% of
T-bills. One-year municipal notes, for example, began the reporting period at
close to 3.75%, moved as high as 3.85% in mid-November, but fell again to 3.75%
by the end of the year as inflation remained friendly. Yields dropped sharply to
3.60% in January, and to 3.50% in February due to supply constraints and fears
that the as-yet-unknown impact of the financial troubles in Asia on the domestic
economy might be worse than previously thought. Yields then rose to close the
reporting period at 3.75% as domestic economic growth continued.
In addition to economic fundamentals, short-term municipal variable rate demand
notes ("VRDNs") were strongly influenced by technical factors over this
reporting period, most notably calendar year-end and income tax payments in
April. VRDNs, which comprise more than 50% of the fund's assets, started the
reporting period at a yield of 3.80% but moved sharply higher in December to
above 4.00% as supply and demand imbalances occurred. Yields fell again in
January and February as strong demand fueled municipal purchases while supply
remained somewhat limited. In late March and April, cash flow redemptions due to
income tax payments moved yields higher to above 4.50%. Over the reporting
period, VRDN yields averaged 66% or more of taxable rates making them generally
attractive over time for investors at the 35% or higher federal tax brackets.
Q. What was your strategy for the fund during the reporting period?
A. The fund remained in a 30- to 50-day average maturity range over the
reporting period, a neutral to positive stance, and moved within that range
according to relative value opportunities. We continued to employ a barbelled
structure for the portfolio, combining a significant position in seven-day VRDNs
with purchases of longer-term securities with maturities between six and twelve
months. Once an average maturity range was targeted, we attempted 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 municipal to taxable instruments, such as treasury
securities. This portfolio structure continued to provide a competitive yield
over time.
Q. How has the fund performed?
A. The seven-day net yield for the fund's Institutional Shares on April 30,
1998, was 3.53% compared to 3.35% at the beginning of the reporting period.* The
latest yield was the equivalent to a 6.46% taxable yield for investors in the
highest federal and state tax brackets. For the Institutional Service Shares,
the seven-day net yield was 3.38% on April 30, 1998, compared to 3.20% at the
beginning of the reporting period.* The latest yield was equivalent to a taxable
yield of 6.18% for investors in the highest federal and state tax brackets. The
increase in yields was due in part to technical factors related to income tax
payments by individuals in April.
Q. As we approach mid-year, what is your outlook for the remainder of 1998?
A. The jury is still out on the extent of the impact that the crisis in Asian
economies will have on U.S. growth. As a result, the Fed, although certain to be
troubled by persistent above-trend growth in an environment where labor markets
are tight, will likely remain on hold until the effect is better known. Much of
this should be revealed over the second and third quarters of 1998, and if the
drag on the U.S. economy does not materialize, expectations of a need for Fed
rate increase will most likely rebuild. In the near term, however, market
movements will as likely reflect technical factors as fundamental ones. These
supply/demand imbalances could very well present attractive investment
opportunities for the fund. We will continue to watch, with great interest,
market developments in order to best serve our municipal clients.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings. 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.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Federated Municipal Trust (the "Trust") was
held on April 23, 1998. On February 24, 1998, the record date for shareholders
voting at the meeting, there were 5,100,123,000 total outstanding shares. The
following items were considered by shareholders of the Trust and the results of
their voting were as follows:
AGENDA ITEM: To elect Trustees.*
SHARES VOTED SHARES WITHHELD
FOR AUTHORITY
THOMAS G. BIGLEY 2,720,895,677 119,147,843
JOHN T. CONROY, JR. 2,721,162,612 118,880,908
PETER E. MADDEN 2,721,333,249 118,710,271
JOHN E. MURRAY, JR. 2,721,558,092 118,487,428
* The following Trustees of the Trust continued their terms as Trustees of
the Trust: John F. Donahue, William J. Copeland, Glen R. Johnson, James E.
Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Wesley W. Posvar,
Marjorie P. Smuts.
PORTFOLIO OF INVESTMENTS
VIRGINIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--99.6%
VIRGINIA--87.8%
$ 3,500,000 Alexandria, VA Redevelopment and Housing Authority, Series $ 3,500,000
1996B Weekly VRDNs (Buckingham Village Apartments)/(First
Union National Bank, Charlotte, N.C. LOC)
2,200,000 Amelia County, VA IDA, (Series 1991) Weekly VRDNs (Chambers 2,200,000
Waste System)/ (Morgan Guaranty Trust Co., New York LOC)
11,000,000 Campbell County, VA IDA, Solid Waste Disposal Facilities 11,000,000
Revenue ACES Weekly VRDNs (Georgia-Pacific Corp.)/(Industrial
Bank of Japan Ltd., Tokyo LOC)
1,000,000 Charles County, VA IDA, Solid Waste Disposal Facility Revenue 1,000,000
Bonds (Series 1996) Weekly VRDNs (Chambers Development of
Virginia, Inc. Project)/(Morgan Guaranty Trust Co., New York
LOC)
1,650,000 Charlottesville, VA IDA, IDR Refunding Bonds, 3.90% TOBs 1,650,000
(Safeway, Inc.)/(Bankers Trust Co., New York LOC) 6/1/1998
2,900,000 Chesapeake, VA IDA, (Series 1986) Weekly VRDNs (Volvo AB)/ 2,900,000
(Union Bank of Switzerland, Zurich LOC)
5,000,000 Chesapeake, VA IDA, IDRB (Series 1988) Weekly VRDNs (Sumitomo 5,000,000
Machinery Corp. of America Corp.)/(Sumitomo Bank Ltd., Osaka
LOC)
4,100,000 Chesterfield County, VA IDA, 3.50% CP (Virginia Electric 4,100,000
Power Co.), Mandatory Tender 7/15/1998
1,800,000 Danville, VA IDA, (Series 1997) Weekly VRDNs (Diebold, 1,800,000
Inc.)/(Bank One, Ohio, N.A. LOC)
679,000 Dinwiddie County, VA IDA, IDRB (Series 1989) Weekly VRDNs 679,000
(Tindall Concrete VA, Inc.)/ (First Union National Bank,
Charlotte, NC LOC)
5,298,975 (b)Equity Trust III, (1996 Series) Weekly VRDNs
(Bayerische 5,298,975 Hypotheken-Und Wechsel-Bank AG LOC)
6,900,000 Fairfax County, VA IDA, (Series 1993B), 3.80% CP (Inova 6,900,000
Health System), Mandatory Tender 5/6/1998
2,020,000 Fairfax County, VA, (Series A), 6.25% Bonds (United States 2,105,024
Treasury PRF), 4/1/1999 (@102)
9,675,000 Falls Church, VA IDA, (Series 1985), 3.70% TOBs (Kaiser 9,675,000
Permanente Medical Care Program), Optional Tender 5/1/1998
600,000 Fauquier County, VA IDA, Refunding Revenue Bonds Weekly VRDNs 600,000
(Warrenton Development Co.)/(Nationsbank, N.A., Charlotte
LOC)
7,113,000 Fluvanna County, VA IDA, (Series 1986) Weekly VRDNs 7,113,000
(Thomasville Furniture Industries)/ (Union Bank of
Switzerland, Zurich LOC)
11,500,000 Halifax, VA IDA, MMMs, PCR, 3.60% CP (Virginia Electric
Power 11,500,000 Co.), Mandatory Tender 9/11/1998
3,000,000 Halifax, VA IDA, MMMs, PCR, 3.90% CP (Virginia Electric
Power 3,000,000 Co.), Mandatory Tender 5/15/1998
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
VIRGINIA--CONTINUED
$ 1,500,000 Hampton, VA Redevelopment & Housing Authority, (Series 1998) $ 1,500,000
Weekly VRDNs (Township Apartments)/(Amsouth Bank N.A.,
Birmingham LOC)
1,000,000 Hampton, VA, 7.625% Bonds, 1/15/1999 1,027,667
1,700,000 Hanover County, VA IDA Weekly VRDNs (Fiber-Lam, Inc. 1,700,000
Project)/(Nationsbank, N.A., Charlotte LOC)
3,250,000 Loudoun County, VA, (Series 1998), 4.15% TOBs (Signature 3,250,000
Flight Support Corp.)/ (Bayerische Landesbank Girozentrale
LOC), Optional Tender 6/1/1998
3,200,000 Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Harden 3,200,000
Manufacturing Corp.)/ (Columbus Bank and Trust Co., GA LOC)
3,000,000 Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Smith Land 3,000,000
Holdings, L.L.C.)/ (Columbus Bank and Trust Co., GA LOC)
7,500,000 Metropolitan Washington, DC Airports Authority, 3.60% CP 7,500,000
(Nationsbank, N.A., Charlotte LOC), Mandatory Tender
5/21/1998
7,500,000 Metropolitan Washington, DC Airports Authority, 3.80% CP 7,500,000
(Nationsbank, N.A., Charlotte LOC), Mandatory Tender
9/24/1998
1,740,000 Newport News, VA, 5.90% Bonds, 1/1/1999 1,765,986
5,000,000 Norfolk, VA IDA, 3.60% CP (Sentara Health Systems
Obligation 5,000,000
Group), Mandatory Tender 8/20/1998
1,285,000 Pulaski County, VA IDA, (Series 1995) Weekly VRDNs (Balogh 1,285,000
Real Estate Ltd. Partnership Mar-Bal Inc. Project)/(Bank One,
Ohio, N.A. LOC)
945,000 Richmond, VA IDA, (Series 1997) Weekly VRDNs (PM Beef)/(U.S. 945,000
Bank, N.A., Minneapolis LOC)
780,000 Richmond, VA IDA, Industrial Development Revenue Refunding 780,000
Bonds (Series 1987-B), 3.65% TOBs (Crow-Klein-MacFarlane
Project)/(First Union National Bank of Virginia LOC),
Optional Tender 5/15/1998
2,500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-10) 2,500,000
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC)
1,500,000 Richmond, VA Redevelopment & Housing Authority, (Series B-3) 1,500,000
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC)
1,000,000 Richmond, VA Redevelopment & Housing Authority, (Series B-9) 1,000,000
Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische
Landesbank Girozentrale LOC)
2,900,000 South Hill, VA IDA, (Series 1997) Weekly VRDNs (International 2,900,000
Veneer Co., Inc.)/ (Bank One, Indianapolis, N.A. LOC)
2,500,000 Staunton, VA IDA, (Series 1997) Weekly VRDNs (Diebold, 2,500,000
Inc.)/(Bank One, Ohio, N.A. LOC)
2,225,000 Tazewell County, VA IDA, (Series 1993) Weekly VRDNs (Seville 2,225,000
Properties Bluefield)/ (Huntington National Bank, Columbus,
OH LOC)
2,030,000 Virginia Beach, VA IDA, (Series 1993) Weekly VRDNs (Ocean 2,030,000
Ranch Motel Corp.)/ (Nationsbank, N.A., Charlotte LOC)
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
VIRGINIA--CONTINUED
$ 7,835,000 Virginia Peninsula Port Authority, Coal Terminal Revenue $ 7,835,000
Refunding Bonds (Series 1987A), 3.65% CP (Dominion Terminal
Associates)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 5/27/1998
6,000,000 Virginia Peninsula Port Authority, Coal Terminal Revenue 6,000,000
Refunding Bonds (Series 1987A), 3.90% CP (Dominion Terminal
Associates)/(National Westminster Bank, PLC, London LOC),
Mandatory Tender 5/21/1998
9,450,000 Virginia Peninsula Port Authority, Facility Revenue Refunding 9,450,000
Bonds (Series 1992), 3.60% CP (CSX Corp.)/(Bank of Nova
Scotia, Toronto LOC), Mandatory Tender 5/28/1998
3,150,000 Virginia Peninsula Port Authority, Facility Revenue Refunding 3,150,000
Bonds (Series 1992), 3.65% CP (CSX Corp.)/(Bank of Nova
Scotia, Toronto LOC), Mandatory Tender 7/10/1998
4,920,000 (b)Virginia Port Authority, MERLOTs (Series 1997M) Weekly 4,920,000
VRDNs (MBIA, INS)/ (Corestates Bank N.A., Philadelphia, PA
LIQ)
4,700,000 Virginia Small Business Financing Authority Weekly VRDNs 4,700,000
(Moses Lake Industries)/ (KeyBank, N.A. LOC)
2,500,000 Virginia State Housing Development Authority, (Series G-1), 2,507,168
5.70% TOBs, Mandatory Tender 7/1/1998
4,000,000 Virginia State Public School Authority, (Series B), 5.00% 4,011,637
Bonds, 8/1/1998
1,000,000 Virginia State Public School Authority, (Series C), 5.00% 1,002,938
Bonds, 8/1/1998
5,420,000 Virginia State Public School Authority, (Series I), 4.25% 5,428,325
Bonds, 8/1/1998
1,507,000 Williamsburg, VA IDA, (Series 1988) Weekly VRDNs (Colonial
1,507,000 Williamsburg Foundation Museum)/(Nationsbank,
N.A., Charlotte LOC)
1,575,000 Winchester, VA IDA, (Series 1995) Weekly VRDNs (Midwesco 1,575,000
Filter Resources, Inc. Project)/ (Harris Trust & Savings
Bank, Chicago LOC)
5,000,000 York County, VA IDA, (Series 1985), 3.50% CP (Virginia 5,000,000
Electric Power Co.), Mandatory Tender 7/15/1998
&NBSP;&NBSP;&NBSP;&NBSP;TOTAL 190,216,720
GUAM--2.3%
4,855,000 (b)Guam Power Authority, MERLOTs (Revenue Bonds, Series F) 4,855,000
Weekly VRDNs (AMBAC INS)/(Corestates Bank N.A., Philadelphia,
PA LIQ)
PUERTO RICO--9.5%
5,000,000 (b)Commonwealth of Puerto Rico, (Series 1992A) P-Floats 5,000,000
PT-140, 3.65% TOBs (FSA INS)/ (Commerzbank AG, Frankfurt
LIQ), Mandatory Tender 1/14/1999
5,000,000 Government Development Bank for Puerto Rico (GDB), 3.45% CP, 5,000,000
Mandatory Tender 7/9/1998
3,000,000 (b)Puerto Rico Electric Power Authority, MERLOTs (Series 3,000,000
1997S) Weekly VRDNs (MBIA INS)/(Corestates Bank N.A.,
Philadelphia, PA LIQ)
</TABLE>
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
PUERTO RICO--CONTINUED
$ 2,000,000 Puerto Rico Industrial, Medical & Environmental PCA, (1983 $ 2,002,275
Series A), 4.00% TOBs (Merck & Co., Inc.), Optional Tender
12/1/1998
3,500,000 Puerto Rico Industrial, Medical & Environmental PCA,
(Series 3,500,000 1983A), 3.80% TOBs (Reynolds Metals
Co.)/(ABN AMRO Bank N.V., Amsterdam LOC), Optional Tender
9/1/1998
2,065,000 Puerto Rico Municipal Finance Agency, Revenue Bonds, Series B, 2,067,118
4.50% Bonds, 7/1/1998
TOTAL 20,569,393
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 215,641,113
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 48.5% 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, MIG-1 or MIG-2 by Moody's Investors Service, Inc., or
F-1+, F-1, and F-2 by Fitch IBCA, 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, 1998, these securities amounted to
$23,073,975 which represents 10.7% of net assets.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($216,594,115) at April 30, 1998.
The following acronyms are used throughout this portfolio:
ACES --Adjustable Convertible Extendable Securities AMBAC --American Municipal
Bond Assurance Corporation CP --Commercial Paper FSA --Financial Security
Assurance IDA --Industrial Development Authority IDR --Industrial Development
Revenue IDRB --Industrial Development Revenue Bond INS --Insured LIQ --Liquidity
Agreement LOC --Letter of Credit MBIA --Municipal Bond Investors Assurance
MERLOTs --Municipal Exempt Receipts Liquidity Optional Tender Series MMMs
- --Money Market Municipals PCA --Pollution Control Authority PCR --Pollution
Control Revenue PLC --Public Limited Company PRF --Prerefunded TOBs --Tender
Option Bonds VRDNs --Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
VIRGINIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 215,641,113
Cash 73,566
Income receivable 1,527,755
Prepaid expenses 5,783
Total assets 217,248,217
LIABILITIES:
Income distribution payable $ 618,487
Accrued expenses 35,615
Total liabilities 654,102
Net Assets for 216,594,115 shares outstanding $ 216,594,115
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$38,184,727 / 38,184,727 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$178,409,388 / 178,409,388 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
VIRGINIA MUNICIPAL CASH TRUST
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 4,680,815
EXPENSES:
Investment advisory fee $ 498,641
Administrative personnel and services fee 94,013
Custodian fees 7,510
Transfer and dividend disbursing agent fees and expenses 65,308
Directors'/Trustees' fees 930
Auditing fees 6,491
Legal fees 3,951
Portfolio accounting fees 39,074
Shareholder services fee--Institutional Shares 49,670
Shareholder services fee--Institutional Service Shares 261,980
Share registration costs 15,885
Printing and postage 10,005
Insurance premiums 2,854
Miscellaneous 7,964
Total expenses 1,064,276
Waivers --
Waiver of investment advisory fee $ (136,307)
Waiver of shareholder services fee--Institutional Shares (49,670)
Waiver of shareholder services fee--Institutional Service (104,792)
Shares
Total waivers (290,769)
Net expenses 773,507
Net investment income $ 3,907,308
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
VIRGINIA MUNICIPAL CASH TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, OCTOBER 31,
1998 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS
Net investment income $ 3,907,308 $ 6,903,033
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income
Institutional Shares (651,824) (732,930)
Institutional Service Shares (3,255,484) (6,170,103)
Change in net assets resulting from distributions to (3,907,308) (6,903,033)
shareholders
SHARE TRANSACTIONS
Proceeds from sale of shares 676,321,918 1,311,030,791
Net asset value of shares issued to shareholders in payment 2,360,669 4,912,775
of distributions declared
Cost of shares redeemed (685,308,711) (1,296,599,777)
Change in net assets resulting from share transactions (6,626,124) 19,343,789
Change in net assets (6,626,124) 19,343,789
NET ASSETS:
Beginning of period 223,220,239 203,876,450
End of period $ 216,594,115 $ 223,220,239
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.04 0.03 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.04) (0.03) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.63% 3.31% 3.24% 3.56% 2.57% 0.35%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.50%* 0.49% 0.49% 0.49% 0.33% 0.09%*
Net investment income 3.28%* 3.26% 3.19% 3.50% 2.56% 2.68%*
Expense waiver/reimbursement(c) 0.36%* 0.36% 0.40% 0.42% 0.37% 1.04%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $38,185 $24,382 $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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
1998 1997 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.02 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.02) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.55% 3.17% 3.14% 3.46% 2.44% 0.34%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.64%* 0.63 0.59% 0.59% 0.40% 0.19%*
Net investment income 3.11%* 3.12% 3.10% 3.38% 2.42% 2.67%*
Expense waiver/reimbursement(c) 0.21%* 0.23% 0.30% 0.32% 0.37% 1.04%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $178,409 $198,838 $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)
NOTES TO FINANCIAL STATEMENTS
VIRGINIA MUNICIPAL CASH TRUST
APRIL 30, 1998 (UNAUDITED)
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"). 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.
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 uses the amortized cost method to value its portfolio securities 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, 1998, is as
follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Commonwealth of Puerto Rico, (Series 1992A) 1/22/1998 $5,000,000
Equity Trust III (1996 Series) 11/1/1996 5,298,975
Guam Power Authority, MERLOTs (Revenue Bonds, Series F) 10/1/1997 4,855,000
Puerto Rico Electric Power Authority, MERLOTs (Series 1997S) 1/1/1998 3,000,000
Virginia Port Authority, MERLOTs (Series 1997M) 7/1/1997 4,920,000
</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.
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, 1998, capital paid-in aggregated $216,594,115.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SHARES APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
Shares sold 98,620,392 75,151,387
Shares issued to shareholders in payment of 107,262 13,520
distributions declared
Shares redeemed (84,925,137) (77,084,630)
Net change resulting from Institutional Share transactions 13,802,517 (1,919,723)
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SERVICE SHARES APRIL 30, 1998 OCTOBER 31, 1997
<S> <C> <C>
Shares sold 577,701,526 1,235,879,404
Shares issued to shareholders in payment of 2,253,407 4,899,255
distributions declared
Shares redeemed (600,383,574) (1,219,515,147)
Net change resulting from Institutional Service (20,428,641) 21,263,512
Share transactions
Net change resulting from share transactions (6,626,124) 19,343,789
</TABLE>
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, Inc. 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 $33,493 were borne initially by the Adviser. The Fund
has reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five year period following the Fund's effective
date. For the period ended April 30, 1998, the Fund expensed $5,582 of
organizational expenses.
INTERFUND TRANSACTIONS
During the period ended April 30, 1998, 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 $187,655,000 and $266,110,000,
respectively.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
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, 1998, 66.6% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The percentage of investments insured
by or supported (backed) by a letter of credit from any one institution or
agency did not exceed 9.7% of total investments.
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
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
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
Anthony R. Bosch
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
[Graphic]
Federated Investors
Virginia Municipal Cash Trust
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 314229816
Cusip 314229824
G00133-01 (6/98)
[Graphic]
